Direct Sales from Adidas seeking to make up half of their revenue by 2025
Adidas, the renowned sportswear brand, is gearing up for a significant transformation in 2022. The company has announced its intention to target the burgeoning athleisure market and has set a goal to achieve 50% of its net sales through a direct-to-consumer (DTC) model by 2025.
This digital-first strategy aims to align Adidas teams with the consumer journey, enhancing product discovery, checkout experience, and post-purchase engagement. By personalizing offerings and marketing, Adidas hopes to deliver a more seamless and customised experience to its customers. This shift includes targeted email campaigns and apps like its running app, which delivers customised content.
Adidas is also renewing its focus on the women's market. In an effort to inspire and enable women in sports and culture, the brand plans to execute a cross-category women's plan. The company aims to grow the business in the mid-teens annually and expects to outperform competitors like Nike in 2025.
Sustainability is another key pillar of Adidas' strategy. The brand has committed to sustainable sports goods production, focusing on material innovation, switching to cleaner energy, and adopting low-carbon and circular alternatives. Adidas products increasingly use recycled polyester (with a goal of 99%), and the company is part of initiatives like Better Cotton and Pack4Good to reduce climate impact.
Adidas is investing heavily in its digital transformation, with plans to funnel over 1 billion euros into this area by 2025. The company also plans to double its marketing budget compared to 2021, aiming to triple its membership base from 150 million members to 500 million by 2025.
In terms of product offerings, Adidas Performance emphasises technical sport gear, while Adidas Sportswear and Adidas Originals are more focused on style. The brand is introducing a new consumer proposition, called Sportswear, to better address the athleisure market. Adidas Originals continues to focus on capturing the streetwear consumer, while the new Sportswear category targets the athleisure market.
Adidas' e-commerce sales are expected to double, reaching between 8 billion euros and 9 billion euros by 2025. The retailer also plans to grow net sales by between 8% and 10% each year, and net income by between 16% and 18% each year.
Adidas Factory Outlets will continue to grow and be upgraded, and the company plans to double its Halo stores by 2025 and revamp its concept store strategy, focusing on larger concept stores with fewer locations. The retailer's store strategy seems to be different from Nike's, which includes plans for up to 200 small-format stores focused on local communities.
Adidas aims to own 95% of its sales growth over the next five years in five product categories: Soccer, running, training, outdoor, and lifestyle. The retailer expects running, training, and outdoor to account for 40% of industry growth through 2025, while lifestyle is expected to make up 50% of industry growth during the same time period.
In summary, Adidas' integrated DTC and sustainability strategy positions the brand for stronger growth, improved margins, and enhanced brand loyalty in the evolving athletic wear market. The company's commitment to sustainability, digital transformation, and a focus on the women's market and the athleisure market sets it up for a promising future.
- Adidas' digital-first strategy aims to deliver a more personalized and seamless experience to its customers, including targeted email campaigns and apps like its running app.
- Adidas has committed to sustainable sports goods production, focusing on material innovation, cleaner energy, and low-carbon and circular alternatives.
- Adidas is investing over 1 billion euros into digital transformation by 2025 and plans to double its marketing budget compared to 2021.
- Adidas Performance emphasizes technical sport gear, while Adidas Sportswear and Adidas Originals focus on style, and a new consumer proposition called Sportswear has been introduced to better address the athleisure market.
- Adidas aims to own 95% of its sales growth over the next five years in five product categories, with running, training, and outdoor expected to account for 40% of industry growth.
- Adidas' e-commerce sales are expected to double, reaching between 8 billion euros and 9 billion euros by 2025, and the retailer plans to grow net sales by 8% to 10% each year.
- Adidas is renewing its focus on the women's market, planning to execute a cross-category women's plan, and aims to grow the business in the mid-teens annually.
- In terms of industry growth, lifestyle is expected to make up 50% of industry growth during the same time period, and Adidas' integrated DTC and sustainability strategy positions the brand for stronger growth, improved margins, and enhanced brand loyalty in the evolving athletic wear market.
