Under Armour started out as a wholesale apparel provider and is transforming itself into a digital business that uses data to help customers achieve their fitness goals. Paul Fipps, chief digital officer, and T.J. Graven, senior vice president of Global IT, walk us through the cultural, technical, and business model changes that made their transformation possible.
Martha Heller: What is Under Armour’s digital strategy?
Paul Fipps: For the last couple of years, our strategy has been to put the consumer at the center of everything we do: How are we engaging customers? What do they see as our core strengths? How do we deliver immersive experiences? What is their relationship with our brand?
T.J. Graven: Our digital transformation is also fueled by a complete modernization of our systems to an omni-channel model. When we first implemented an ERP in 2005, we were a $250 million domestic wholesale apparel company. In 2015, we were a $4 billion global retail company with multiple channels, so we re-platformed the entire company on SAP HANA, reduced our own data center footprint, and moved to an agile development model.
What are some products that exemplify your digital strategy?
Fipps: We are combining the physical and digital product to help our customers achieve their fitness goals. We just launched our fourth-generation connected shoe, the HOVR Infinite; it is built on our HOVR platform, which we designed with Dow Chemical, and connects to the UA MapMyRun app.
When you take the shoe out of the box, the app identifies the product model and color. You enter your height, weight, age, and fitness goals, and go for a run. The app uses machine learning to collect data from a sensor in the shoe’s footbed and calculates your stride length and cadence. After your first run, the app coaches you on your running form. We see runners who run in the shoe five times [and] increase their run time. The combination of the physical and digital creates an immersive consumer experience that furthers our mission “Under Armour makes you better.”
Another great example is ArmourBox. You go online and tell us about your training schedule, your favorite shoe style, and your fitness goals. We use advanced analytics to send you new shoes or apparel on a subscription basis. Customers who subscribe shop with us more and receive greater value over their lifetime.
Graven: Everything we are doing in digital is predicated on a solid data foundation. We are taking the consumer data from our apps and combining it with the commercial data from our online and retail channels, and putting that into a data lake. The blended data gives meaningful insights to our product groups.
What cultural challenges did you face during the transformation?
Fipps: In 2013, we acquired MapMyFitness, and in 2015, we acquired MyFitnessPal, Endomondo, and Gritness, and created the largest health and fitness community in the market. With all of these acquisitions, we had to shift the culture so that the apps teams would stop thinking of themselves as standalone companies and be a part of the overall Under Armour culture.
Graven: We learned that the culture of a start-up app company in Austin or San Francisco is different from the culture of an enterprise technology and e-commerce teams; the teams think about data very differently. Enterprise data people will take longer in order to get everything right, while the apps people move fast and find a test-and-learn approach more valuable. It took some time to see that those approaches can work together to unlock the value of the data.
What organizational changes have you made?
Fipps: In 2017, we combined all of our digital talent under one organization, which I lead as chief digital officer. The team owns the P&L for the app ecosystem, and everyone in my group has a shared digital products and commerce revenue number. My leadership team includes heads of engineering (ecommerce and apps), consumer engagement and digital commerce, enterprise technology, digital products, and advanced analytics.
Graven: I run the global technology team, and we report into the digital organization. I have IT leadership embedded across all of our businesses and functions. The job of those leaders is to help drive the digital capabilities of those departments.
How are you changing the culture in IT?
Graven: Traditionally, a business leader comes to the IT leader and says, “I want to implement an asset management tool and I used to use this technology and it worked great. Can I have it?” We are working hard to change the conversation. Don’t bring me tool suggestions. Let’s talk about the business impact we are trying to achieve. Are we trying to grow revenue in retail? Are we looking for efficiencies in financial processes? If we start with business impact, we get less complicated solutions faster.
What advice do you have for CIOs who are leading a digital transformation?
Graven: Digital transformation is not easy. We have a culture that is adaptive to change, but because this is change at every level, it is still difficult. Writing a check will not get you there. This level of change requires your own engagement with senior management about vision and roadmap. You cannot delegate that leadership role. And don’t hesitate. Our consumer has changed so much so fast that for us to be great at what we do, we have to drive the transformation. We just have to.
What advice do you have for CEOs whose companies are embarking on a digital transformation?
Fipps: First, have a candid conversation with your executive team about the need to disrupt your business before someone else does. Center your discussions around your consumers and what they expect from your brand.
Next, figure out what your operating model cadence is because your old operating model will no longer work. In apparel and footwear, lead times for new products can be 17 months. Today, in the digital product space, we roll out product enhancements in two weeks. We need a constant, agile, “always on” cadence.
Understand the three keys to operating a digital brand: consumer focus, speed and learning, and a digital talent culture. Under Amour has some very tough competitors who are many times our size. We have to be aware of the competition and have a vision for how we will play a different game.
What market innovation is on the horizon for Under Armour?
Fipps: Over the next three years, we will see an acceleration from wearables to imbedables. In the future, people may not wear watches and carry phones. They will expect their footwear and clothing to provide the experience. This is a hard problem to solve, but we are getting after it. AI will help scale immersive experiences beyond personalization; they will track your nutrition and exercise and be a partner to you in achieving your goals.
About Paul Fipps
Paul Fipps has been chief digital officer with Under Armour since July 2017. He is responsible for the digital product, consumer engagement, global e-commerce, enterprise technology, advanced analytics, and engineering functions. He leads Under Armour’s digital experiences and its Connected Fitness business, including its suite of applications such as MyFitnessPal, MapMyRun, Endomondo, and the UA App. Fipps joined Under Armour in January 2014 and has held several senior management roles, including chief technology officer, CIO and executive vice president of Global Operations. Prior to joining Under Armour, Fipps served as CIO and corporate vice president of Business Services at The Charmer Sunbelt Group. He holds a Bachelor of Science degree in Computer Information Systems and an MBA degree from the University of Baltimore.
About T.J. Graven
T.J. Graven has been senior vice president of Global IT at Under Armour since he joined the firm in 2015. Previously, he was vice president, CIO with Brown-Forman for several years, as well as vice president, director of investor relations prior to that for the same company. Graven holds a bachelor’s degree in finance from Indiana University Bloomington and an MBA in finance from the University of Notre Dame – Mendoza College of Business.
Martha Heller is CEO of Heller Search Associates, an IT executive recruiting firm specializing in CIO, CTO, CISO and senior technology roles in all industries. She is the author The CIO Paradox: Battling the Contradictions of IT Leadership and Be the Business: CIOs in the New Era of IT. To join the IT career conversation, subscribe to The Heller Report.