Puma Turns to AI to Strengthen Its Brand and Boost Online Sales

Puma, the German sportswear brand, is expanding its partnership with Google Cloud to integrate generative AI technology aimed at enhancing its brand identity and digital customer experience.

By deploying Google Cloud’s Imagen 2 model, Puma is crafting personalized online imagery based on customer locations, such as displaying trail running shoes near Mount Fuji for shoppers in Japan.

The company’s leadership sees AI as a strategic tool to build brand presence in crucial markets like the U.S. and China, where it has historically lagged behind competitors.

The initiative also highlights Puma’s efforts to shift from its predominantly wholesale business model to a more direct-to-consumer approach, enhancing data collection and customer interaction capabilities.

Key Points:

Partnership Expansion: Puma is deepening its relationship with Google Cloud to use AI tools, specifically the Imagen 2 model, for personalization in its online sales strategy.
AI Implementation: The technology personalizes images on Puma’s website based on geographical locations, potentially evolving to personalize by age and sport preferences in the future.
Strategic Focus: Puma aims to leverage AI for brand enhancement in key regions such as the U.S. and China, focusing on establishing itself as a high-performance and innovative brand.
Improved Engagement: Since implementing the AI tool, Puma reported a 10% increase in click-through rates in India, though results for other markets were not disclosed.
Challenges in Transition: Puma’s heavy reliance on wholesale (76% of sales) limits its access to customer data compared to direct-to-consumer models, making this AI push crucial for building direct relationships.
Broader Market Context: The company’s performance has faced recent setbacks, including subdued consumer sentiment in China, impacting earnings and sales.

Key Quotes:

Arne Freundt, CEO of Puma: “We need to be more clearly anchored as a true high-performance, innovative sports brand in the consumer’s mindset.”
Brendan Witcher, VP at Forrester Research: “Even small changes, like the geographically personalized website imagery on Puma’s website, can make a difference in terms of starting a dialogue with a customer.”

Puma’s move toward AI-driven personalization reflects a broader trend among brands seeking to close the gap between themselves and their consumers, especially for companies traditionally dependent on third-party retailers.

By integrating AI technology, Puma aims to build a more direct and meaningful relationship with its customers, gaining insights and data that can drive future growth and brand loyalty.

Source: https://www.wsj.com/articles/puma-wants-to-improve-its-brand-ai-might-help-8be47221