Contact: Scott Denne
All kinds of legacy brands are racing into the mobile app business. The latest example: shoemaker ASICS’s $85m reach for FitnessKeeper, maker of the RunKeeper app. The purchase is the first step in ASICS’s five-year-plan to become a direct-to-consumer business. To do so, ASICS will need a direct line of communication with and data about its customers. Shoes and apparel provide neither – RunKeeper offers both.
In the past, brands that built businesses via mass-media marketing and retail channels relied on inexact measurements to understand and reach the audience for their products. Data taken from surveys and panels was the main source of such knowledge. The rise of digital marketing ushered in a new set of metrics through which to gauge the success or failure of marketing strategies and tactics: this is finally providing legacy brands with the data and tools they need to execute on the latest metrics.
Sports and fitness companies like ASICS have been particularly aggressive in moving into mobile. Under Armour has picked up four mobile app providers since late 2013, spending more than $700m. Adidas inked a deal of its own last year by paying $241m for runtastic. Weight Watchers, Anytime Fitness and TopGolf have also bought apps related to their core businesses in the past 12 months.
Having that direct line into customers will surely be a boon for ASICS; however, a mobile app is a business unto itself and the challenges of developing and marketing an app are growing. Our conversations with app marketers indicate that the cost of downloads has risen substantially in the past year or two, while our surveys show that downloads are increasing. Therefore, ASICS and its peers will have to compete for engagement with a growing cohort of apps on each user’s phone. In our 2015 US Consumer Survey, 29% of respondents had downloaded five or more apps in the past month, up two percentage points from the same survey a year earlier.
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