Is It Possible For Adidas To Redeem Itself Here?

In the face of the continuing contraction of the US market and the mistakes made by CEO Herbert Hainer,

Finally, Mark Kim, North American president, recently proposed to rescue the US market.

Mark Kim, President of Adidas North America (Mark King)

In the past decades, the University of Miami sports team has been the domain of Nike.

Earlier this year, when Adidas won the sponsorship contract from its old rival and became a supplier of the whole body of the University of Miami sports team in the next 12 years, the outside world was somewhat surprised.

People are beginning to feel that Adidas seems to be breaking the slump in the US market.

However, from the reaction of University of Miami fans, people may think more.

Fans of the university sports team are opposed to replacing sponsors in social media.

"The students kept on asking me why I signed Adidas?" said the coach of the University of Miami sports team.

This problem has been plaguing Adidas in the US market and becoming the second largest in the world.

A great obstacle.

In 1970s, Adidas occupied an absolute leading position in the US market. After that, Nike still maintained an upward trend even though it was hit by Nike.

But in the past few years, Adidas's market share in the United States has been shrinking, and dropped to 7% in 2014.

In the 2014 fiscal year, sales of Adidas in North America fell by 6% compared with the same period last year.

Since 2012, the sports giant has not had a good life in the United States.

"The United States not only occupies 40% of the global sports shoes market, but also controls the world one hundred percent.

Cultural trends.

Matt Powell, a sports brand analyst, said, "to win the world, you have to win the United States."

Therefore, when people mentioned again and again, the sports brand Under Armour, founded in 1996, took the throne of the old Adidas "second of the United States" in the first half of 2014. Investors can only target Adidas CEO Herbert (Herbert Hainer).

They pointed out four mistakes Herbert Heiner made in the US market.

First of all, there is no communication between German headquarters and the US region.

Christine Noh, a sports brand retailer in New York, says that what kind of style will sell well in the US, and Adidas rarely listen to the opinions of local retailers in the US.

"If your management is in Germany and they do not understand the situation in the United States, then it will be difficult to carry out effective solutions."

She added.

The lack of celebrity endorsements in the US sports market is also regarded as a major mistake of Herbert Heiner.

It is clear from the endorsement of NBA players that the quality of Adidas's endorsement stars is not good, and its number is only 1/5 of Nike's.

In addition, Adidas's product turnover is too slow.

It takes an average of 18 months from product design to putting up the shelves of American stores. It is commented that such a long product cycle has hindered Adidas's capital operation.

Finally, there was a drag on Adidas and the poor performance of its Reebok (Reebok).

In 2005, Adidas purchased Reebok with up to 3 billion 100 million euros (21 billion yuan). Herbert Haina, who led the paction, hoped to enhance its brand position in the US market through Reebok.

But Reebok did not help Adidas win the United States, but fell into a long-term state of loss.

"When Reebok is struggling, Adidas has to pfer the brand's own funds to Reebok, which is a heavy burden."

A former Adidas executive said in an interview.

Faced with Herbert Heiner's mistakes in the past ten years, Adidas board did not have to forgive. In February this year, they announced the formal search for the new CEO.

A month later, the right successor has not yet appeared, but Adidas can't wait to change the decline in the US market.

To this end, Mark Kim, President of the new North American region (Mark King), publicly proposed the corresponding measures to save the US market in March 23rd to make up for Herbert Hainer's mistakes.

At the top priority, Adidas will empower the US executives and let the Americans solve the problem.

Presumably, the senior German headquarters had been aware of this problem before they appointed American Mark Kim as president of North America.

The new American says Adidas will be in frequent contact with US retailers and consumers to learn more about the US market.

In addition, Adidas decided to put more power on the North American headquarters in Portland, Oregon, where all the decisions on brand promotion, product design and sales in the US area will come from here.

"The management thinking from the German headquarters is very good. It's a real epiphany."

Mark Kim said he was optimistic about the move.

In view of the fast changing tastes of consumers in the US and the world, while the average product life cycle of Adidas has been up to 18 months, Mark Kim said that Adidas will supervise the efficiency of manufacturers and strive to shorten the product cycle to less than half a year.

From 18 months to half a year, the magnitude is so great that Adidas's production process is bound to face extensive adjustment.

By the end of 2014, the US market share of Adidas and Reebok was 7.1%, far from that of Nike's 45%.

In order to maximize access to us consumers, Mark Kim proposes to increase more retailers.

"Adidas hopes to work with retailers to improve the exposure of all kinds of products in stores."

Mark Kim said that in 2015, Adidas will further expand its cooperation with Dicks Sporting Goods of the United States.

To win the US market, Adidas knows they have to conform to the trend of American professional sports.

For this reason, Adidas gave up the contract of NBA official Jersey supplier and put it more accurately into the sponsorship endorsement of NBA superstar.

In addition, Mark Kim plans to invest more in the American professional rugby and major league baseball. Adidas has made relevant reserves, and in the next few years, it will increase the number of NFL and MLB players from the current dozens to five hundred.

Adidas's strategy in the US professional games is clear, allowing all professional stars to wear their jerseys and sneakers to drive the US market with the star effect.

The last question Adidas faces is what the American taste is. They haven't come up with a definitive answer yet, but Adidas has already made an attempt in this regard earlier this year.

They worked with the American rapper Kanye West to launch a Yeezy Boost with North American rock style sneakers.

Last month, the first wave of sale was launched in New York, and 9000 pairs of sneakers were robbed in ten minutes.

Therefore, Mark Kim said that next, Adidas will start from product design and make greater efforts in meeting the tastes of Americans.

To this end, Adidas also plans to continue to grab the designer from Nike and expand Adidas's Broolyn design studio to design more products for American consumers.

The response of Adidas and North American president Mark Kim is very comprehensive and full of determination, though it comes a little late.

But the huge US sports consumption market will not run away by itself, and the rest will depend on the implementation effect of Adidas.