PUMA
Goes Omni
When Puma, one of the world’s top sports footwear, apparel, and accessories brands, conceived its Love=Football campaign, the goal was to create a memorable tagline in a language that would be understood the world over—pictures. In the process, the company stumbled upon the power of social marketing. Puma’s ad agency, Droga5, filmed a light-hearted commercial featuring scruffy everyday men in a Tottenham pub singing love songs to their Valentines. The video went viral, garnering more than 130 million impressions and spawning hundreds of homemade response videos. Today, Puma’s marketing campaigns are branded with the slogan Forever Faster, which, according to Ruth How, Puma’s Head of Marketing and Communications, is a sentiment that applies not only to its marketing message to consumers, but also to Puma’s approach to marketing itself. As How notes, since so much of Puma’s target market lives and breathes in the digital space, it is imperative for Puma to fuse marketing with technology to reach those consumers Puma maintains an extensive presence on Facebook, Twitter, Instagram, Pinterest, Snapchat, and YouTubee and closely integrates its social strategy with its other marketing channels to deepen its engagement with consumers. It uses social media in part to better understand the different regional and sub-brand audiences within the over 120 countries in which it operates. Not all content is suitable for every one of its nearly 20 million global Facebook fans. Dedicated sport, country, region, and product category pages were created for each social network. For several years, Puma took a trial-and-error approach, focusing on building its follower base. Today, Puma uses a data-driven approach, geo-targeting posts tailored to specific social network audiences at the appropriate times of the day to maximize fan engagement and generate the right mix of online content to best drive sales. The company also sends personalized messages based on customers’ website activity, using items abandoned in shopping carts and other information to generate customized messages and surveys. This integration of channels into a cohesive customer acquisition strategy is in fact a key element of the emerging world of omni-channel retailing.
The advent of the term “omni-channel” signals the evolution of multi-channel or cross-channel retailing to encompass all digital and social technologies. The idea is that customers can examine, access, purchase, and return goods from any channel, even change channels during the process, and receive timely and relevant product information at each step along the way and in each channel. The rise of social networks and the personalized retail it engenders is a primary driver of omni-channel—the complete integration of the shopping and brand experience. Marketing efforts combine offline events, sales and online promotions and brand building across all available channels. For a company like Puma, with e-commerce sites in the United States, Russia, Canada, China, India, Switzerland, Germany, France, the United Kingdom, and a European site that serves multiple countries in multiple languages, this presents quite a challenge.
To meet that challenge, Puma undertook a complete restructuring of its e-commerce business. One hundred team members working on the project for nine months completed the restructuring, which included coordinating warehouses, PayPal, and credit card companies with all of Puma’s different localized sites. Puma felt it needed to shake things up to compete with Adidas, Nike, and other sports apparel companies in a global market that was rapidly shifting away from mature Western markets and desktop commerce. To coordinate market rollouts and ensure a unified brand image, a command center took over brand strategy and investment decisions, leaving daily operational and locality-based decision-making to the regional teams. One central website, powered by Demandware, Puma’s main e-commerce platform, was used to simplify managing global e-commerce operations from a central digital platform, and the company now uses Informatica database technology to manage its 20,000 products centrally, reducing costs and streamlining inventory management. Puma also began to use the Auto Store inventory automation system in some of its warehouses. The system uses a series of bins and robotic handlers to improve storage density, energy efficiency, and the capability to ship items same day to customers. Puma’s goal was to overhaul its e-commerce site from the ground up to ensure that all of its teams were on the same page and that it was using top-end technology in every area to power its business.
Puma assigned the overhaul of its website to Viget, a web design firm. It created tem-plates to unite several Puma sites into one and unify the look across numerous categories and content types. Puma also modeled its physical stores after the design updates made to its websites, laying out items in similar arrangements. A dozen category sites now complement Puma.com, with a custom-built content management system (CMS) ensuring that consistent Puma branding and navigation are maintained across all sub-sites and pages. Category managers can customize home pages outside of the template layout. The flexibility to roll out local, regional, and global campaigns is thus built into the website design. What’s more, the CMS integrates with a language translation tool, a Storefinder tool that helps visitors locate Puma stores, and Puma’s product inventory manager. These design changes have improved site visualization and navigation, prompting customers to spend twice as much time on the site and raising the order rate by 7.1%. Other features like the ability to design Puma shoes from the ground up using a built-in web app across all of its sites have made Puma’s online presence even more compelling.
The Viget team then turned to the mobile platform, first incorporating Storefinder into its mobile site interface. Using the GPS capability of the mobile device, Puma stores nearest to the user can be located along with address and contact information. Users experience the same content and appearance as Puma.com and each of the category sites, managed by the same CMS. Viget also rebuilt Puma’s mobile site using responsive design features. Puma also incorporated mobile into its omni-channel marketing strategy. In fact, whereas most mobile sites are scaled down from the desktop version, Puma’s sites are the opposite—the desktop site is an enlarged version of the mobile site, which has all the functionality of a typical desktop site, including speed. For instance, it developed PUMATRAC, an iPhone app that automatically analyzes environmental conditions to give runners feedback on how these variables impact their performance. The app offers multiple options to share statistics and routes with other runners. Puma has since overhauled its mobile sites in 24 separate markets, customizing features for each one, ensuring that mobile customers can access items they place in their shopping cart on other platforms, and allowing its web and mobile sites to load 69% faster than previous iterations. Puma’s mobile traffic accounts for 70% of all site traffic in many markets, and all of Puma’s sites can now handle large traffic spikes when new products hit the market. Overall, Puma has seen its conversion rates improve from less than 1% to approximately 1.5%; though this sounds modest, the increase has resulted in a significant increase in sales and profits for the company.
In addition to focusing on unifying its branding efforts and e-commerce websites, Puma has also streamlined its e-commerce teams. In the past, Puma maintained nine independent e-commerce teams on five continents. Currently, it is working toward teams divided into the three major segments that comprise the majority of its sales—North America, Europe, and Asia-Pacific—as well as a global unit that operates at a level above these regional segments. At the same time, the company hopes to pursue a strategy that is flexible and focused more on the precise local needs in individual markets, despite reducing the number of individual e-commerce teams. For example, Puma found that in the Asia-Pacific region, traditional paid media advertising was very ineffective compared to social marketing, particularly social media ads featuring compelling influencers like Selena Gomez, whom the company partnered with in 2018, and 2018 World Cup stars like Romelu Lukaku.
Over the past several years, Puma has gained invaluable omni-channel experience, racked up social marketing accomplishments, and laid the groundwork for resurgent e-commerce success. However, the company’s fortunes didn’t improve overnight. Implementing a successful omni-channel strategy is a monumental task. In 2013 and 2014, Puma’s profits sagged, and the company claimed its growing marketing budget was the reason while insisting that its strategy would pay dividends in the future. Puma knew it had to compete on the strength of its brand and product quality, since many of its competitors instead compete using low prices. Puma also knew that it could not control how its product is displayed on third-party sites like Amazon, further motivating the company to improve its product content and the shopping experience on its own site to compensate.
Puma’s ability to adapt its strategy to individual areas has also helped the company advance into India, where it was given the right to sell to customers directly as well as via popular e-commerce portal Flipkart, and China, a growing market where Puma has tradition-ally had minimal presence. Puma entered the market for NBA player endorsements in 2018, both because the NBA culture meshes well with Puma’s and because the NBA is extremely popular in China. Many top young NBA players inked agreements to wear Puma footwear during games in 2019 and beyond. Puma believes that India will pass Germany and France and become one of the company’s top five markets by 2020. Puma CEO Bjorn Gulden believes that 2015 represented a turning point for the Puma brand back to profitability, with earnings that beat analysts’ estimates and improved earnings guidance for the near future. By 2017, Puma’s e-commerce sales had risen to more than 15 times what they had been in 2012. The company’s stock price has nearly tripled over the past three years, and its sales have continued to grow across all of its segments each quarter, leading to sales growth of 17% over the first three quarters of 2018 and a significant gain in net earnings from €134 in 2017 to €176 million in 2018. The company’s credits its e-commerce strategy as the main driver of its turnaround and continued success.
Case Study Questions
1. What is the purpose of Puma’s content management system?
2. Why did Puma build a single centralized website rather than continue with multiple websites serving different countries and regions?
3. What social media sites does Puma use, and what do they contribute to Puma’s marketing effort?
