Sports Apparel & Equipment Industry Outlook 2015: Opportunities for Branded Video Content

Two major categories dominate the sports apparel & equipment industry: brands and retailers. Though many standalone brands like Nike, adidas and Reebok have their own brick-and-mortar shops, retail stores like Dick’s Sporting Goods, Foot Locker, and Sports Authority truly bridge the gap between sports brands and consumers.

According to Statista, U.S. consumer purchases of sporting goods is expected to reach $63.64 billion in 2014.

Consumer purchase sporting goods

In this outlook, we’ll take a closer look at how brands and retailers within the sports apparel & equipment industry are utilizing digital advertising, specifically online video, to promote physical activity, inspire brand loyalty and engage content-hungry consumers.

Brands

In 2013, Trefis reported on the global sports apparel market in a Forbes article. According to the company’s estimates, the industry was worth $135 billion in 2012 and is expected to grow at a CAGR of 4% during 2012 to 2019 to reach $178 billion.

More and more people are embracing physical activity and health-conscious lifestyles, presenting sports apparel brands with an unmatched opportunity. New customers are constantly entering the sports apparel market and as a result, the brands listed below have had to maintain a presence across both traditional and digital media.

Online video is a cornerstone of many brands’ digital marketing strategy. Millions of Americans are watching online video every month and new insight from BI Intelligence only reaffirms the value of online video advertising. Here are a few key findings:

  • Online video ad revenue will reach nearly $5 billion in 2016, up from $2.8 billion in 2013, while TV ad revenue will decline by nearly 3% per year during the same time period.
  • Video ad views exploded in 2013, topping over 35 billion views in December, averaging over 100% year-over-year monthly growth during the year.
  • Video ads have an average click-through rate (CTR) of 1.84%, the highest click-through rate of all digital ad formats.

Whether they’re a leader in the industry or a rising star, sports apparel brands are producing video content on a consistent basis to drive awareness, engagement and ultimately purchases. Below, we’ll explore the ways in which five of these brands have utilized online video advertising as part of their overarching promotional strategy.

Nike

Nike is an industry giant, not only in terms of revenue and growth but also in terms of video content. The brand’s official YouTube channel is chock-full of entertaining, long-form clips that have racked up millions of views and social shares.

Nike hit the ultimate engagement jackpot with its online videos tailored for the World Cup. In fact, the company’s top three videos are World Cup-related. With access to an impressive lineup of professional athletes, Nike always produces killer, star-studded content.

Both of these videos are longer than four minutes. It just goes to show that viewers are more than happy to sit through quality, long-form video content. Nike is one of the most successful storytellers on YouTube and is reaping the rewards. The brand’s channel boasts more than 1.8 million subscribers and 453 million total views.

The second video posted above also landed at #2 on the list of the most shared ads of 2014 less than one month after it was uploaded. As of July 10, 2014, “The Last Game” had earned 927,000 social shares.

Nike utilizes traditional television advertising to tease consumers, encouraging them to check out full-length videos online. Because the content is well-produced, entertaining and not overly-promotional, viewers are more likely to watch and share with their social networks.

adidas

Similarly, the top two videos on adidas’ YouTube channel are related to the World Cup. The brand’s campaign, “All in or Nothing” drove millions of video views and social shares.

Adidas also relies heavily on celebrity endorsements, and with good reason. A 2011 report from Nielsen found that 64% of adult U.S. Internet users who follow a celebrity also follow a brand—this means the celebrity follower is four times more likely to follow a brand than the average U.S. adult online.

Five percent of the brand’s YouTube videos boast more than 1 million views. This compares to Nike’s 6.3%. In August 2014, the brand announced that it would boost spending on marketing to about 13% of sales. In 2015, the company expects to spend between 13-14% on advertising, and online video will no doubt play a starring role in the brand’s promotional strategy.

PUMA

Surprisingly, the official PUMA YouTube channel houses more videos than Nike and adidas combined. Within the last two months, this global athletics brand released “Calling All Troublemakers” as part of its #ForeverFaster campaign—this ad is the most popular of the brand’s 2,614 videos.

Six different versions of the commercial boast more than 1 million views. The company has been producing and uploading video content for five years, and it’s finally seeing success in terms of viewership and engagement with its most recent campaign from JWT.

PUMA has also seen success with its branded films like the one below.

The brand is just now finding the voice its consumers want to hear. PUMA’s “Forever Faster” campaign is off to a great start, and we expect to see significant results from similar efforts.

Reebok

This year, Reebok introduced its Delta CrossFit logo, meant to symbolize the three pillars of positive self-change: mental, physical and social. The brand has slowly shifted its image, no longer flaunting pro-athletes, but fitness junkies.

“A brand is something that constantly evolves, based on a new insight or an opportunity,” says Yan Martin, vice president of global brand marketing at Reebok. “In the late ’80s, Reebok was very, very strong in the world of professional sports, but the landscape changes, as has the way people approach physical activity. We wanted to sharpen Reebok’s point of view around fitness to change with the times.”

With a new focus on CrossFit, yoga, dance and aerobics, Reebok is looking to become a true lifestyle brand.

Under Armour

In April of this year, CEO Kevin Plank told analysts he expected the brand’s marketing budget to increase 34% year-over-year (YOY) to $330 million. Though this pales in comparison to Nike’s $2.7 billion budget, Under Armour and agency Droga5 have produced a couple viral hits as part of the brand’s newest campaign, “I WILL WHAT I WANT.”

With a branded message centered around innovation and performance, Under Armour has found its voice and is thriving—the company has increased sales by more than 20% for 16 straight quarters.

Retailers

In August 2014, IBISWorld released its Sporting Goods Stores market research report. The industry sees $44 billion in annual revenue and is expected to grow as more people adopt healthier lifestyles. Dick’s Sporting Goods leads this industry characterized by a number of small, independent establishments. Competition is fierce and thus, differentiation is the name of the game.

Let’s take a look at how these three companies are using online video to drive consumers to purchase, either online or in brick-and-mortar shops.

Dick’s Sporting Goods

Over the past few quarters, Dick’s Sporting Goods has struggled to profit from its hunting and golfing businesses. Instead, the company is seeing growth in another category: women’s and youth athletic apparel.

Most of the brand’s online video marketing efforts feature this target market, with a primary focus on school-aged youth. Earlier this year, Dick’s Sporting Goods and agency Anomaly created a campaign titled, “Sports Matter.” The ads feature compelling stories, not professional athletes.

Ultimately, the goal of the campaign was to raise awareness of the “Sports Matter” program, which awarded up to $2 million in grants to disbanded or financially challenged youth sports teams. Here are the three spots:

The brand moved beyond simple product placement, honed in on powerful stories and established an emotional connection with viewers. Dick’s Sporting Goods is a prime example of a company using online video to foster deeper consumer-brand relationships.

Foot Locker

Foot Locker is no stranger to online video advertising. The brand’s official YouTube channel houses 459 videos and boasts 97.5 million total views. Foot Locker is known for celebrity endorsers, from Lebron James to Blake Griffin to Charles Barkley.

The brand tends to stick with short-form content and many of its viral hits appear on traditional television. The strategy works for Foot Locker as 28 of the company’s spots have earned more than 1 million YouTube views. Here are a couple standouts:

Sports Authority

Though Sports Authority isn’t an industry giant like Dick’s Sporting Goods or Foot Locker, the brand is still producing a steady stream of video content. From product videos to branding spots to educational clips, Sports Authority houses a wide range of videos on its YouTube channel.

Sports Authority’s newest campaign is all about player safety. Led by USA Football, these training sessions are meant to educate parents and players on safe ways to train, tackle and handle a football.

Taking into account the information above, below is our 2015 outlook for the sports apparel & equipment industry.

Now, more than ever, an increasing number of Americans are turning to physical fitness and athletics. With the rise in popularity of alternative workout methods like CrossFit, yoga, Zumba, etc., more and more people are finding time to exercise. Obviously, this presents a huge opportunity for sports apparel & equipment companies, both the individual brands and retailers.

Consumer behavior will continue to shape and mold this industry. Already, companies are tailoring their marketing strategies to cater to fitness buffs, casual exercisers and others who may not necessarily relate to professional athletes.

Consumer behavior will also dictate ad formats. A new survey from Harris Interactive and Goo Technologies found that 94% of people believe mobile ads and online video ads will be around in 10 years. As these kinds of ads tend to be more engaging and immersive, sports apparel & equipment brands will continue to shift marketing budgets to these mediums.

We will even see the rise of innovative platforms designed to simplify and improve the sports apparel & equipment shopping experience. For example, The Locker is a fairly new social media network that allows professional and amateur athletes to share the exact details of their gear so other users can equip themselves in a similar fashion. As peer recommendations are one of, if not the most, effective forms of advertising, sites like these will present a myriad of opportunities for influencer marketing.

As we mentioned earlier, differentiation is key. While brands like adidas and Nike go head-to-head with their star-filled spots, companies like Under Armour and Reebok are devising strategies to reach, attract and engage untapped markets. Regardless, online video will continue to play a monumental role in the sports apparel & equipment industry throughout 2015 and beyond.

About Hannah Brenzel

Want to learn more?

Request a Demo