Sports fashion resumes investment in marketing in 2021 after the return of events

Sports fashion once again takes care of its image. With the return to stadiums and sporting events, the giants of the sector have returned to prioritizing investment in marketing, which they had cut in 2020 due to the collapse caused by the pandemic.

Last year, the American fashion giants Nike and Under Armor and the European Adidas and Puma cut their investment in marketing by almost 700 million euros and allocated the capital to reinforce their structure, in areas such as technology or logistics.

The four major sports fashion groups resumed investment in marketing in the last year and they increased the joint output in this area, key for the sector, characterized by high investments in new launches or links with athletes and sports entities with the aim of strengthening their relationship with the final consumer.

Nike ended the 2022 financial year (closed in May) with marketing expenses, which the group calls demand creationof 3,850 million dollars, 23% more than in the previous year due to “the normalization of spending on brand campaigns and the continuous investments in digital marketing to support the growth in demand in this segment”.

In 2021, the Oregon giant reduced its marketing investment by 13% mainly due “to lower expenses for our brand events and retail operations.” In the last financial year, however, the American giant has lost some sponsorships, such as Russia’s Spartak, which Nike canceled after the outbreak of the war in Ukraine, or Sporting, which has signed with Puma for the next two seasons.

Puma has been the company that has increased the most in marketing in the last year, up to 1,309 million euros, 24.7% more than in 2020, when it reduced the item by 5.6% and reinforced warehouses and logistics to meet demand. Investment in this category, which also includes the retail business, accounts for 19.2% of the total.

“The increase was mainly due to higher marketing expenses, the increase in stores and higher distribution and storage costs related to sales,” explains the German company in its annual report.

After returning to physical events, in the last year, Puma has signed agreements with Grupo Baskonia Alvés and four players from the World Padel Tour. In the first six months of 2022, the German company has continued to increase the expenses of this item, although it does not detail the figure.

In the case of Adidas, the German group increased its investment in marketing by 7.3% in 2021, to 2,547 million euros. “Marketing expenses are one of our largest operating expenses and, at the same time, one of the most important mechanisms to drive brand appeal and revenue growth,” the German group points out in its annual report.

In 2021, the company relaunched its campaign Impossible is nothing, which was originally launched in 2004 by the boxer Muhammad Ali, with the aim of transmitting hope “at a time when optimism in the world was scarce”. Among the athletes who participated in the last campaign are the soccer player Lionel Messi, the athlete Peres Jepchirchir and the basketball player Candance Parker, among others.

In the first quarter of 2022, the German company has continued to increase the marketing budget, with a rise of 19%, to 641 million euros, “which reflects additional investments in various brand campaigns and support for the launch of new products ”.

For its part, Under Armor allocated 98.8 million dollars more in marketing in 2021 and closed the year increasing spending on this item by 18%. The investment was directed especially to Asia Pacific, with the aim of gaining positions in the region.

However, the company explained in its annual report that due to increased competition “the costs and return on our sports sponsorship investments may become more challenging and could affect the value of our brand image.” The company primarily sponsors college clubs and athletes.

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