Adidas — contender
When adidas entered the marketplace some 50 years ago, its focus was to produce shoes crafted specifically for soccer and running. Establishing the brand as the choice for professional athletes eventually parlayed into preference in the mainstream.
In the 80's, Run DMC furthered adidas’s street cred with the rap “My adidas,” paying homage to their favorite shell-toe. But by the early 90's, Nike and Reebok were out-marketing adidas – even in Germany, its own turf. Kids weren’t interested in the sneakers their parents wore, and adidas found itself forgotten in the back of the closet, heading for the Goodwill.
The new millennium has since brought about an adidas renaissance; the brand has steadily regained market share over the past five years to become the world's number two athletic shoe company (behind Nike). How did it go about repositioning to once again be among the coolest of kicks?
Adidas claims that, "the brand values of the company – authenticity, inspiration, honesty and commitment – are derived from sport." Historically, this sensibility was demonstrated through early and continued involvement with Olympic athletes, as well as active sponsorship of major global sporting events – like the World Cup. Today these events provide an ample playing field for sportswear companies to duke it out for representation and thus market share. Adidas’s rapid growth in Asia, where revenue rose by 15 percent to US$ 878M last year, may be further propelled in Japan and Korea when those two nations host the World Cup this year – an event which is expected to garner 2.5M spectators and one billion TV viewers worldwide.
However, the key to revitalized success seems to lie in the considerable endorsement deals adidas has developed with world class athletes. Recent sports figures representing adidas don’t only score high marks in their game – they also score high in their celebrity quotient. British football star David Beckham’s relationship with adidas has no doubt lent itself well to the brand’s visibility in the UK. Recently dubbed "Captain of England," Beckham led his team to victory in the 2000 FIFA World Cup. It doesn’t hurt that he’s married to a highly visible, ex-Spice girl and is often seen in the tabloids sporting the adidas logo. With Europe as adidas’s largest market, exposure like this reflects in the numbers; sales grew seven percent to US$ 2.7 billion, last year.
Stateside, Kobe Bryant is another example of a winning adidas endorsee. The LA Laker and youngest NBA all-star player is an athlete with substantial celebrity leverage. This translates directly into sales, young men who idolize Bryant want to play basketball like he does, and thus will want to wear what he wears. The equally compelling Russian born, American-bred tennis star Anna Kournikova also meets these criteria. She’s a young, brilliant professional athlete whose celebrity extends well beyond the world of tennis – like Bryant and Beckham she’s captured the public’s interest in mainstream newspapers, magazines and tabloids.
Reinvention was key, not only for the adidas’s marketing strategy, but also for its product line. On its website, adidas acknowledges that "The markets and industry in which we compete are transforming rapidly, paced by the evolution – or revolution – in how 'sports' are defined. Team sports such as soccer and basketball will always be a fundamental part of sporting competition. Today, however, eclectic, individual, 'no-rules' sports such as snowboarding, inline skating and surfing have grown into significant categories. Activities such as golf, hiking and mountain biking, which used to be seen as lifestyle and leisure activities, are now part of mainstream sports." Increased product offerings in these categories have undoubtedly contributed to a better score for the brand.
To keep up with the competition, adidas generates close to 60 new foot-friendly designs each year. The adidas credo is to regard shoes as feet, resulting in a product with superior fit and performance capabilities. Tactics have been revised in getting these products out for consumption. As a result, products have been repositioned in higher-end and sports specialty stores. As their main competitor has sprinkled flagship NikeTown stores throughout the US, Europe and Australia, adidas has also embarked on a foray into retail. The first adidas-Solomon megastore launched in Paris last year to capitalize on the brand awareness in that market; France scored victories in both the 1998 World Cup and 2000 European Cup football championships. Word on the street is the brand hopes to eventually roll out this concept to more cities in Europe and North America.
Adidas continues to prove itself as a brand built to last through a game plan of reinvention. With the recent acquisition of a lifetime partnership with Orlando Magic's Tracy McGrady (basketball) and its heavy involvement with 2002 World Cup, it continues to strike savvy deals that capitalize on the star power of young athletes and increase its visibility in the marketplace.
It appears that team adidas has honed its strategy to become a revitalized contender in today’s competitive sporting goods market and is now duly recognized as the sneaker of yesterday and today.