Heavyweight investments to ensure it was the most talked about sports brand this summer have sparked what Adidas’ outgoing chief executive Herbert Hainer called “stellar” sales that will help push past its €2.5bn sales target for 2016.
The business has gone to great lengths to talk up the quality of its social media marketing in recent months and Hainer used its latest analysts' call to spotlight its commercial impact. And while it has been coy about how these interactions generate a direct sale, he pointed to a 17 per cent jump in sales of its football products as proof of the “quality of our interactions with people on social media".
“Our First Never Follows campaign redefines the rules of real-time marketing,” he continued, before touching on a strategy he claimed ensured its dominance of the daily volume of shares among UEFA sponsors for 27 of the 30 days of the tournament. This resulted in a total of 1.17m shares, more than twice the number of the next biggest brand. “One highlight [of the Euros] was the share of voice in terms of hashtag usage, which was seven times higher than nearest brand," Hainer added.
While it is to be expected that Adidas should dominate a football event it sponsors, its eagerness to talk up the marketing is in part down to the radical change the business has made to how it promotes the brand. Post World Cup 2014 the sportswear business topped €2bn in annual football sales for the first time, while Nike made inroads into Western Europe – the Adidas stronghold – and Under Armour had become more of a force. Worried about the competition, Adidas scrapped its iconic predator football boot brand, focused on street football and honed its investments around six cities - – London, Paris, LA, New York, Shanghai and Tokyo. In each of those cities the brand has a real-time marketing suite, which is localising much of the brand’s digital marketing, spanning photography to video.
Having taken such a gamble with its football business it's no wonder Adidas was quick to talk up its role in an 18-month turnaround for the business. That upturn peaked in the most recent quarter when Adidas posted the fastest growth out of Nike and Under Armour. Sales rose 22.6 per cent to €788m in the three months to June, beating the 21.5 per cent and flat uplifts posted by Under Armour and Nike respectively in their most recent quarters. North America has been key to Adidas’ revival, with the business 26 per cent quaretly rise, showing momentum has returned to sales there after it lost its number two position to Under Armour in 2014.
Hainer, who was presenting his last financial results as chief executive before handing over to former Hankel boss Kasper Rorsted, said he was most proud of how the business had recovered since 2014 when it was forced to scrap a sales target of €17bn. “A lot of people in the media and investment community had me against the wall, saying we ran out of ideas and together with management team we’ve gone through an incredible turnaround which nobody would have believed.”
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