Brands working to stay on top of tweets, stories and snaps often find customers are one step ahead.
But in the race to catch up to them, it’s often the athletic brands leading the way.
According to a report from consulting firm Vivaldi, which partnered with consultant CMB, Nike and Under Armour as well as Levi’s are among the top brands in so-called social currency.
Vivaldi has been reporting on social currency for the past six years, characterizing the ability of brands to meld with consumers as they manage their social lives and make buying decisions. The firms weighed various “dimensions” such as personal identity and social identity — the relationship between the brand and self-image and how that relates to others who also use the brand. The study also considered factors such as expression, conversation, affiliation, information and utility and looked at “industry-leading” airlines, automotive brands, beer companies, fashion brands and food chains. The fashion brands ranged from H&M and Zara to Gap and J. Crew to Versace and Gucci.
Researchers found that although 97 percent of companies have launched digital transformation efforts, 70 percent of these efforts are expected to fail. “We think it has to do with the fact that consumers and customers change more rapidly than organizations do and companies do not take into account a full understanding of consumers and customers when launching a transformation,” the report said.
It also noted that since 2010, the idea of social currency has shifted from acting in service of brands to people acting in service of themselves. “They use their social connections to create their reality, to manage their lives, to get the job done whether it is searching, evaluating or buying or using a product or service or brand, and proactively talk about brands only in so far as it helps them establish themselves,” the report said.
Social currency pays off. The study showed that a high social currency score corresponded to a 19 percent greater willingness on the part of consumers to pay a price premium — 37 percent more for Nike and 9 percent more for Prada, for instance.
Researchers also concluded that Under Armour, which scored below Nike but above Adidas, uses social currency to build a strong brand and to compete against those two athletic powerhouses.
“Under Armour punches above its weight when scores are compared to company revenues, which is remarkable considering that Under Armour has one-fourth the revenue of Adidas and one-seventh the revenue of Nike,” the report said.
The study compared Nike’s $31 billion in revenue and Adidas’ more than $16 billion to Under Armour’s $4 billion. “Under Armour focuses on the top end of the performance apparel category in terms of quality and price with a brand positioning that speaks to consumers about the power of their own will,” the report said. “This position is highly democratizing, empowering and inclusive and contrasts to the Nike positioning.”
Under Armour, by embracing an “underdog” position and encouraging a spirit of competition, has moved far beyond its roots as a compression shirt for footballers, researchers said. It has expanded with broader product offerings, new consumer segments, new categories, new markets and additional distribution creates a virtuous cycle of growth and momentum.
Examples include its “I will what I want” ad campaign featuring principal dancer Misty Copeland, in addition to sponsorship of football quarterback Tom Brady, basketball player Stephen Curry, golfer Jordan Spieth and ski racer Lindsey Vonn.
Finally, the report commended Under Armour’s $750 million investment in mobile technology and the health and fitness system called UA Record. “To consumers, it creates utility and affiliation,” the report said. “To Under Armour, it is the opportunity to transform the company from a performance apparel company to a technology company.”