THE CONSUMER AT THE HEART OF EVERYTHING WE DO
Global Brands oversees the innovation, design, development and marketing of the company’s sports and lifestyle offerings. By constantly developing desirable products and providing inspiring experiences, the function strives to build a strong image as well as trust and loyalty with consumers to capitalize on growth opportunities in the sporting goods industry.
The adidas brand has a long history and deep-rooted connection with sport. Its broad and diverse portfolio in both the and Performance categories ranges from major global sports to regional heartbeat sports and local sneaker culture. This has enabled the brand to transcend cultures and become one of the most recognized and iconic, on and off the field of play. adidas is positioned as a premium sportswear brand that caters to all, from elite professional athletes and teams to any individual who wants to make sport part of their lives, spanning footwear, apparel, and Inspired. Driven by a relentless pursuit of innovation as well as decades spent accumulating sports science expertise, the brand helps athletes of all levels to make a difference – in their game, in their life, in their world. This is anchored in our company’s purpose that, through sport, we have the power to change lives. In 2020, the adidas brand accounted for 91% of the company’s sales. and gear
Reebok is an American-inspired global brand with a deep fitness heritage and continues to merge its iconic past with new technologies that revolutionize both sports and lifestyle products. Reebok is positioned at the intersection of fitness and fashion as boundaries continue to blur. Reebok’s Sport category combines product divisions focused on specialized fitness activities such as running and training, with functional innovation and a focus on style. These products are at the forefront of fitness and true to the culture and communities that Reebok consumers train, run, and live in. Reebok’s second category, Classics, reinforces the brand’s deep roots in fitness and pop culture across multiple iconic silhouettes and trend-oriented lifestyle products. In 2020, the Reebok brand accounted for 7% of the company’s sales. As part of the development of its new five-year strategy, the company has decided to begin a formal process aimed at divesting Reebok.
Iconic product franchises
We are convinced that footwear has the highest influence on brand perception among product categories and our potential to grow market share. Access to athlete data and an archive that is unrivaled in the industry provide deep insights and ample opportunity to add chapters to our brands’ rich heritage. At the same time, we have a clear strategy to reduce the number of footwear models, putting a stronger focus on key franchises. These footwear franchises aim at shaping sport as well as influencing culture and are built to create trends, rather than follow them. Through uncompromised functionality, iconic design, and unique stories, they directly root from and are targeted at the athlete with the potential to be iterated and expanded over time. Their life cycles are tightly managed to ensure longevity and relevance. Key footwear franchises for the adidas brand include, among others, Ultraboost, Predator, and Superstar. On the apparel side, the brand continued to build out franchises such as the MyShelter Jacket, the Tiro Pant, and the Z.N.E. Hoodie. In 2020, key footwear franchises of the adidas brand represented at least 34% of its footwear business.
Brand desirability fueled by innovation and creative collaborations
In addition to leveraging iconic product franchises, creating innovative concepts to meet the needs of athletes and consumers is a prerequisite to strengthening our market position in the sporting goods industry and a premise to being the best sports brand in the world. We remain highly committed to maintaining a full and innovative concept pipeline, bringing new ground-breaking technologies and processes to life, investing into sustainability, and exploring all possibilities of digitalization. The modern innovation landscape extends beyond product and increasingly requires innovation teams to consider the development of experiences and services, as well as the provision of greater levels of transparency and direct integration of our consumer through co-creation. In partnership with our Trend & Cultural Insights teams, foresight and trend analysis are shared on an ongoing basis, documenting shifts in society and culture. True to the vision of creative collaboration, our innovation approach is widely based on this open source mindset, which provides the starting point to build concepts of relevance.
We seek to create value together with high-profile individuals and brands such as Beyoncé, Kanye West, Pharrell Williams, Yohji Yamamoto, Stella McCartney, and Prada. But we also collaborate with athletes and consumers, universities, and innovative companies as well as national and international governments and research organizations. In addition, we have been inspired by the input from knowledgeable partners such as BASF (e.g. Boost), Carbon (e.g. 4D), and (e.g. Primeblue) for many years. In 2020, we set out on a joint mission with San Francisco-based footwear start-up Allbirds to create a high-performance sports shoe with the lowest carbon emissions by exploring innovations that span everything from manufacturing and supply chain to transportation methods. for the Oceans
We believe developing industry-leading technologies, materials and consumer experiences is only one aspect of being an innovative leader. Equally important is the successful commercialization of those innovative concepts.
Analogous to prior years, the majority of sales were generated with products newly introduced in the course of 2020. At the adidas brand, products launched during the year accounted for 68% of brand sales (2019: 77%), while only 2% of sales were generated with products introduced three or more years ago (2019: 3%). At the Reebok brand, 67% of footwear sales were generated by products launched in 2020 (2019: 67%), while 11% of footwear product sales relate to products introduced three or more years ago (2019: 11%).
We have a long heritage of innovation and strive to provide athletes with the best by creating high-performance and competitive products. In 2020, we continued to serve consumers with innovative technologies and sustainable concepts built into our products:
- adidas 4D: The adidas 4D concept features midsoles crafted with light and oxygen using Digital Light Synthesis, a unique technology developed by Carbon, to produce high-performance footwear. The midsole pioneers a digital footwear component creation process that eliminates the necessity of traditional prototyping or molding. With the new technology, adidas brings additive manufacturing in the sports industry into a new dimension. In the past three years, adidas 4D has gone from a conceptual innovation to a running shoe made available in large quantities and multiple variations and will be continued to be scaled further.
- EnergyRODS: Our latest running technology is designed to mimic the foot’s metatarsals, which deliver an anatomically driven transition from heel to toe, limiting energy loss and providing a propulsive feeling. In comparison to carbon plates, EnergyRODS enable the foot to move more naturally and are featured in our pinnacle running product offer, such as the Adizero Adios Pro. Our latest adidas high-performance running franchise is created for elite athletes and combines EnergyRODS, a responsive foam, and a lightweight mesh upper. We celebrated the first success of the franchise when Peres Jepchirchir set a new half marathon world record in a women-only race in September 2020.
- Futurecraft.Strung: Strung is an industry-first textile and creation process that allows adidas to input athlete data into the precision placement of each thread on the upper of shoes. Futurecraft.Strung is the first product concept designed to illustrate Strung’s capability and was created to provide a new feeling and experience of fast short-distance running specifically.
- Made to be Remade: When it comes to dealing with plastic waste, just moving it to another place is the problem, not the solution. Therefore, we started the Futurecraft.Loop journey in 2019, as we drive forward our ambition to end plastic waste. In 2020, we introduced Loop Generation 3 as we took our latest Futurecraft.Loop shoe to consumers during adidas Week in October, where we made the shoes available to the public for the first time and invited 1,500 Creators Club members to take part in a beta test of a specially designed digital experience through the adidas app. This was a cornerstone of the full commercial release of the sustainable franchise in 2021. Club
In the same way, we continued the development of innovative materials to create relevant products for our consumers:
- Lightstrike: Lightstrike is a super-light EVA foam cushioning technology that provides extreme comfort and the perfect balance between light weight and responsiveness. It is featured across multiple running franchises and caters to the needs of runners at any level, from beginners to world-class marathoners.
- Parley Ocean Plastic: Products made of focus both on the needs of our athletes, by living up to their performance promise, and on the needs of the world, by helping to protect our oceans from plastic pollution. We have taken sustainability to the product level and continue to roll it out across our product portfolio. In 2020, we made more than Ocean Plastic15 million pairs of shoes containing Parley Ocean Plastic, which means that by the end of 2020 adidas made in total more than 30 million pairs of shoes with Parley Ocean Plastic.
- Primeblue/Primegreen: Primeblue is a recycled technical material made in part with Parley Ocean Plastic – upcycled plastic waste, intercepted on remote islands, beaches, coastal communities and shorelines, preventing it from polluting our oceans. It is now included in some of adidas’ most iconic and visible , like Ultraboost, and in the jerseys of some of the biggest leagues and teams in the world. Primegreen, made from recycled ingredients, is a series of high-performance materials targeted to end the use of virgin plastics. Both materials played a significant role in adidas reaching more than 70% total volume of recycled polyester at the end of 2020. franchises
- RDY: RDY is an apparel performance concept that combines a series of technologies to serve for all weather conditions: insulating, moisture-managing COLD.RDY, breathable, air-cooling HEAT.RDY; wind-resistant, water-repellent WIND.RDY; waterproof, windproof RAIN.RDY; and moisture-absorbing AEROREADY. The concept enables simplified storytelling to the consumer and has been rolled out across multiple categories and products.
Beyond innovative technologies, sustainable concepts and materials, key products and collaborations of the 2020 business year include:
- aSMC Urban Extreme: adidas x Stella McCartney represents the combination of eco-consciousness and sustainable fashion with performance sportswear. Urban Extreme ranges across all product categories and is elevated by tactical outerwear pieces combined with RDY innovations.
- Clean Classics: Clean Classics is a series of vegan versions of a few of the best-selling adidas sneakers, such as the Stan Smith, Superstar, Supercourt and Continental 80. The series re-emphasizes adidas’ commitment to sustainability by including a sustainable compound as well as a new pattern-cutting process to use less material and create less waste.
- Reebok Forever Floatride Grow: Forever Floatride Grow is the Reebok brand’s first plant-based performance running shoe and latest example of sustainable innovation. The shoe is made with castor beans, algae, eucalyptus trees and natural rubber and thus builds on Reebok’s Cotton + Corn lifestyle collection of footwear.
- Tech Rock: The Tech Rock jacket is deeply rooted in athletes’ insights and features the advanced three-layer waterproof, breathable and durable fabric GORE-TEX Pro. The jacket offers best-in-class protection to consumers adventuring in vertical terrain and potential challenging conditions but looking for modern expression of technical wear.
- X – Ghosted: The first football boot available at scale with the integration of a dynamic carbon plate and a vacuum-fit experience that supports players’ explosive moves thanks to its proximity to the contours of the foot.
Effective marketing investments
An additional important building block of creating brand desirability and winning the consumer are our marketing investments. adidas is focused on creating inspirational and innovative concepts that drive consumer advocacy and build brand equity. The company historically spends almost half of its marketing investment on partners, with the remainder spent on brand marketing activities such as digital, advertising, point-of-sale and grassroots activations. In addition, the company will further consolidate and focus resources to create powerful brand statements overarching several categories under one narrative. This will be achieved by focusing on two priorities:
- Brand drivers: Brand campaigns are at the pinnacle of our communication strategy. They demonstrate the brand belief, conveying to consumers what adidas stands for and drive a consistent positioning globally. Furthermore, brand campaigns support brand priorities by establishing an emotional connection through the brand narrative. adidas also authenticates the brand in using sport moments as platforms to drive sports credibility by enabling athlete and event activations. Lastly, we leverage our partnerships, for example with Beyoncé, Kanye West and Pharrell Williams to drive brand heat and freshness in lifestyle through partner activation and special product executions.
- Commercial drivers: Product campaigns are created to focus on a specific product franchise (e.g. Ultraboost) or a technology platform (e.g. RDY or 4D). These campaigns are driven by a clear performance or style benefit and are expressed through storytelling around products’ unique selling propositions. Additional commercial content is driving conversion at the point of sale (in-store and online) by highlighting a product feature or benefit for key items, volume drivers and key franchises.
In 2020, adidas achieved activations of sports marketing partners and entertainment influencers under single narratives and across categories globally:
- Creators Club Week: In October 2020, adidas launched its first seven-day digital festival, the ‘Creators Club’ Week. During the week, members saw our biggest-ever drop of exclusive and limited-edition shoes with more than 70 new designs making their debut over the course of the event. The week also featured appearances from global celebrities talking about important topics such as ending plastic waste, celebrating culture and innovation. To kick off the week, model Karlie Kloss launched the next chapter of Futurecraft.Loop and members had the chance to earn one of the 1,500 pairs available. Throughout the week, a series of over 40 surprise raffles took place where members won unique creations, such as a piece of art from designer Paolina Russo or signed adidas Predator boots from FIFA World Cup winner Paul Pogba.
- #hometeam campaign: Following the emergence of covid-19, adidas pivoted in real-time to create and launch a brand campaign that offered help, hope and connection to the world during the pandemic. #hometeam was a global movement spearheaded and created by our partners and the content they created. Over 3,000 athletes, artists and influencers supported the moment making it the biggest-ever adidas campaign in terms of partner activation and involvement. #hometeam content was viewed close to 400 million times and is one of the most watched and positively received campaigns in the brand’s history.
- Ready for Sport: Following the success of #hometeam during the global pandemic in spring 2020, the ‘Ready for Sport’ campaign was a motivating call and a celebration of sport. The series harnessed adidas’ purpose that ‘through sport we have the power to change lives’ in a co-creative approach seeking to reveal first-person stories of 20 of adidas’ leading athletes who shared how sport became their fuel during the covid-19 crisis to stay ready for the comeback of their craft, bringing joy and optimism to all. The campaign was launched on adidas’ owned and partner social media channels and was endorsed by over 1,000 adidas athletes. Overall, the ‘Ready for Sport’ campaign generated more than 500 million video views, becoming adidas’ most-watched social campaign to date.
In terms of partners and athletes, while reducing the ratio of marketing spend and the number of partnerships, we will nonetheless continue to bring our products to the biggest stages in the world through:
- Events with global reach: FIFA Women’s World Cup, Rugby World Cup, the UEFA Champions League, and the Boston and Berlin Marathons, among others.
- High-profile teams: National association football teams of Argentina, Belgium, Colombia, Germany, Japan, Mexico, and Spain, as well as top football clubs such as Arsenal London, Bayern Munich, Flamengo Rio de Janeiro, Juventus Turin, Manchester United and Real Madrid, the New Zealand All Blacks in rugby, and American universities such as University of Miami, Arizona State University and Texas A&M University.
- High-profile individuals: Football stars Lionel Messi, Jürgen Klopp, Mohamed Salah, Paul Pogba, Toni Kroos, Heung-min Son, Vivianne Miedema and Wendie Renard. Basketball stars Candace Parker, Damian Lillard, Donovan Mitchell, James Harden, and Liz Cambage; American football players Aaron Rodgers, JuJu Smith-Schuster, and Patrick Mahomes; baseball athletes Aaron Judge and Carlos Correa, as well as tennis stars Alexander Zverev, Angelique Kerber, Dominic Thiem, Garbiñe Muguruza, Stefanos Tsitsipas, and alpine skier Mikaela Shiffrin.
’Sport Performance’ stands for the categories training, running, football, basketball and heartbeat sports such as outdoor, swim, tennis and US sports.
‘Sport Instands for fashion inspired by sport – also known as ‘sports lifestyle’. It draws inspiration from adidas’ rich archives and legacy. Sport Inspired stands for Originals, Y-3, Statement and Yeezy.
Accessories and gear
A product category which comprises equipment that is used rather than worn by the consumer, such as bags, balls, or fitness equipment
Parley for the Oceans
Parley for the Oceans is an environmental organization and global collaboration network. Founded in 2012, Parley aims to raise awareness for the beauty and fragility of the oceans, and to inspire and empower diverse groups such as pacesetting companies, brands, organizations, governments, artists, designers, scientists, innovators and environmentalists in the exploration of new ways of creating, thinking and living on our finite, blue planet.
Creators Club is a membership program that helps us deepen the relationship with our consumers. Linking all adidas apps, events, communities and channels into one single profile, the program rewards members with points for interacting with the brand, e.g. when making a purchase or using the ‘adidas Running’ or ‘adidas Training’ apps. Depending on the number of points, exclusive benefits are unlocked, including access to hype sneaker and apparel drops or invitations to special events.
Parley Ocean Plastic
Parley Ocean Plastic is a material created from upcycled plastic waste that was intercepted from beaches and coastal communities before reaching the ocean. Parley for the Oceans works with its partners to collect, sort and transport the recovered raw material (mainly PET bottles) to our supplier who produces the yarn, which is legally trademarked. It is used as a replacement for virgin plastic in the making of adidas x Parley products.
In the sporting goods industry, performance products relate to technical footwear and apparel used primarily in sports.