Thursday, November 17, 2016

Nike and Under Armour competing with Big Data

The article “How Nike and Under Armour Became Big Data Businesses” is about how Nike and Under Armour have began to implement Big Data into their product. As our technology is evolving day to day I think that this use of Big Data amongst retail companies is key. As Kevin Plank, the CEO if Under Armour says it is important to follow the path where Big Data is heading. This main path is starting to revolve around wearable technology, which to me will only be as effective as the Big Data is. After reading how Nike switched to “category offense” marketing in 2008, I came to a conclusion of how important this strategy is in sports retail. Now a days so many retail companies have developed clothing lines that are focused on working out and staying fit. Nike using the philosophy that those who live in an area that a sport is popular amongst are more likely to buy a product related to that sport increased their sales by 70%. Nike must use Big Data to research the purchasing habits of those in a certain area, and therefore advertise those products more. This theory reminded me of an article I had to read for my consumer behavior class. The article talked about how companies like Staples price their online products based on the location of the shopper. If a competitor of Staples are in proximity of a certain miles of the shopper than Staples would lower the price of the product. If there are no competitors in distance than the website automatically raises the price. This is use of Big Data with location is something I think would beneficial to Nike and Under Armour. Because both companies have such similar products if they use this tactic of dropping or raising prices based on the location of the other, they might be able to get more accurate data on purchase behaviors. As said in the article, Nike is the world leader in multiple athletic shoe categories, holds an overall leadership position in global sports apparel and has a strong commitment to technology. I did some research to understand the wearable that Under Armour is producing and wanted to see how much of an edge this will give them. The result of Nike shutting down the FuelBand Fitness Tracker because they just didn’t have accurate data is causing Nike to fall back with the use of Big Data. Under Armour has developed its health box that is a tracking fitness system. I think that Under Armour can quickly pass Nike in leadership position if they continue to develop products that are tech savvy. With the use of Fitbits on a daily basis, everyone wants a tracker that will give them accurate data. Whether it is an activity suite or nutritional tracking, the company that releases the most accurate wearable device may just have that competitive edge. This is a video I found on Under Amour’s health box. http://www.forbes.com/sites/bernardmarr/2016/11/15/how-nike-and-under-armour-became-big-data-businesses/2/#2add10e31778 http://fortune.com/2016/01/14/under-armour-fitness-wearables/

1 comment:

  1. I think wearable technology has become one of the most popular uses of Big Data up until this date. Sports retailers such as Nike and Under Armour have changed the sports industry from solely selling sports gear and apparel to an industry that encourages their customers to engage in fitness. I think this means of using the Big Data is extremely beneficial to both the companies and the customers, hopefully improving the health of the customers because of their increased interest in fitness. As for the competition between Nike and Under Armour, I think Under Armour has the upper hand because of Kevin Plank. Even though Nike has been the leading sports company for many years, Kevin Plank has turned his brand into one of the most innovative sports companies by incorporating customized climate apparel and technology. Under Armour has been company that has been spiking in popularity and I believe they will thrive more than Nike with the use of this technology because of how the company works and the employees. I feel as if Under Armour is always one step ahead and when they use this technology, they are not only brainstorming on how to use it now, but also how to improve it in the future. As for the tactic of using the data to alter their pricing of products, I don’t know if I support this. I understand why the companies do this and how greatly it improves their sales, but it does not seem ethical to change the prices of their items based on demographics and popularity of a product. I feel like no matter what there should a sole price for an item across all branches of the company, and if they decided to increase it in response to the data than it should be increased throughout the company. I think it is smart of the companies to use the data to their advantage, such as Nike did, but I believe the customers should be aware of this, or there should be some sort of guidelines on the use of the data. Overall, I feel that Big Data will continue to positively affect the sports industry, but again, I feel as if there needs to be a group of people, who understand this technology, that make guidelines that universally explain how different industries can use data.

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