Sometimes calamity leads to opportunity.
While the global impact of the pandemic has cast a shadow on millions of businesses, Puma North America’s president and chief executive officer Bob Philion said the spike in e-commerce sales and increasing interest among consumers in middle America have helped the athletic label gain traction.
Philion delivered “The Big Brand Perspective” Thursday afternoon as part of the Sports and Fitness Industry Association’s virtual conference, “Back on Track: Insights and Strategies.”
He said, “The biggest shift has been the e-commerce platform. In the past, as we were meeting with retailers, there was this side conversation about what would go on the e-commerce platform. That was between 5 and 15 percent of a lot of people’s business. Some were a little bit higher, maybe 10 [percent] was the average. Of course [there was] that spike and it hasn’t come down that much.”
During the COVID-19 crisis, Puma launched an online-only outlet. The athleticwear manufacturer and retailer saw a 61.6 percent year-to-year decline in first-quarter net profits to $39.1 million. While first-quarter sales fell from $1.42 billion to $1.4 billion, e-commerce sales reportedly increased by about 40 percent, due to self-isolating consumers.
The rise in e-commerce has helped to “open up retailers’ eyes” and has led to opportunities for Puma, Philion said. Noting how e-commerce provides “a more level playing field,” the ceo said, “One of the challenges we have as a brand is as you go into a store, finding Puma, our position in the store, we’re always fighting to get in the windows, in that front bay, that table [near the entrance]. E-commerce has this amazing way to level the playing field overnight.”
The online growth has changed how Puma is talking to its accounts and planning its business. Philion said, “It’s almost like the record’s got to skip, when we talk about our sell-in now. We really need to make sure we have separate strategies for the digital basis. That’s not just what the assortment looks like but how we market that on the operations’ side and how do we make sure the user experience is right.”
On another front, Puma has seen strong sales in tourist-heavy stores and locations, Philion said. But during the pandemic, the brand’s sales in middle America have created some of the stronger growth, and bigger opportunities. Conversely, cities like Miami, Orlando and Los Angeles have really been hurt, during COVID-19.
Philion chalked up the consumers’ increasing interest in some of those states to the brand’s momentum, and the fact that sometimes things take time. “There are some slower markets out there. Part of it was just the nature of trends and when they get to different markets. Basketball has helped. That visibility has a halo effect and people see the Puma cat in a new light,” he said, referring to the multiyear partnership that Puma signed with the National Basketball Association last year.
All in all, Puma is getting introduced to some of the middle America markets through its retail partners and through some brand initiatives, Philion said.
Asked about his leadership philosophy, Philion said, “‘Brave, confident, determined and joyful’ are the words that we use for our values here. They help me inside the company as well as out. That first one — being brave — is a key one for me and something that I’ve used for my career. This idea of being uncomfortable about your situation and trying to grow into that and then take some more risks [is important]. Being confident is about having some conviction about your decisions and sticking with it. Being determined is about not giving up and hustling. And being joyful is key. That’s what I love about Puma: we try to have some fun and not take ourselves too seriously. Obviously the business is serious. At the same time, I’d like to think that we’re in the smiles business as well.”