A Case Study on Under Armour: Identifying Brand Weaknesses Using Sentiment Analysis

You may remember that just a few years ago, Under Armour was considered one of the biggest sportswear brands in the world, valued at over $5 billion and equivalent to frontrunners like Nike and Adidas. Now, the company is facing exceptionally weak sales, a valuation sliced in half since its peak, paired with a single-digit stock price that’s been on the decline for the past decade.

When we try to understand the problem at its core, we have to understand an underlying consumer principle: procedural justice. Procedural justice describes how consumers’ perceptions of the processes involved with a brand exceed the importance of the actual outcome or product. It’s one of the key pillars that determine customer satisfaction for a company.

What the Data Shows

There are certainly aspects of Under Armour’s actual brand and product offerings that we could attribute their decline to, but the best way to figure out what the exact problem is, is to hear from the customers themselves. We used one of our models to analyze brand sentiment data from the review site TrustPilot and found some pretty interesting results:

Clearly, many of the main issues customers had with Under Armour weren’t with the products themselves, but the overall customer experience. The majority of complaints revolved around customer service, the delivery and refund process, and overall logistics.

We can actually see a peak in customer dissatisfaction around when the pandemic was at its peak. This makes a good amount of sense seeing as customer expectations generally began to increase everywhere as a result of the pandemic, leading consumer companies to start aggressively innovating to speed up delivery times and invest in e-commerce and digital branding. Unfortunately for Under Armour, it seems that they were one of the many brands that lagged behind and haven’t been able to keep up with all these rapidly growing consumer demands since.

Brand Sentiment as an Indicator of Company Performance

In the press, a lot of the blame is being shifted toward Under Armour’s dependency on the wholesale market and an overall slump in the sportswear market.

However, this isn't a perfect explanation when we look at competitors including Adidas, whose stock price has increased by 28% the past year, or Nike, whose stock price has still risen by 10% the past 5 years despite its poor performance this last fiscal year.

In fact, we can actually see a correlation here between the overall sales performance of these brands and their NPS (net promoter score).

The NPS of a brand is one of the key indicators of consumers’ sentiment toward a brand and a company’s overall customer experience. And positive customer experiences directly translate to stronger brand trust, positive word of mouth, and therefore greater sales quantity. Promoters are considered active advocators of a brand, whereas detractors are considered those who may advocate against a brand.

Under Armour not only has a relatively low percentage of promoters, but also has a high proportion of detractors compared to other major players in the industry. This means that there’s not only a deficit of positive word of mouth for the brand, but that there are also tons of angry customers who are likely telling people NOT to buy from Under Armour.

What Now?

Luckily, our data tells us exactly which aspects of Under Armour’s customer journey are painpoints that need to be fixed.

It suggests that the company may want to switch their focus from the products themselves to the behind-the-scenes operations driving customer experience. This could mean strengthening supply chain logistics, changing up customer service methods and employee training, or investing in more efficient delivery procedures.

So even if customers can’t get the outcome they had hoped for (ex. lost packages, long delivery times, etc.), Under Armour can still make the overall process behind the result satisfactory for customers. And without fail, we can always rely on the tried and true method:

• Treat customers fairly (be consistent)
• Explain procedures clearly (to avoid mixups, confusion, or unmet expectations)
• Give customers a voice (acknowledge concerns and complaints and create equitable solutions)
• Apologize (sympathy always goes a long way)

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