The strategy of this sports brand is all about being open and responsive, a way to ensure it prospers through the continuing athleisure boom
In recent years, ‘athleisure’ brands – sportswear companies that sell sports clothes and shoes also worn by customers in their day-to-day lives – have enjoyed a boom. By 2020, according to research from Morgan Stanley, this worldwide market will be worth more than $350bn. That’s a figure that encompasses both high-end fashion brands and budget brand leggings.
Adidas , an Elite brand in our research, has been a huge beneficiary of this trend. That’s in great part because it has successfully marketed itself on the basis of its rich history. This is a brand with a story that dates back to 1924. Its three-stripe logo – branding purchased from a Finnish company in 1952 – is instantly recognisable. In the forthcoming World Cup in Russia, it will adorn the shirts of, among other nations, Argentina, Spain and the defending champions, Germany.
But heritage is clearly not enough in itself to sustain a company that generated revenues of €19.29bn in 2016, especially with direct competitors such as Nike constantly trying to take market share. Rather, the history of Adidas is necessarily one of reinvention – and also of having an overarching strategy. The group’s current business motto is “creating the new”, an idea that rests on three strategic pillars – “speed, cities and open source”. Speed here refers to being quick to react, “fast in satisfying consumer needs, fast in internal decision-making”, while open source refers to the way the company wants to collaborate with “external partners from the worlds of industry, sport and entertainment as well as consumers”. The company’s collaboration with rapper Kanye West, for example, has generated huge publicity.
Perhaps most intriguingly from the perspective of retail, the reference to cities refers to six key metropolitan centres: New York, Los Angeles, London, Paris, Shanghai and Tokyo. These are united in being cities where consumers buy above-average volumes of sporting goods, which in itself means they’re places where Adidas can generate sales.
They’re also cosmopolitan cities that play an influential role in shaping trends elsewhere in the world. As long as the athleisure boom continues in these areas, it will likely continue around the world, so it makes sense for Adidas to focus its marketing in these cities. Part of that presence is via flagship stores and the company is also investing in its digital offerings, although it’s worth noting here that a recent Erudite report criticised its UK mobile performance.
Taken overall, the strategy reveals a company that’s working hard to incorporate an outward-looking ethos in all that it does, a way to use its presence in consumers’ lives to ensure it continues to be a favoured brand. And if that involves some old-fashioned marketing pizzazz, like a recent stunt to sell trainers in Berlin at €180 a pair that doubled as annual travel tickets valued at more than €700, don’t be too surprised.