Adidas to focus on speed, key cities and open source

20 Jul '16

6 min read

Driven by these 'Speed' initiatives the Group expects to significantly reduce the risk of overbuying stock, capture additional revenues and notably increase margins: By 2020, the company forecasts to generate 50% of its net sales with speed-enabled products.

In addition, the Group's share of full-price sales across all speed ranges is forecasted to improve by 20% over the next five years.

"Our goal is to give consumers what they want when they want it. Speed is one of the most powerful levers for our Group to do so. It will change the way we create, manufacture and distribute our products. It will revolutionise our current business model," said Franck Denglos, Vice President Speed. "Speed will be a key competitive advantage for us as we transform the adidas Group into the first true fast sports company."

Underlining the significance of key cities as a strategic choice, Mr Christopher Williams, Vice President Commercial Planning and Development said, the influence of global metropolitan areas on trends and brands cannot be overstated. If we want to be successful in the future, we need to win in key cities, where the fate of most global brands is decided.

Therefore, the Adidas Group has identified six cities – Los Angeles, New York, London, Paris, Shanghai and Tokyo – to focus its efforts on and that would serve as role models for the rest of the world. The choice, it said, was based on their global influence, their commercial relevance and relevance for sports and street culture.

Across these cities, the Adidas Group will “disproportionately” invest in marketing and retail experiences with the goal of maximising brand experiences, the status update report said.

"Our focus on key cities enables us to activate our categories in the right areas and engage with communities in the most relevant neighbourhoods. All of this ensures that our brands shine where they have the biggest impact to drive brand heat. That is both within and - through the halo effects created - also beyond city borders," Mr Williams said.

Open Source, the group's third strategic choice, is an endeavour to build a unique collaborative network and invites athletes, creatives, consumers and other partners to help shape the future of sport and sports culture.

To increase its own creative capital and gain new perspectives, the Adidas Group is providing these externals with access to internal tools, including the archive, materials, factories and data.

The collaboration with Kanye West, which, in 2015, translated into unrivalled reach of the Yeezy Season 1 fashion show and an unprecedented global sell-through rate of all Yeezy Boost sneakers since then, is a prime example of how the Group started to bring this aspect to life, the report cited.

Another example of a game-changing Open Source initiative will be the opening of the first 'Creator Farm' in New York City in the fall of 2016. The design studio and creation centre will invite urban creative talent to fuel creativity and innovation in sports, outside the regular seasonal product creation calendars.

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