"Adidas Brand Strategy"
adidas Strategy Preparing the adidas business for the future In marketing and distribution, personalisation includes provid- Like every world-class athlete, adidas is continuously trying ing tailor-made offerings – be it online or in stores. Personali- adidas strives to be the leading sports brand to be faster, stronger and thus more competitive. To further sation will be the brand’s lead innovation concept and a driving in the world – an ambitious yet realistic goal. focus on becoming a more efﬁcient organisation, a compre- force of the adidas business going forward. It will guide all One major lever to achieve this is the brand’s hensive “Streamlining Complexity” programme commenced efforts in product design and development, (digital) marketing at the beginning of 2008. The objective is to increase the efﬁ- and distribution and it is adidas’ goal to be the most personal broad and unique product portfolio spanning ciency of how adidas brings concepts to market, deﬁning clear sports brand by 2015. from apparel and footwear for professional responsibilities, and ensuring optimal external results in the athletes to premium fashion. It allows adidas marketplace. The programme is also designed to help adidas Partnership network strengthened reduce costs. In 2008, for example, adidas already achieved a The utilisation of promotion partners such as federations, to address multiple consumer needs, tackle signiﬁcant article reduction that will drive improvements in net teams, leagues, events, individuals and designers is an market opportunities from various angles as sales per article. In addition, this will reduce workload in the important part of the brand’s strategy. This not only serves well as be less affected by one-dimensional creation area going forward, facilitating higher focus on key to showcase the credentials of adidas products in the perfor- product initiatives. The Streamlining Complexity programme mance arena, but also to facilitate the extension of the adidas market risks. This product portfolio as well as will continue in 2009, providing a platform to maximise future brand in the sport-inspired lifestyle market. In 2008, the adidas’ commitment to excel in all relevant brand proﬁtability and a more dedicated focus on the brand’s Sport Performance division further strengthened its promo- segments differentiates the brand from com- core strengths. tional partnership network. In November, adidas announced a long-term partnership with the IAAF. Under this agreement, petitors and ensures solid market growth, while Innovation leadership through personalisation adidas will be the ofﬁcial IAAF athletic sponsor and licen- staying true to the brand’s values. Currently, adidas’ innovation philosophy encompasses every facet of the see product supplier, a partnership that incorporates every the brand focuses on ﬁve global priorities: brand’s business – from product design and development to aspect of athletics, and makes adidas the Ofﬁcial Sponsor brand marketing, promotion partnerships and distribution. In of the 2009 IAAF World Championships in Berlin. The brand Football, Running, Training, Basketball and this area, personalisation represents a key focus. Personalised extended contracts with two of the world’s most recognised Originals. product concepts at adidas include: football clubs: AC Milan and Ajax Amsterdam. Furthermore, the Russian Football Union was added as a partner – an impor- — Interactive product concepts such as miCoach – an indi- tant step for the brand’s future success in the Russian market. vidual training system launched in 2008, which can sense, Also, the sponsorship deal with the All Blacks, New Zealand’s understand and adapt to the consumer’s needs. iconic rugby team, was extended. In the Sport Style division, adidas has created a new platform – Originals by Originals – — Customised solutions such as the mi Originals platform or to increase its collaboration with some of the world’s leading the TUNIT™ football boot concept, which offer consumers the designers. Season after season, this programme will allow opportunity to specify certain product features. adidas to offer consumers cutting-edge footwear and apparel that reﬂects the diversity and creativity of the designers who — A broad selection of well-deﬁned product families such as work close to the brand. Jeremy Scott, Alyasha and Kazuki adiSTAR®, adiZero™ and Supernova™ and technologies such have each created mini collections for the launch of this initia- as CLIMA, TECHFIT™, FORMOTION™ and BOUNCE™, offering tive in spring 2009. consumers extensive choice, according to their individually deﬁned needs and requirements. 048 Group Management Report – Our Group Structure and Strategy — adidas Strategy Increasing cooperation with retail partners Own retail and e-commerce Sport Performance: divisional overview Success in both Sport Performance and Sport Style requires Own-retail expansion is an important strategic driver for adidas No other brand has a more distinguished history or stronger an effective distribution strategy and a solid network of reli- brand growth. While serving as a mechanism to expand distri- connection with sport than adidas; not only where the best able retail partners. The right presentation and availability bution where retail infrastructure is under-developed (such as meet the very best, like at the Beijing 2008 Olympic Games, of consumer-relevant products as well as excellent customer in many emerging markets), own-retail activities also give the but everywhere around the globe where sports are played, service at the point-of-sale are critical in this respect. adidas brand valuable insight into consumer trends and product posi- watched, enjoyed and celebrated. currently generates around 82% of its business with its retail tioning in all markets where adidas operates its own stores. partners. Two of the highest strategic priorities to drive future In addition, improving own-retail presence and processes will Everything at adidas reﬂects the spirit of its founder Adi Dassler. business growth with the brand’s partners are: – in the long run – also be beneﬁcial for enhancing other con- That means adidas intends to inspire, support and equip all trolled space initiatives as best practices in presenting brand athletes in the best possible way to help them achieve their — Consumer-oriented range segmentation today forms the image can be incorporated in these concepts. optimal performance. Therefore, adidas Sport Performance foundation for closely targeted brand activation plans. In this, remains the brand’s primary focus both in terms of product and adidas is working very closely with its main retail partners to 2008 marked a milestone in adidas own-retail history with the brand initiatives. The division will continue to generate at least fully align consumer propositions and to develop unique selling opening of the ﬁrst adidas Brand Center in Beijing a month 70% of adidas brand revenues going forward. Although the propositions in line with the partner’s target audience. In 2008, before the Beijing 2008 Olympic Games. As the largest adidas adidas Sport Performance division offers products in almost an example of this was the collaboration with the Intersport own-retail store in the world with 3,170 m2, the Brand Center every sports category, the key priorities are: Group around the UEFA EURO 2008™. adidas also seeks to offers products from all adidas categories under one roof. broaden its distribution network with the addition of new Other retail initiatives carried out in 2008 included reﬁning the — Football partners, in particular sports specialist or fashion specialist women’s and kids’ areas and a revised, more customer-friendly — Running customers, as the product offering is expanding continuously. footwear department in adidas Sport Performance stores. The — Training Sport Style division released new concepts for the Originals — Basketball — Retail space management (e.g. shop-in-shops) is becom- stores called Atelier and Studio. Furthermore, a refreshed ing the most dynamic business model for adidas and is a key Y-3 store concept has been launched and is already exceed- In all these areas, adidas strives to be the leading global brand part of the brand’s controlled space expansion. In this, the ing expectations. To fully exploit the potential of the new Style in terms of sales. Additionally, adidas plans to intensify its brand is cooperating with retailers along the entire supply Essentials range, adidas has opened numerous dedicated activities in the outdoor market see adidas Products and chain all the way through to the point-of-sale. Replenishment stores via the adidas franchise partners in China. Campaigns, p. 128 and to further extend its strong global market models secure high levels of product availability throughout position in the tennis category going forward. the season, allowing for quick adaptation to demand patterns. In 2008, adidas also successfully launched its e-commerce In addition, by increasing control over point-of-sale presenta- platform in four major European markets (Germany, the adidas aims to consistently present the brand attitude tion, regular brand statements and product updates give adidas Netherlands, France and the UK). In 2009, the United States “Impossible is Nothing” in targeted and relevant consumer higher ﬂexibility to generate consumer awareness. and selected European countries will welcome mi Performance communication. The “Impossible is Nothing” brand campaign online as part of the mi adidas® customisation solution. encourages consumers to achieve their own personal To support these initiatives, during 2008 the brand extended “impossible” goals – no matter what they might be – and the reach of its innovative web portal services and added underlines that adidas will help them in their pursuit of these attractive new features to its CRM platform in many countries goals. around the world. Going forward, adidas is ready to invest into new forms of cooperation to remain at the forefront of cus- tomer collaboration and partnership. adidas Group Annual Report 2008 049 Sport Performance – Football: expanding market leadership The brand’s philosophy is to inspire and enable runners on all We believe one of our major existing growth areas and key Being the most popular sport worldwide, football is clearly one levels. First and foremost, adidas focuses on building cred- long-term opportunities for the brand is women’s training. of adidas’ key strategic priorities. For over 50 years, adidas ibility with the high-performance athlete. This credibility is the In 2009, a campaign entitled “Me, Myself” featuring tennis has led all major developments in football boot technology and foundation for eventually tapping into the broader opportunity player Ana Ivanovic and basketball star Candace Parker will be balls. Building on its success around major sporting events in the running category, the casual runner. launched, recognising the personalised and individual needs of such as the FIFA World Cup™ and the European Football women who want to be “ﬁt to win” and “ﬁt for life”. Championship, the brand strives to increase its leadership In 2009, running will focus on personalisation as well as more position by continuously creating the industry’s top products exciting and feminine products for women runners. Using Sport Performance – Basketball: the “Brotherhood” grows and fully leveraging its outstanding portfolio of promotion the marketing mantra “Because Every Runner Is Different”, adidas is one of the leading basketball brands worldwide with a partners. adidas Running will introduce the exciting new family Gazelle in strong presence outside of North America. Increasing its foot- addition to current product families such as the adiSTAR® and print in basketball, in particular in the critical North American Promotion partners include leading football associations Supernova™ offerings. The huge track and ﬁeld support that market, therefore represents another key component of the (e.g. FIFA, UEFA), national federations (e.g. Germany, Russia, adidas provides its athletes with will also become apparent on adidas brand strategy. adidas intends to strengthen its position Spain, Romania, Greece, Argentina, Mexico, Japan), leagues the world’s biggest sporting stage in 2009, at the IAAF World in the category by emphasising the brand’s unique position- (e.g. Major League Soccer in the USA), clubs (e.g. Real Madrid, Championships in Berlin. ing – with a clear focus not only on individual but also on team AC Milan, Chelsea FC, Liverpool FC, FC Bayern Munich, River performance. Plate Buenos Aires) and individual players (e.g. Kaká, Lionel Sport Performance – Training: leading in innovation Messi, David Beckham, Michael Ballack). At adidas, training is the biggest category for both men and In 2008, adidas Basketball continued to leverage its unique women. Training supports the preparation needs of serious NBA partnership and developed the “Brotherhood” campaign In 2008, adidas continued to grow its market leadership in foot- athletes across all sports disciplines and is the industry’s larg- which will continue in 2009. Due to the NBA’s increasing vis- ball markets around the world, thanks to the brand’s strong est apparel category. Innovation continues to be an important ibility and popularity around the globe, the partnership repre- presence at the UEFA EURO 2008™. Going forward, the foot- strategic priority in this category. In September 2008, adidas sents an important vehicle to drive the adidas basketball busi- ball category will concentrate on the lead-up to the 2010 FIFA purchased Textronics, Inc., a specialist in integrating high-tech ness in Asia and Europe. With basketball overtaking football World Cup South Africa™. In addition, the FIFA Confederations heart rate, moisture and blood pressure monitoring technology as the most popular sport in China, adidas brought the NBA Cup in South Africa and the UEFA Champions League serve as into performance apparel. This acquisition will help strengthen to Shanghai in 2008. With the NBA live and 5IVE grassroots important platforms to showcase new products and marketing adidas’ leading position in the intelligent product category. events, and the introduction of TECHFIT PowerWEB as the concepts throughout 2009. Furthermore, adidas will continue to deepen its relationship ofﬁcial compression apparel of the NBA, adidas Basketball will with other key partners, providing athletes with insights, advice continue to excite consumers in 2009. Sport Performance – Running: building credibility and training programmes, which will be delivered on the adidas with high-performance athletes miCoach platform. Running continues to be one of adidas’ highest category priori- ties and is critical to the brand’s success moving forward. In addition to new innovations, training continues to evolve and Because of the category’s global importance, the brand is com- develop its existing industry-leading technologies. Updated mitted to support running with a substantial portion of overall gender-speciﬁc body mapping enables CLIMA to stay at the marketing spend. forefront of delivering optimal solutions for moisture manage- ment and body temperature control. TECHFIT™ compression, led by the unique TECHFIT PowerWEB proposition, will further broaden itself as a cross-category technology featuring on athletes in sports as wide-ranging as football and athletics to basketball, swimming, rugby and boxing see adidas Products and Campaigns, p. 129. 050 Group Management Report – Our Group Structure and Strategy — adidas Strategy Sport Style: divisional overview To address the needs of its diverse consumer groups and The opportunity or “new-ness”, however, will come through The market for streetwear and lifestyle fashion represents a maximise business opportunities, adidas Originals takes a leveraging what has been created through Y-3 and Originals to unique opportunity for sporting goods companies as it is more two-tier strategy to brand and product marketing: Statement expand the brand’s fashion lifestyle offer to more and different fragmented and larger in size than the market for products and Core. Statement product concepts aim to generate buzz consumers. In 2009, adidas will bring the Sport Style division to used in sports activity. In addition, proﬁtability in the sports and to add freshness to the brand. Core product concepts aim another level with the launch of the adidas SLVR Label, a pure lifestyle market is typically higher as a result of lower R&D to generate sales volumes by presenting a constant collection fashion brand for the modern cosmopolitan consumer, offering expenses. that is uniquely adidas. In essence, Core is the bread and butter “simply perfect” garments, shoes and accessories. The adidas of adidas Originals and includes all collections that consumers SLVR Label celebrated its premiere at the New York Fashion adidas was the ﬁrst brand to credibly leverage its sports assets have come to depend on. Week in February 2009, which will be followed by the opening in the lifestyle arena and as a result is regarded as a legiti- of its ﬁrst store worldwide. mate sports lifestyle brand. What started as a niche business The brand marketing focus is with the core consumer, so in has developed into a signiﬁcant contributor to the brand’s 2008 the marketing efforts behind adidas Originals were also Sport Style – extending brand reach through top line with potential to represent up to 30% in the medium increased signiﬁcantly with the ﬁrst global campaign including adidas Style Essentials to long term. To best tap the potential of the sports lifestyle television and cinema, the “Originals House Party”, featuring In 2008, adidas took a big step forward with the expansion of market, adidas created a dedicated Sport Style division prima- entertainment icons like Missy Elliott and Katy Perry, or sports the Sport Style division through the introduction of adidas rily focused on its Originals and Fashion businesses (e.g. Y-3, icons from Ilie Nastase to David Beckham celebrating “60 Years Style Essentials. adidas Style Essentials is a complete offering Porsche Design). of Soles and Stripes”. of footwear, apparel and accessories which takes its design inspiration from the entire brand, both Sport Performance and In 2009, adidas Originals will complete the full transition Sport Style, but offers it up in different distribution channels Sport Style – adidas Originals: from niche to from niche marketing to mainstream with the largest global and at more accessible price points. It capitalises on existing fashion mainstream Originals brand campaign ever, coinciding with the 60th anni- trends and brings them to market more rapidly than traditional The cornerstone of the Sport Style division is adidas Originals: versary of the brand. sporting goods timelines. adidas Style Essentials is primarily the original lifestyle brand, born in sport heritage but living distributed through mono-branded stores in Asia and through in contemporary lifestyles. adidas Originals is uniquely posi- Sport Style – adidas is fashion: Y-3 and the key account partners in North America and Europe. tioned amongst its competitors in that it unites and touches adidas SLVR Label diverse pockets of popular culture around the world. Its biggest Since 2002, adidas has rapidly expanded Y-3, a collaboration strength and point of difference is the ability of the Trefoil to with one of the most innovative and highly regarded global be a relevant part of people’s lives – in whatever lifestyle they designers: Yohji Yamamoto. Y-3 successfully combines the have: skater, rocker, artist, musician, sneakerhead, sports worlds of fashion and sports and makes adidas a true pioneer fan, etc. in the ﬁeld of sport-inspired high-end, premium fashion. adidas is the only sports brand with a greatly anticipated and With a holistic offering in products and communications, adidas well-regarded show at each New York Fashion Week. Originals speaks to and engages the youth audience in authen- tic, creative and new ways with the “Celebrate Originality” Controlled space will be the main strategic priority for Y-3 philosophy. in the upcoming years. By the end of 2010, adidas targets to have 40 Y-3 stores (including franchise and own-retail stores) located in the world’s top shopping destinations. Furthermore, a Y-3 online store has been launched in the USA in 2008, with the extension of e-commerce to other markets following in the future. adidas Group Annual Report 2008 051