Adidas Speeds Up Expansion Of North American Retail Channels

How to put more products on the shelves of the United States as possible? This is Germany.

Adidas is thinking about the problem.

According to the world clothing and shoe net, recently, commercial media Business Insider reported that

Harm Ohlmeyer, the group's chief financial officer, said in a meeting with UBS, a financial investment agency, that the brand is trying to accelerate the expansion of North America.

The size of the retail channel, but did not disclose the specific expansion plan.

"Adidas's focus in the North American market is firmly focused on expanding the scale of marketing channels to boost profitability," Fred Speirs, a UBS analyst, wrote in its report.

In November 9th, the German brand just released the 2017 quarter fiscal third quarter earnings, global sales grew 12% to 5 billion 677 million euros.

In addition to big China once again becoming the fastest growing region in the world, Adidas has gained 23% year-on-year growth in North America, where sports consumption is weak.

Among them, the growth rate of Adidas's main brand in the North American market is as high as 31%.

By contrast, the latest report released by Nike in late September shows that the North American market as the largest source of revenue has fallen by 3%, dragging down Nike's overall performance, making it the slowest quarterly growth in nearly 7 years.

The biggest problem with Under Armour also occurred in North America, and sales fell 12% in the third quarter.

Visible, Adidas's quarterly growth is considerable.

As the largest market with the 1/3 share in the world, the North American region is almost the competitive domain of giant brands.

"If you want to be the number one in the world, you have to take the first place in the North American market," Mark Kim, President of Adidas North America, said in an interview this April.

To their satisfaction, the data released by NPD show that the market share of German brands in North America has risen to 5% from 11.3% a year ago.

Despite the outstanding performance of Adidas in this important market in the first three quarters of this year, the brand remained cautious.

"We think there is still a long way to go, and far from what we want to gain in the US market. That is why we continue to invest heavily," Adidas chief executive Rothd said in the third quarter.

As an investment increase in Roth's mouth, Adidas announced earlier that it would spend an extra 700 million to 800 million euros on its marketing business before 2020. In August this year, the German brand just signed an agreement with the Professional Football League of America, and the two sides will continue their long-term cooperation to 2024.

Now, apart from the marketing moves, Adidas also has a plan at the sales level, which is to increase the layout of retail channels.

If there is no accident, the brand will continue to open its own stores and strengthen cooperation with sporting goods retailers.

In the words of chief financial officer Harm Ohlmeyer, they hope that more and more products will appear on various shelves in the North American market.

As for Adidas's specific practices, they did not disclose it to the outside world.

It is worth noting that Adidas has also acted in the North American e-commerce channel.

Recently, the German brand launched its first mobile terminal application. The software named Adidas is equipped with a complete shopping function, the first batch of on-line countries for the United States and Britain.

In addition, new applications have personalized functions. Users can receive their own product information flow after entering personal information. With the increase of purchase and browsing records, product recommendation will be more targeted.

Earlier, when talking about the reasons for Adidas's popularity in the Chinese market, CEO Rothd has concluded that more stores, franchise licensing and e-commerce channels.

Today, Adidas is bringing its successful experience to the North American market.

Nike announces reduction and optimization of retail terminals

What's interesting is that contrary to Adidas's strategy, US brand Nike is trying to cut down its retail channels in the local market.

According to the results released at the end of September, Nike's gross profit margin dropped by 180 basis points to 43.7%, which was mainly affected by the reduction in sales.

Wall Street analyst Camilo Lyon said in the report that many sporting goods dealers cope with weak demand through promotions, while dealers and other wholesale customers currently occupy about 3/4 of Nike's business.

In order to get rid of some unhealthy channels, in October this year, Nike announced that it would carry out large-scale reform in the retail terminal, and cut 3 000 partners to 40 large retail platforms, such as Foot Locker and high-end retail brand Nordstrom, and speed up the layout of the DTC business directly.

In addition to abandoning the small and featureless mediocre channels, Nike is also interested in optimizing channels, including requiring channel stores to give enough room to fully display their products and marketing designs, and store employees who are trained by Nike to explain, select and match products for consumers.

To this end, Nike will provide some products and marketing funds to some channel providers, or even a certain discount.

It can be seen that Adidas is concerned about the number and scale of channels, while Nike focuses on the quality of channels. This is the difference between the two sports brands in North America.

In fact, the strategy of the two giants is not the opposite. This is related to their respective situation. Some of the channel's sales promotion performance has already affected Nike's performance health. For Adidas, who has burst out of the money, beautiful financial results show that the sports and leisure craze has not reached the critical point, and they have reason to put more sports shoes on the shelves while the market is hot.

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