Adidas Is Not Satisfied With The Status Quo, And Seeks For Its Ambition.

According to the world clothing shoes and hats net, Germany Sports brand group Adidas (ETR:ADS) CEO Kasper Rorsted is not satisfied with the current situation. He has greater ambitions for the performance of the group.

Kasper Rorsted said in its latest earnings conference call that adidas Group's goal is Shoe shoe This year's sales will increase to 40 million pairs. By 2020, it will exceed 50 million pairs to earn 25 billion euros, and expect to continue to increase the exposure of the products among millennial consumers.

Stan Smith, driven by fashion trends, is a popular shoe item in the history of Adidas.

To compete with Nike, the US market is very important. According to the latest data, the sales volume of Adidas and Nike outside the US has been on the same page. According to the statistics of Deutsche Bank Deutsche Bank, as of March, the share of Adidas in the American sports shoes market was 11% and Nike was 55%. This is a tough battle for Adidas. Kasper Rorsted also said that the brand loyalty of Adidas in the US market needs to be improved. It will increase investment in the US market, improve the speed of the supply chain, and expect to sell more full price products.

For the time being, Stan Smith is the core product most likely to help Adidas achieve its goals. But in fact, the golden age of Stan Smith may be declining, and more and more products are being spanferred to discount stores because of poor sales. To better compete with Nike for market share, Stan Smith alone seems to be a bit of a struggle for Adidas, and finding the next couple of "Stan Smith" is becoming an urgent task for the group.

Adidas brand strategy and business development director Arthur Hoeld also said that the group's confidence in Stan Smith has been far behind, hoping to develop new best selling products. Then, can Adidas copy the myth of Stan Smith, and create new products to stimulate and maintain the freshness of consumers' Adidas?

Comparison of the growth trend of Adidas and Nike in recent 5 years

Adidas growth in the first quarter of the world in various regions

In sports shoes market, every ten years, the new trend will take place. It is undeniable that Adidas has seized this opportunity.

Born in the 70s of last century, Stan Smith is the most successful single product of Adidas in the past ten years, and it is also the essential trend of young consumers. Stan Smith is the first pair of sneakers that Adidas has ever had. Originally it was tennis shoes specially designed for French tennis player Robert Haillet. Later, when Adidas signed the American tennis Grand Slam player Stan Smith, she named the tennis shoes "Stan Smith".

According to the data, under the careful planning of Adidas, the total sales volume of Stan Smith shoes is much higher than that of other shoe groups of the group. In 2012, Adidas first used the hunger marketing strategy to withdraw all the Stan Smith from the market, and reduced the supply to attract consumers' attention. By the middle of 2013, Stan Smith was almost impossible to buy on the market. Many fans wrote letters and protested strongly and urged Adidas to re sell Stan Smith.

In fact, the German traditional sportswear retailer is working hard to make himself cool.

After stimulating the strong demand of consumers, Adidas used the star effect to spread in social media, collaborated with celebrities such as A$AP Rocky and Alexander Wang, publicized Stan Smith shoes, and made a two minute network video specially for the shoes, pushing Stan Smith to a new peak.

At the beginning of 2014, Adidas began to store Stan Smith in department stores, adding rich color matching and design of vamp such as cracks and gauze for consumers' choice. In addition, Adidas also invited singer Pharrell Williams to hand draw 10 Limited Edition Stan Smith in Paris famous buyer shop Colette. Adidas global brand director Eric Liedtke said he hoped consumers could repeat 3 to 5 pairs of Stan Smith instead of buying only one pair.

Data show that the Stan Smith series sold 8 million pairs in 2015. Since its appearance in 1971, the shoe has sold more than 50 million pairs of shoes. The Superstar, which was born almost the same time as Stan Smith, was launched by adidas Group in 2015. After launching 50 color matching with Pharrell Williams in 2015, the total sales volume reached 15 million pairs, which contributed more than 1 billion US dollars to Adidas. In the first time in ten years, it beat the competition and became the best selling sports shoes in America last year.

Although adidas has not released specific data, NPD Research Institute expects sales of Adidas in the us to grow five times over the same period last year, including sales of Adidas Originals series including Stan Smith and Super Star. The sales volume increased by 80%, which is more than three times the sales volume of professional shoes such as basketball and football.

Comparison between Adidas and Nike's performance last year and 2020 target

In the 3 months ending March 31st, adidas Group's sales grew by 18.9% over the previous year, 5 billion 670 million euros, operating profit increased 29% to 632 million euros, gross profit margin was 49.2%, net profit rose by nearly 30% to 455 million euros. Adidas's brand performance increased by 18% over the same period, of which Adidas Originals and Adidas Neo all recorded double-digit growth, while Reebok sales increased by 13% over the same period last year. From the point of view of channel, adidas Group's growth in e-commerce performance in this quarter is particularly strong, with sales growth of 53%.

Sports brands betting on fashion and leisure products are not uncommon nowadays. The concept of fashion sports is everywhere. Adidas founded Originals series more than 10 years ago. Puma has won consumers' favor through the fashion series of Fenty by Puma. Now fashion products have become the main driving force for the growth of sports products such as Puma.

Citibank's data show that sales growth of Adidas now depends mainly on leisure products, star cooperation limited money and other fashion products, not brand core sports shoes. There are people in the industry who question whether future entertainment stars will sell more shoes than athletes. The former CEO Herbert Hainer of Adidas said in an interview that "it is not common now, but it will definitely be."

It is noteworthy that in addition to professional sports brands, luxury brands such as Prada, LV and Gucci have also launched high priced luxury sports shoes to attract millennial consumers.

From the data point of view, Stan Smith has indeed brought huge benefits to Adidas, but the sales volume of products such as Stan Smith and Super Star has begun to decline, as well as the fact that developing new and best selling products has become a top priority for Adidas.

Looking back at Adidas's other classic products, NPD analyst Matt Powell believes that Adidas's 1950 indoor soccer shoes Samba, 1960 Gazelle and 1992 Campus all have potential to become the next Stan Smith.

Matt Powell emphasized that just as Stan Smith herself had never thought of naming her products would be related to young people aged 14 to 24, another new product of opening Adidas cash cows might be among them.

But what can not be overlooked is how to captivate Chinese consumers who love to follow suit. In the first quarter of this year, the performance of Adidas Greater China continued strong, sales revenue rose 30% to 990 million euros over the same period last year, and is about to become another brand of the 1 billion euro club in the market.

It is clear that the German sportswear retailer is constantly trying to make himself cool and become the Nike's most headaches.

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