Adidas reprioritising football marketing budget to move from tech to consumer insight-driven approach
Adidas is reprioritising its football marketing budget to switch from technology driven to customer insight-led strategies in order to grow annual sales at a mid-single digit rate over the next five years.
The shift serves as the cornerstone of the company’s revamped football gameplan that saw it scrap its old boots in favour of two new lines earlier this year. Spend will now be channelled not only at players but also through more activations on the shop floor and setting up grassroots in key cities.
Ultimately, the strategy aims to take Adidas’ football business closer to fans and its retail partners. Its “Haters” campaign in February is an example of how the change will come through to fans with around 30 per cent of the content pulled directly from them.
“Consumers engaged with the campaign because it was really driven from insights from the sport,” said Markus Baumann, general manager for Adidas Football. “With an in-depth understanding of the consumer we will drive our approach, taking insights from consumers and from the sport. And this is how we also fuel execution but also the creation of concepts.”
A fledgling network of influencers will grow to embody what the company calls “Open Source”, whereby it is able to react to consumers far quicker and allow them to co-create products. The objective extends beyond football to Adidas’ other categories and was initially piloted last year from the newsroom it erected for the World Cup. Furthermore, permanent, seasonal or event-driven grassroots programmes will form a key part of its marketing mix.
To coordinate the changes, Adidas has overhauled its organisational setup with football now under one team that works toward one set of KPIs. Rather than just focusing on creating pure visibility, its marketers now have to pay closer attention to generating talkabiity and shareability from branded content.
Despite achieving record football sales last year, Adidas felt drastic change was needed in order to offset declines across the rest of the business that saw it abandon plans to make €17bn in sales in 2015. Changes to its running business are also expected to double sales on a currency-neutral basis by 2020.
Taking the Adidas brand from the pitch to the street
It isn’t just in sport that Adidas is making sweeping changes to its marketing.
Its Originals streetwear label is pursuing a plan that concentrates on two consumer groups; creators and amplifiers it dubs “streetwear hounds” who it wants to woo sporty teens who then champion the brand online and in turn go some way to attract the more casual and female-focused “trend cadettes”. It shares similarities with the company’s football efforts whereby there is a sharper focus on extending the half-life of content through fans and influencers.
A mobile service is on the way and the business plans to continue supporting its MiZXFlux app that lets people customer trainers with photos. Both were teased earlier in the year when one of the brand’s top marketers told The Drum it had retooled its measurement strategy to quicken sales and retain its authenticity.
Originals will also push trainers such as Stan Smiths or Super Stars from concept to shelf in 45 days, a move that forms part of a wider model that involves quick turnaround of new styles to adapt to shifting consumer tastes and market conditions. The model was piloted last year and is currently being expanded before it is made key growth pillar for the business in 2016.
It is backed by Adidas exerting greater control on where and how Originals are sold at retailers such as Asos and JD Sports as well getting more products stocked by more fashion chains and sneaker boutiques like Size.
Arthur Hoeld, general manager for Adidas Originals, said: “When we talk about concepts and how Originals remains fresh, we’re not just going back to the archives and brining back 30, 40 or 50-year old products that we polish and make them shine. That isn’t a recipe for success. What we’re trying to do is be in between being innovative, always connected to sort and remaining authentic. These are the three fundamental pillars of how we approach concepts and how we approach product creation.”
The changes are expected to increase sales of Originals products by 50 per cent by 2020 and create what Hoeld said is “the most influential and connected sportswear brand in street culture in every market”.