Puma sees GenAI personalization as DTC aid — What's Next is Everything

Puma is leveraging generative AI, specifically Google's Imagen 2 model, to enhance its branding and e-commerce strategies. The AI generates personalized website images based on user location, such as displaying shoes near Mount Fuji for Japanese shoppers. This shift has led to a 10% increase in click-through rates in India. However, Puma’s use of AI is not just about efficiency; it's focused on strengthening its brand presence in key markets like the U.S. and China, where competitors are strong.

Puma's reliance on wholesale, which makes up 76% of its revenue, has limited its direct-to-consumer insights compared to competitors. AI tools are seen as a solution to this gap, offering personalized experiences to customers, which can increase engagement and data collection. Puma’s e-commerce push with Google Cloud also aligns with broader industry trends, where brands like Nike and Under Armour face new competition from agile newcomers like HOKA and On Holding.

While AI helps Puma in personalizing the online experience and potentially gathering more customer data, the company still faces financial challenges. In August 2024, Puma adjusted its earnings outlook, citing weaker consumer demand, particularly in China. Despite these hurdles, Puma’s strategy highlights the growing importance of AI-driven personalization in today’s competitive retail landscape, even though widespread adoption of generative AI is still in its early stages.

German sportswear-maker Puma is tapping generative AI for its branding and online sales efforts, part of an expanded partnership with Google Cloud, the company said Tuesday.
Puma said it has already deployed Google Cloud’s Imagen 2 model to help it craft personalized website images corresponding to the locations of some online shoppers. For example, shoppers in Japan may see an image of trail running shoes on the foothills of Mount Fuji, the company said.
Google Cloud Chief Executive Thomas Kurian said the tool is able to create a relevant image in several minutes, whereas the traditional process of conducting a photo shoot would require several days.
“It is truly more than an order of magnitude reduction,” Kurian said. Puma declined to share specific numbers, but Kurian said, “On average what we see, it’s more than a 10 times speedup.”
Puma CEO Arne Freundt said he sees these generative AI-driven personalization capabilities as less about cost saving and more as key to building up Puma’s brand in areas like the U.S. and China, where it historically hasn’t been as strong a competitor. Right now Imagen 2 is simply personalizing based on geography, but in the future it could also do so based on age and individual sport preferences, he said.
Since deploying the tool, Puma has seen improved click-through rates by 10% in India, but it declined to share results of other markets.