With a bigger emphasis on personalisation, Adidas laces up for a long run

A few years back, when Adidas cut back on its stores in India, many saw it as a brand in retreat. Far from it, says the company; it was more like retail rationalisation and that has helped Indian operations bounce back with a near 20-fold increase in its profit after tax figures for 2016-17. 

Larger retail formats, an aggressive digital strategy, emphasis on local market challenges and needs for its ‘Performance’ range and on personalisation and cultural nuance for its ‘Originals’ label are key contributors to the sharp increase in the brand’s fortunes. According to the company these helped win back the trust of consumers after its controversial run-in with the authorities over allegations of financial impropriety among some of its franchise partners for sister-brand Reebok over five years ago. Besides, as industry experts point out, these efforts have been bolstered by a booming fitness culture in the country.

The fitness business in the country has soared; according to a report by business research firm Praxis Global Alliance and Your Nest, the potential of the sports, fitness and wellness market is expected to grow from $35 billion in 2016 to $90 billion by 2022 in India. Another report by Euromonitor International says that many more Indian consumers are taking to fitness activities for a healthy lifestyle. For Adidas it was all about making the right moves at the right time. 

Sean van Wyk, senior marketing director, Adidas Group India said: “The store format has changed and so has our philosophy behind retail. We are doing bigger stores so that the customer can get a great assortment of products and is not cramped up in a shop.” 

Convenience and customisation

Adidas retail stores have treadmills, other equipment and gear and encourage testing and personalisation of shoes and other products. The objective is to not just listen to the customer but also be seen to be adapting to her needs.

As a global brand, van Wyk explains, there is a consistency to its branding and retail efforts. But efforts are on to infuse the global messaging and identity with local relevance. “We know that consumers want to influence the brand and the way it is used. Communication back and forth and getting consumer inputs is very important,” he added. 

 According to reports, in 2012, Reebok, a brand operated by Adidas, ran into trouble with its franchise partners over allegations of financial impropriety. Adidas had to discontinue around 500 partners for the two brands in the country at the time. 

Adidas now has 400 fully-owned stores in India. The company has adopted a larger format for all outlets, which it says has allowed customers to get to know the brand better. “It will always be a process of underperforming stores closing down,” said van Wyk. 

 Adidas positions itself as a creative sports brand and its stores are pitched as outlets that encourage personalisation. Customers as creators of the brands they wear is a notion being explored by several product categories; auto makers have experimented with personalised bikes and finance companies and cola brands have all played up their customisation credentials.

Different strokes for different brands

Adidas offers two labels from its portfolio in the country, one is Adidas Performance and the other is Adidas Originals. The first is positioned as a sportsperson’s brand. It is positioned around athleticism and excellence on the field. 

Originals is an off-the-field label. The company calls it a street-culture brand, where Adidas can connect with the lay consumer. The Performance range takes the bulk of the focus currently, out of 400 stores in the country just 20 are Originals stores. 

The distribution of stores and the differentiated focus reflects the changing customer landscape in the country. There is a bigger focus on being healthy and this is very good for Adidas as a sports brand van Wyk said. He points to the increasing number of marathons and participants every year as evidence of the growing customer base. Adidas has also aligned itself more closely with the game of football in the country. “We see a lot more kids coming in and a lot of corporate teams being formed in football,” said van Wyk. 

Digital storytelling

E-commerce and digital marketing are integral to the positioning process underway. “For every brand, understanding the customer is critical. We describe ourselves as consumer centric. It is imperative for us.”

In this context, digital offers a gateway into the brand’s target generation and has helped the company tell stories with a local flavour. “It has acted to bring the brand and the millennial customer closer,” said van Wyk. Van Wyk says that a brand gets the maximum out of the medium if it is present in a relevant way. “We don't market logo or our products. We sell our stories. If the consumer  wants to trust in us, they will trust in us,” he said. 

Digital helps connect with customers in a more relevant fashion. Van Wyk explained, “What the consumer likes to talk about, what he or she is searching for, are important for us. The experience for our customer, online, on ground, at our retail or through other voices that the brand has, is what the focus is on.”