Adidas ramps up retail drive to own brand experience

Adidas is quickening the pace of its retail rollout worldwide to control more of the brand experience after seeing sales wane in the absence of a major sporting event this year and its sponsorship strategy stutter.

Adidas is turning to retail to bring its brand credentials to the fore after seeing its sponsorship strategy stutter.

The sportswear maker will expand its brand retail estate in markets such as the UK and Russia in the coming months to offset declines made at third party chains such as Sports Direct and Decathlon where a large proportion of its products are sold at discount.

It is looking to build on the momentum from its third party quarter when it added 69 stores to its retail portfolio, bringing its opening for the year to 165.

Adidas sees the retail channel as a way to kick-start sales for its non-football products after multi-million campaigns for its running and fitness ranges earlier this year struggled to challenge the dominance of Nike. Whereas Adidas has relied on the global appeal of FC Barcelona star Lionel Messi to preserve its share of the football market, Nike has created sub-brands around top stars Cristiano Ronaldo and Roger Federer to promote its products via different sports.

The strategy was brought into sharp focus in the latest quarterly results for both brands. The German business saw revenue plummet 7 per cent year-on-year for the three months to 30 September, while Nike posted an 8 per cent increase over a similar period.

Industry experts say Adidas’ pursuit of sales by “any means necessary” in the past had a short-term view and “diluted” the brand. One of the ways the company has sought to address this, however, has been to prohibit retailers from listing its products on sites such as eBay in the hopes of gaining greater control over how its products are marketed and sold online.

Charlie Dundas, managing director of Repucom UK and Ireland, says a more structured Adidas retail offering could be used to activate sponsorships in a more meaningful way and bring clarity to its sporting credentials.

He adds: “With the World Cup on the horizon, it’s no longer a matter of brands making sure they have the right players wearing their boots at the tournament, but how they activate and leverage the relationship with consumers that will determine success in the retail space.”

Adidas sees its burgeoning retail estate as a key driver in its bid to generate €17bn (£14.2bn) by 2015. Last month, it brought together its Central, North, South, France and Iberia divisions to form a centralized Western European outfit capable of forging more direct routers to market and the end consumer.

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