In China, Under Armour Looks to Brand the Workout Experience

As published on brandchannel.com on October 29, 2013.

Earlier this month, Under Armour introduced a completely different retail concept to the Chinese sporting apparel market—a market that has proven hard to crack even for the most seasoned retail veterans, including Nike and Adidas. But Under Armour’s new Shanghai retail theater experience aims to do much more than just sell clothes and sneakers.

Located in the Jing An Kerry Centre, the store features a 270-degree screen that covers 90 percent of the relatively small boutique, encapsulating store-goes in the sights, sounds and experiences of athletic training—a truly foreign concept in China and greater Asia.

In China, especially, working out is not a common activity. Seeing joggers is a rarity and oftentimes in the gym, Chinese are seen wearing jeans or leather shoes as opposed to sporting apparel. Sports participation is also low due to lack of time, the single child policy, and limited governmental support to popularize sports. But, there is still huge market potential; after the Beijing Olympic Games, there has been dramatic growth in sporting brands.

Still, the market has proven difficult, with Nike, Adidas, and others struggling to localize their retail approach to fit the unique needs of Chinese consumers, both young and old. In fact, Nike and Adidas have spent much of their time in the country with a hard focus on building a lifestyle brandaround young consumers, capitalizing on consumer trends towards creativity and self-expression. Still, Nike recently saw a three percent decline in its China sales while it experienced an increase in all other geographic locations.

So Under Armour, a brand built largely on its popular undergarments, is instead focusing on introducing the idea of athleticism to Chinese consumers, putting retail sales second. “You walk in the store going how do athletes train?” Under Armour CEO Kevin Plank explained in a press release. “In China they don’t exercise, so they’re going, why do I exercise? It’s a tutorial on why would I train.” Guests are greeted by a familiar, athletic face: Michael Phelps, who took home eight gold medals at the Beijing Olympics, serves as the store’s virtual host.

“Wherever we go around the globe, we will lead first with our story and bring the people into the best Under Armour experience possible before we ask them to try our performance apparel and footwear,” said Plank.

The company, which as experienced steady quarter-by-quarter growth over the years, saw a 26 percent increase in revenue in the third quarter ending Oct. 24, growing by over 20 percent for the sixteenth consecutive quarter, according to Seeking Alpha. Netting its highest revenues from apparel, followed by footwear and accessories, the retailer shows a lot of promise—that is if it can maintain its impressive growth rate.

In order to do so, the relatively new retailer is doubling down to turn its largely North American-based business into a global brand. Last year, of Under Armour’s $1.8 billion in revenue, less than 10 percent came from global sales, compared to Nike, where more than half of sales come from outside the US. Plank’s plan is to double overall and international revenues by 2016—a difficult goal, for sure, but one certainly in reach for the hard-nosed company. In fact, Plank says, by the end of the year, Under Armour will have more international offices than those in the US. Beyond China, the brand is especially focused on growth in Latin America, with upcoming opportunities in the 2014 World Cup and 2016 Summer Olympics in Brazil to help make in-roads.

Still, China plays a major role in Under Armour’s ability to become a global leader in sports retail. In the last two years, the brand has opened six stores on Mainland China and one in Taiwan and Hong Kong, and the fact that the company manufactures over 50 percent of its products in Asia makes it easy to distribute new designs quickly to the market as the company expands in the region in the future.

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Refinery29 Resists Growing Pains with Renewed Focus on Content, Consumers

As published on brandchannel on September 27, 2013.

Refinery29 has hardly had a chance to settle into its new, larger office and its updated online digs. With 800 percent revenue growth in the past 24 months, it is the fastest growing company in the media division of Inc. Magazine’s 2013 5000 list. The fashion-focused site uses its strong consumer loyalty to help brands connect with Millennials, a consumer base that spends $200 billion annually, according to Chicago-based investment firm William Blair & Co.

“A lot of marketers are asking a lot of questions or intrigued by how it is they speak with a whole generation of consumers that are growing up with very different viewpoints, and technology, and opportunities, some challenging and some good that the generation before has had to deal with. It’s created a very interesting conversation,” Melissa Goidel, Refinery29’s Customer Relations Officer told brandchannel. “The thing that makes [Refinery29] unique is that we are actually creating the content of the conversation, where as those who play in the space with us are really more of the channel for the conversation.”

Known internally as the ‘R29 wink,’ the site has developed its own voice that is approachable and tailored to its users. As Christine Barberich, Refinery29’s Editor in Chief explained, “Our readers come to us for our own unique point of view, as well as the reactions and conversation from their fellow readers. Our audience feels personally connected to Refinery29, our editors, and our content because we create it with them at the very center of it…we share and talk to each other, we never dictate. And that really does make a reader feel like this experience and content was created expressly for them.”

One way the site achieves its ‘friendly’ nature is by avoiding out-of-reach, aspirational model shots that you might find in Vogue or W Magazine, instead opting for ‘real’ people, sometimes its own employees, to model new trends. The down-to-earth approach stretches across its content, too, with the site presenting a mix of high- and low-fashion in an effort to be relatable on all levels.

“They’ll be Alexa Chung and then another [article] about someone who knows how to rock a pair of Keds in a new way that’s totally dynamite,” said Eben Levy, the Director of User Experience. Women are especially attracted to the site because they can find trends that fit their own style using items that are in their price range or are already in their closet.

But perhaps what has made the site most successful is its ability to mix R29 content among branded, promotional pieces. For one thing, Refinery29 always has a role in the branded content. For instance, Levy exlains that a recent article featuring Levi’s clothing was written and shot by R29, who interviewed 10 entrepreneurs and photographed them in Levi’s attire. For the consumer, this content helps reposition Levi’s from its cowboy image—and protects R29’s content standards.

“[Brands] are coming to us as this authoritative connection to this audience. And they want to engage,” Goidel told brandchannel. “Generally speaking, it starts with activation against this audience because they know we have the credibility and they want to approach them with a new idea—they either have that connection or the consumer doesn’t realize they have that offering or service.”

Its personalized approach, to both readers and brands, is what continues to set Refinery29 apart from its competitors. “It is our business to create amazing content that Millennial women want to engage with and we do that as passionately for brands as we do for our own purposes,”—and it shows.

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Content Meets Commerce: How Thrillist and Refinery29 Turn Brand Loyalty into Sales

As published on branchannel on July 5, 2013.

Founded in 2004, Thrillist started as a guide to New York City for recent male graduates. Today, Thrillist Media Group generates over $40 million in revenue , 45 percent of which comes from its e-commerce site, JackThreads, which it acquired in 2010 to complement its content offerings on its Thrillist and Crosby Press sites.  Refinery29

Unlike most media companies, Thrillist has over half a million credit card numbers on hand. The seamless shopping experience, where men can discover and purchase product on the same site, means that the user is more engaged and more likely to have intent to buy. “They’ve got their wallet in hand. They’re looking for recommendations and what to do and what to buy,” Eric Ashman, Thrillist Media Group’s strategic advisor told brandchannel. “Reading GQ, your feet are up on the coffee table, you’re leaning back. And when you’re [on Thrillist], you’re leaning forward and looking for ideas and looking for recommendations and things to share with your friends.”

Refinery29, like Thrillist, is also at the forefront of seamlessly joining content and commerce. With 5 million visitors per month, Refinery29 focuses on building brand loyalty for the brands advertised on its site, but without a major complementary online store.

Whether it’s driving sales or driving loyalty, both sites utilize and prioritize content over commerce. “At the Thrillist Media Group, we’re talking about dropping people into a full e-commerce experience, where we run everything from buyers on one end making product and curating product, all the way through to a warehouse where we do fulfillment,” Ashman told brandchannel.

Both sites support the same strategy: content drives users to the sites and engages them to buy, whether its directly or indirectly. Understanding this relationship, the sites focus on content-based metrics such as audience engagement, audience growth, engagement growth, and time on site to measure their success as opposed to solely focusing on direct purchase metrics.

With regular display advertising, a 1 percent click rate is impressive, but on Thrillist, most of the site’s content has a 25 to 30 percent click rate as users seek to learn more or purchase a product. The products highlighted on Thrillist come about through a unique and tested approach that sees the site’s editors choosing which products they want to write about. The process allows for a more natural feel to the curacted content. Through this content focus, brands highlighted on the site receive benefits across the purchase funnel, impacting awareness through loyalty.

Refinery29’s CEO Philippe von Borries said at a recent NewsCred event that, “Famous brands are 50 percent merchandising and 50 percent inspiration. Borries also spoke of the tricky balance faced by e-commerce sites in which online shops seek to minimize time on the site (pre-purchase) while fashion content sites try to maximize time.

Unlike Thrillist, Refinery29 focuses more on brand loyalty without the emphasis on direct purchase. For example, an article on Alice + Olivia’s ‘whimsical’ office has little to do with showcasing the clothing company’s products and yet, develops a relationship with the brand. The site subtly advertises the boutique Nasty Gal in the article, “20 Crucial Fashion Lessons We Learned From Arrested Development”: “All of Rita’s outfits are just amazing, and we’re only about 40 percent joking here. The heart-shaped glasses, smiley pin, Clueless-inspired beret—these are all things that have populated Nasty Gal and more of our favorite downtown-cool shops in the last few seasons.”

Here, unlike what you might find on Thrillist, there is no link to Nasty Gal’s site, only a reference. The upshot: readers may feel they’re getting the insider scoop. The only section of Refinery29 devoted to direct purchases is discount giftcards and small boutiques highlighted as “Vintage Across America,” which clearly differs from Thrillist’s full e-commerce experience.

While both sites have different end goals to monetize their content and communities—Thrillist Media is looking to launch shops on Thrillist and Crosby Press that leverage Jack Thread’s e-commerce platform, while Refinery29 doesn’t alude to any retail expansion—both remain to be trendsetters in a space that aims to marry the disjointed worlds of content and commerce.

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Content Meets Commerce