Master of Science in Sport Management Online

The Top Companies in Sports Merchandising

Whether adorning fans on game day or serving as uniforms for a local Little League team, sports merchandise is everywhere. So far, in 2015, sports merchandise retail sales worldwide have amounted to more than $20 billion. According to The Baltimore Sun, as of late 2014, the top three companies in sports merchandising are Nike, Under Armour, and Adidas. What accounts for the success of these sports merchandising firms?

Nike’s Marketing Machine

Image via Flickr by Justin Hee

Nike is by far the top sports merchandise retailer in the world, bringing in almost nine times as much money as either of its closest competitors. Writing for Seeking Alpha, finance expert Sean Croley noted that investors should like Nike because its “marketing machine is simply unmatched in the industry. The company’s famous logo is recognized worldwide and the brand is continually endorsed by the best athletes in the world.”

Croley also highlights Nike’s innovative product designs and the company’s contract with the NFL. Nike manufactures exclusive “Elite” jerseys that mimic what the professional players wear on the field. Plus, high player turnover in the NFL means that fans keep coming back to Nike to keep their gear updated.

Under Armour Abhors Complacency

In 2014, Under Armour took Adidas’ spot as the number-two sports merchandiser. Part of the reason behind the coup is that, according to Sterne Agee research analyst Sam Poser, quoted in The Baltimore Sun, Under Armour is “constantly dissatisfied, and Adidas hasn’t had the same sense of urgency.”

Under Armour pushes itself to grow itself internationally. Last year, Kevin Plank, Under Armour’s CEO, stated, “Our international business will still be less than 10 percent of our total revenues for 2014, and we foresee a day where it is at least half our business.”

New sport managers and marketers across the industry can learn from Under Armour’s forward-thinking spirit. In a constantly changing and evolving industry, complacency is never an option.

Adidas Maintains Strong Presence in Soccer

Adidas has lost some of its brand equity in the U.S. in recent years. However, the company aims to regain its foothold. Prospects look bright for Adidas with its recent contract acquisition to provide gear for the University of Miami’s sports teams, a contract that, in the past, belonged to Nike. Adidas also has a strong presence in soccer markets across the globe.

The brand seeks to recover from past mistakes. In the 1980s, Adidas missed out on the opportunity to sponsor Michael Jordan. In the early 2000s, it acquired Reebok and poured too much money into trying to boost the Reebok brand. More recently, Adidas has lost some of its cool factor in the U.S. However, Adidas plans to revamp its U.S. strategy so that fans can once again be proud to wear the company’s products.

The above three brands take different approaches to sports merchandising, but they can all claim some form of success. All three strive to satisfy fans’ desires and design products that appeal both to people who love to watch sports and those who love to play them. While Nike remains the king of sports merchandise, Under Armour or Adidas could eventually overtake Nike as the reigning name in sports gear.

SOURCES LINKED TO IN THE ARTICLE:

http://www.statista.com/statistics/269797/worldwide-revenue-from-sports-merchandising/

http://articles.baltimoresun.com/2014-09-08/business/bs-bz-under-armour-beats-adidas-20140908_1_armour-ceo-kevin-plank-market-leader-nike

http://seekingalpha.com/article/2121293-10-reasons-to-like-nike-right-now

http://www.fool.com/investing/general/2015/01/20/3-reasons-to-love-under-armours-management.aspx

SOURCE CONSULTED FOR THE ARTICLE:

http://www.wsj.com/articles/how-adidas-aims-to-get-its-cool-back-1427072066