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Under Armour gets marketing, innovation boosts

As fans watch the U.S. speedskating team at the Olympics, they might take notice of the athletes’ long, gliding strides, the powerful swinging of their arms or the way they lean hard, nearly sideways, as they turn the corners of the track.

Sochi Olympics Snowboard Men

Canada’s Maxence Parrot takes a jump during the men’s snowboard slopestyle qualifying at the Rosa Khutor Extreme Park ahead of the 2014 Winter Olympics, Thursday, Feb. 6, 2014, in Krasnaya Polyana, Russia. (AP Photo/Sergei Grits)

These are movements that Under Armour Inc. has studied for years. Now comes the moment of truth.

“We’re excited for speedskating to get started,” said Kevin Haley, senior vice president of innovation at Under Armour. “It’s just so measurable that it’s a nice one to watch.”

The Baltimore-based athletic apparel maker put more than two years of research, development and testing into the Mach39 speedskating skin that American competitors are wearing. It included more than 300 hours of wind tunnel testing and a research partnership with Bethesda-based defense contractor Lockheed Martin Corp.

The company is also outfitting the U.S. bobsled and skeleton teams, as well as the Canadian snowboarding team, putting years of research and unique technologies into gear that will be seen all over the globe.

“The decision to outfit specific teams really comes down to what our brand can do to make those athletes better,” Matt Mirchin, executive vice president of global marketing for Under Armour, said in an email. “Speedskating, bobsled and skeleton athletes all compete in compression suits, which is the foundation of our business, our DNA, so we knew we could bring something new and innovative to these teams to help them succeed.”

Haley said he could not reveal the amount of money used to develop Olympic uniforms, but Under Armour’s most recent quarterly report said that the company spent about $60 million, or 8.9 percent of its quarterly revenue, on product innovation and supply chain costs, which includes Olympic innovation.

Whatever the cost, it’s an effort well-spent, he said. While Under Armour’s Olympic uniforms are unlikely to catch on as the next hot item in athletic fashion, the technology developed to outfit elite athletes can be applied for other purposes.

“We’re not going to go out and sell speedskating suits,” said Haley, “but we learn things in that project that you’ll see in other products.”

It could be something as simple as a zipper, he said. The Under Armour team noticed that athletes were often leaving their uniforms unzipped except during competition. So it repositioned the zippers on the speedskating suits to cross the body diagonally, steering clear of the throat.

It’s something that might be appealing to the everyday runner or cyclist, said Haley.

By working with elite athletes, the innovation team can also yield valuable feedback about their products, said Auburn Bell, vice president of corporate marketing at Legg Mason Inc. and affiliate marketing professor at Loyola University Maryland.

“Just having the access and the input, these partnerships with elite athletes are going to drive innovation,” he said.

Global exposure

But, of course, the Olympic teams and athletes provide more than ideas.

“Aligning themselves with the athletes on that stage couldn’t be a better partnership for them,” said Bell, especially considering Under Armour’s eye on the international market and the global audience the Olympics provides.

One of Under Armour’s main areas of focus is international growth, CEO Kevin Plank said in a conference call with investors about quarterly results. The company is aiming to increase its international business from 6 or 7 percent to 12 percent of business by 2016, he said.

Consumers, athletes and professional teams from other countries are likely to take notice of the company’s products, said Bell, and sports announcers at the event will probably comment on the uniforms.

But Haley said he is more concerned with the long-term benefits of this exposure, rather than the immediate consumer reaction.

“It’s just a great opportunity to tell the world that we’re here, we’re a brand that brings innovation,” he said. “I want to look over the long haul and add equity to the brand by showing the world what we’re capable of.”

The particular sports that Under Armour is outfitting could be a strategic win as well, said Bell, as previously obscure athletes burst on the world stage wearing the Under Armour brand.

“It’s the opportunity for Under Armour to align itself with an athlete that’s down in the trenches and may not be that known,” he said. “They’re down there with the underdog and have the opportunity to elevate the underdog. If you think of Under Armour’s roots, that’s kind of the mantra of the company.”

Haley said that he and his team are excited to see the medal count, for obvious reasons. The brand is likely to benefit even if the athletes don’t win, said Bell, but getting them on the podium would create a nice tailwind.

“The most beneficial thing that could happen for them is for the team or a member of these teams to place or medal in one of these categories,” said Bell. “That would be a home run for Under Armour.”

Mirchin agrees.

“One of sport’s highest honors is being an Olympic medalist,” he said, “and nothing authenticates our brand more than having those athletes compete in Under Armour.”