Under Armour's Kevin Plank on Retail's Future
How are smart companies thinking about bricks and mortar?
It’s critical that you have it. People need to go places; they need to see things; they need to touch things. But … the idea—or the cliché—of omnichannel retail is a reality. It’s happening. Our mobile business, for instance, is extraordinary. Literally, three years ago it was nonexistent, and now it’s over half of our business.
With your big stores, what percent of that cost is going to be considered a marketing or branding expense?
I’d say zero. I don’t believe in flagship retail, because the definition of flagship retail is that it’s a marketing expense and it’s going to lose money. That’s cultural. Everything that we do must be done with a line of profit in sight.
For a strong brand, should selling directly to consumers be more of a focus in the future?
You’ve got that as an option, but the wholesale channel is not going away at any point. Our job is to become better merchants. Twelve years ago we made a short-sleeve version of the shirt and a long-sleeve version, and we sold the same thing to everybody. Now we’ve become frankly more sophisticated, and we have more categories, and we have more offerings, and it’s our job to make sure that we’re segmenting the lines and segmenting the distribution.
Is wearable tech going to move faster than people expect?
It’s going to move at lightning speed. The moment of transition is going to come faster and faster as phones get better, as screens get bigger, as companies do a better job of telling stories online.
One of the big themes you hear right now is virtual reality. Imagine the day when you can put on a headset and actually walk through a mall. Just short of feeling the fabric, you can create a three-dimensional environment. That’s how you have to think about selling online in three or four years.
And in terms of apparel?
All of a sudden it’s as simple as swiping something to change the color of my shirt or adjusting the microclimate that exists between my skin and the fabric. Why do I heat up an entire room when I can just heat up my shirt? That world is going to happen; it’s just a matter of when and who’s going to do it.
I’ll be damned if I’m going to cede anything to Silicon Valley or any other technology company, because I believe we are a technology company. And if the phone is going to get integrated into the shirt, should that be a technology company making apparel or the apparel company starting to make technology? I choose the latter, and that’s exactly where I’m pushing my company.
Are you getting more tech résumés over the transom?
I’ll say this, sporting goods has not always had very intelligent people. We have not attracted the best and the brightest. They’ve gone to Silicon Valley. They’ve gone to Wall Street. Now we’ve got a pretty powerful ecosystem that we can tap into, especially with the acquisition of MapMyFitness. I have 100 engineers, and a year ago I had zero. I have nine Ph.D.s, and a year ago I had zero.
I hear people say, “I want to go work at Google,” and I think “What are you going to do at Google? It’s a search engine.” The ability to touch people and literally change lives is incredibly relevant in a consumer-products company.
You do this annual competition with entrepreneurs called Future Show. What’s the thinking on that?
When Tiger [Woods] was at his peak, would you bet Tiger or would you bet the field? I’ll probably bet the field any day of the week, because there are so many variables. That’s why I don’t want an innovation team; I want a commercialization team. I want to become the world’s No. 1 destination for any innovator, scientist, entrepreneur, etc. We can absolutely scale great ideas, and there are so many examples, like the MagZip, our one-handed zipper. The engineers who came up with that have their product in 400,000 of our jackets this year.
Will social media change the product development process?
It will help, but brands are also meant to have a point of view. The best merchants in the world aren’t the ones predicting what’s cool next; we’re the ones dictating what’s cool next. Insert cliché example of Apple here. Did they invent the MP3 player? No. They didn’t invent anything, but they mastered it. Great brands are meant to be great aggregators. We’re meant to be the ones that are out there listening to what’s happening in the world and finding the latest trends and colors and aggregating it.
Will customization keep evolving?
It’s totally real. For our competitors, it’s more than 50 percent of their websites. Right now we’re selling product with a point of view, but you will see customization coming from Under Armour. Anyone that’s going to differentiate and survive is going to need it.