Core Tip: Kasper Rorsted, chief executive of adidas (ETR:ADS), a German sports brand group, is not satisfied with the current status quo. He has greater ambitions for the group's performance.
Kasper Rorsted, CEO of adidas (ETR:ADS), a German sports brand group, is not satisfied with the current status quo. He has greater ambitions for the group's performance.
Kasper Rorsted said in a conference call on the latest financial report that the adidas Group aims to increase the sales of footwear to 40 million pairs this year, increase it to over 50 million pairs by 2020, realize a revenue of 25 billion euros, and expect to continue to increase its products in the millennial generation. Consumer exposure.
Stan Smith, driven by fashion trends, is the best-selling shoe in Adidas history.
To compete with Nike, the US market is crucial. The latest data shows that adidas and Nike’s sales outside the United States are on a par with each other. According to statistics from Deutsche Bank of Deutsche Bank, as of March, adidas’ share in the American sports shoe market was 11%, and Nike was 55%. This is a tough battle for adidas. Kasper Rorsted also stated that adidas’ brand loyalty in the US market still needs to be improved. In the future, it will increase investment in the US market, increase the speed of supply chain operations, and expect to sell more full-priced products.
For now, 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 transferred to discount stores because of slow sales. In order to better compete with Nike for market share, relying solely on Stan Smith's performance to promote it seems to be a bit difficult for adidas. Finding the next pair of "Stan Smith" is becoming an urgent task for the group.
Arthur Hoeld, director of Adidas brand strategy and business development, also stated that the group’s confidence in Stan Smith is not as good as before, hoping to develop new best-selling products. Then, can adidas replicate the myth of Stan Smith and cultivate new products to stimulate and Keep consumers fresh about adidas?
A comparison chart between the performance growth of adidas and Nike in the past five years
Adidas performance increase in all regions of the world in the first quarter
In the sports shoes market, the basic trend of the new wave every ten years, it is undeniable that adidas seized this opportunity.
The Stan Smith white shoes that were born in the 70s of the last century are adidas's most successful re-engraved single product in the past decade, and it is also a must-have item for young consumers. Stan Smith is still the first pair of signature sneakers ever adidas. Originally designed for the tennis player Robert Haillet of France, Stan Smith later signed the tennis grand slam player Stan Smith at adidas and named the pair of tennis shoes as Stan Smith.
According to statistics, under the careful planning of adidas, the total sales of Stan Smith shoes are much higher than the total sales of other shoes of the group. Recalling that in 2012, adidas first used a hunger marketing strategy to withdraw all Stan Smith from the market and reduce the supply of consumers' attention. By mid-2013, Stan Smith could hardly buy it on the market. The protests strongly urged adidas to resell Stan Smith.
In fact, this German traditional sportswear retailer is constantly trying to make itself cool.
After stimulating the strong demand of consumers, adidas used the star effect to spread on social media and cooperated with celebrities such as A$AP Rocky and Alexander Wang to promote Stan Smith shoes and took a two-minute shot for the shoe. Online video, Stan Smith pushed back to the top.
In early 2014, adidas began distributing Stan Smith extensively in department stores, adding rich color matching and uppers such as cracks and meshes for consumers to choose. In addition, adidas invited singer Pharrell Williams to collaborate on hand-painted 10 pairs of limited edition Stan Smith for sale in the famous Parisian shop Colette. Eric Liedtke, global brand director at adidas, said that he hopes consumers can buy 3 to 5 pairs of Stan Smith instead of buying only one pair.
According to statistics, the Stan Smith series sold 8 million pairs in 2015. Since its introduction in 1971, the cumulative sales of the shoes have exceeded 50 million pairs. Superstar, who was born almost at the same time with Stan Smith, under the planning of adidas Group, launched 50 color matching products with Pharrell Williams in 2015. In that year, it sold 15 million pairs of products and contributed over $1 billion in sales for adidas. For the first time in ten years, it beat rival Nike to become the best-selling sports shoe in the United States last year.
Although adidas has yet to release specific data, NPD Research Institute expects sales of adidas in the United States to increase five-fold year-on-year last year. Sales of adidas Originals, including Stan Smith and Super Star, will increase by 80%, including basketball and football. More than three times the sales of professional shoes.
Adidas and Nike's performance last year compared to 2020
In the three months ended March 31, adidas Group's sales increased by 18.9% year-on-year to 5.67 billion Euros, operating profit increased by 29% to 632 million Euros, gross margin was 49.2%, and net profit soared by nearly 30% year-on-year. % to 455 million euros. The adidas brand performance increased by 18% year-on-year, with both adidas Originals and adidas Neo registering double-digit increases, while Reebok's sales increased by 13% year-on-year. From a channel perspective, adidas Group’s e-commerce performance during the quarter was particularly strong, with an increase in sales of 53%.
It is not uncommon for sports brands to bet on fashion and leisure products. The concept of fashion sports is everywhere. The adidas created the Originals series more than a decade ago. Puma regains the favor of consumers through the Fenty by Puma fashion series. It has become the main driving force for the growth of Puma and other sports brands.
According to data from Citibank, adidas’ sales growth is currently dependent on trendy products such as leisure series and celebrity cooperation limited editions. It is not the brand's core sports shoes. Some industry players question that future entertainment stars will sell more shoes than athletes. Herbert Hainer, former CEO of adidas, said in an interview: “It's not common now, but it will definitely be.â€
It is worth noting 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 did bring great benefits to adidas, but sales of Stan Smith and Super Star products began to decline. It is also a fact that the development of new best-selling products has become a top priority for adidas.
Recalling adidas' other classic products, NPD analyst Matt Powell believes that the adidas 1950 Samba indoor soccer shoes, Gazelle 1960, and Campus 1992 all have the potential to become the next Stan Smith.
Matt Powell emphasized that just as Stan Smith himself never thought that his name would be associated with young people aged 14 to 24, it may be that another new adidas cash cow is being opened.
However, it cannot be ignored that how to capture the Chinese consumers who love to follow suit is the key. In the first quarter of this year, adidas Greater China continued to perform strongly, with sales revenue rising 30% from the same period last year to 990 million euros. It will soon become another brand in the market to enter the 1 billion euro club.
Obviously, this German sportswear retailer is constantly trying to make himself cool, and it is becoming Nike’s most formidable competitor.
This article is reproduced Source: Fashion headlines
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