How Big Is Adidas'S Business Ambitions?

For one

The analysis of performance is based on three dimensions: region, brand and channel.

In the past two dimensions,

The performance can be described as impeccable. In addition to Russia, the annual sales of other regions can be recorded double-digit growth.

As for brand level, Adidas Originals, Adidas Neo and Yeezy series are never worrying.

For Adidas, the adjustment space is more obvious, that is, the dimension of sales channels.

According to the world clothing and shoe net, in the 2017 earnings conference, Adidas CEO Caspar Rothd highlighted the huge stimulation of the electricity business to the growth of the company's performance.

Obviously, if Adidas wants to become the world's first sports company, the online sales channel must be strengthened.

Adidas is pforming into digitalization and personalization. At the end of last year, the official shopping APP was launched. The main idea is personalized recommendation for different customers.

The APP has been launched in the UK, the United States and Germany, and will be landing in more areas in the future.

Adidas Global

Joseph Godesi, Joseph Godsey, said that this APP will become the core of the company's future mobile business, and the experience it provides must be innovative enough.

On the shopping APP, consumers can complete the whole process from personalized recommendation, customer service system consultation to online payment, which greatly improves the efficiency of purchase.

Moreover, in order to expand the millennial consumer groups, the online channel is indeed a growth pole that can bring significant effects.

Adidas's online sales rose by 57% in fiscal year 2017, and sales in online channels increased even faster in the Greater China market, where the overall performance was the best.

"As time goes on, we will have fewer stores, but the overall performance will be better."

Rothd said in a recent interview with a British journalist that the number of stores in Adidas will shrink in the coming year.

"Our website will be the most important online store in the world."

It is reported that Adidas has begun to move after entering 2018, and 110 stores will be closed in the US alone.

The company plans to increase its electricity supplier sales from 1 billion 600 million euros last year to 4 billion euros by 2020.

In Roth's view, the core of Adidas's business is consumers, and brands should try their best to communicate more directly with consumers, both in brand marketing and at the level of channel development.

Royal Bank of Canada analyst Pilar Dadania (Piral Dadhania) frankly, the growth rate of Adidas online channel is impressive, the company's "2020 goals" also showed enough ambition, in general, Adidas's online sales prospects are optimistic.

Moreover, the profit margin of online channels is even higher, which will help to boost the company's overall performance and share price.

Many industry analysts are worried about the arrival of the so-called "end of the retail industry". Sales of physical stores are falling, and more and more retailers are turning their attention to the channel of e-commerce.

Rothd said that when considering future resources and infrastructure investment, the company will give priority to online channels.

This year, Adidas's capital expenditure plan is 900 million euros, more of which will be used for digital channel construction.

Adidas CFO Hamm Ormeier (Harm Ohlmeyer) also pointed out at the 2017 earnings conference that the company is investing more in logistics and striving to achieve the day in the main market, in order to stimulate the volume of e-commerce channel pactions.

{page_break}

Rothd also said that investment logistics is necessary, because the logistics system with e-commerce is a completely different mode.

"When you ship to a large retail chain, the target goods may be a whole batch of sneakers, but when facing the online terminal customers, you may only need to deliver a pair of shoes or a suit."

Adidas will hire 200 employees with strong digital focus capabilities, which can also be seen as part of the digital pformation of the company.

In addition to self built online channels, Adidas has gradually established its own electricity supplier partnership camp.

In the group's highly valued American market, Adidas launched an early collaboration with Amazon, and its old rivals did not take this step until last year.

In the European base camp, Adidas has been working with Zalando, Europe's largest fashion business platform two years ago, to deliver products on the platform.

Nowadays, the whole shoe and clothing industry is carrying out a channel shuffle. The fast fashion brand, which is known for its high sales volume, is also facing the retail crisis. The online sales channel has become a life-saving straw for everyone.

Although e-commerce will bring about the increase of logistics cost, there is no other better way to solve the urgent problem.

At the end of last year, H&M first settled in Tmall, followed by Zara's parent company Inditex group, which made plans to sell its 16 stores, so that more liquidity could be pferred to online channels.

By contrast, Adidas did not experience performance and inventory problems, but the trend of retail pformation is closely related to the long-term development of enterprises.

Insiders pointed out that under the impetus of e-commerce, social media and digital communication, the traditional footwear industry has to face pformation.

Adidas currently has 2500 direct outlets, 1.3 brand franchises and 15 wholesale stores worldwide.

According to the plan, the total number of stores will be reduced.

Of course, this practice is not Adidas's patent. Nike is driven by the strategy of "facing consumers directly", and is also consciously selling channels under the simple line.

In fact, digital pformation is also a form of brand speed increase. Specifically, new products should contribute more value to enterprises.

Adidas not only guarantees the supply of exploding money, but also shortens the supply chain cycle of products, which covers various links such as production, pportation, storage, terminal logistics and so on.

Adidas is already developing robotics factories. In addition to maximizing the supply chain cycle, it also promotes the customization of customers to the production stage.

Of course, the whole system needs a long polishing time, but Adidas is shifting its focus step by step.

With the development of Internet technology, consumers are more capable of receiving and integrating information from all sides, which virtually shortens the gap between brands.

In Roth's view, Adidas has been able to maintain its high growth in the Chinese market. Besides explosive sales, relatively flexible and decentralized channel sales are also important reasons.

Adidas is bringing this experience to North America and the entire sales system of the company.

But consumers' behavior portraits are difficult to generalize, and shopping demand tends to be complicated. For brands or retailers, it is still necessary to allocate resources reasonably, creating a better user experience is always the first priority.

More interesting reports, please pay attention to the world clothing shoes and hats net.