One of the most substantial digital investments sportswear brands have made is actually add to the perceived value of their products through connected fitness devices.
Each of the large brands have developed their own fitness currency: Nike with its Fuel tracking metric, adidas’s Run Score, Puma also introduced a Run Score, while Under Armour uses Willpower as their currency of choice.
To give a sense for the investment behind some of these developments, Nike put more marketing dollars behind the Fuel Band than they did the Air Jordan in the late ‘80s.
Apple is the latest to enter the game with the three concentric circles it’s using to track fitness with the new Apple Watch.
The big question is: can these currencies catch on? If you look at social tracking platform Klout as a cautionary tale, it shows how difficult it is to establish a new metric.
The number of searches for Klout peaked in 2012 when the platform was gaining a lot of credibility, but has absolutely fallen off of a cliff after it was acquired.
If you do a similar search for Nike Fuel, while Nike Fuel searches reached an all-time peak in 2013, when Nike was putting substantial marketing dollars on television, out-of-home and print advertising, you have seen search volume absolutely plummet since that point.
In April of 2014, Nike actually canceled its Fuel program and fired about 70+ of its engineers.
The most interesting acquisitions in the connected fitness space have been Under Armour. Under Armour acquired MapMyFitness in November of 2013 for $150 million; they complimented that with an acquisition of MyFitnessPal and Endomondo for $475 million and $85 million, suggesting that the organization has made almost three quarters of a billion dollars in transactions in the connected fitness space.
Under Armour is approaching growth of their brand similar to a social media platform—acquiring users versus acquiring customers.
It will be interesting to see over the course of the next several years how they are able to turn those users who are tracking their fitness into consumers of the Under Armour business.