Instore Deep Dive: Adidas’s Customer-Centric “Playground,” SpeedFactories and how it’s Driving Sales in retail.
With the recent rise in demand for athleisure wear, companies traditionally relegated to the sportswear arena are seeing a pulse in sales. The sneaker fad of the last few years has meant an increase in sales for a variety of athletic-focused brands, including Nike, Puma, and Adidas. Adidas had a particular surge as the trendy shoe brand of 2016/2017--their revenues increased by 18% in 2016, setting a record for the company. But as time wears on and trends shift, Adidas has had to work to make the most of their popularity and stay relevant. The company boasts innovative marketing tactics, a strong omnichannel strategy, and a stunning in-store experience that are keeping Adidas in fashion in 2019.
The central focus on Adidas’s store strategy is quality over quantity. At the same time as closing a number of stores over the course of 2018, the company has also invested a great deal in updating stores in major cities and building new stores in a few key markets. They also recognize the importance of their online experience - calling it their “most important store,” where they can focus on providing an efficient, user-friendly customer experience.
What keeps their physical stores relevant and engaging is a fusion of the ease of online shopping and the thrill of a unique in-store experience. Adidas stores are oriented toward building brand loyalty just as much as they are about selling products--connecting the Adidas brand with fun, hip, athletic-oriented experiences.
The company’s 5th Avenue flagship in New York City is a great example of Adidas’s renewed focus on in-store experience. The 4-story flagship boasts a collection curated by consumer data; athletic wear, sneakers, and more fashion-oriented street clothing for men, women, and children,. What sets the store apart, though, is its abundance of in-store games, activities, and product-based tech to improve the consumer experience. There are bleachers facing their all-glass front wall, letting shoppers look out onto the thick of 5th Ave. There’s a screen showing sporting events so shoppers don’t miss the game. There’s a pinball machine, glowing neon lights, and even a juice bar - a trend usually saved for gym locations. Perhaps most impressively, there’s an in-store track, along which shoppers can test sneakers and even meet with a trainer who will use an in-shoe device to determine which sneakers best work with their stride. The in-store experience is unparalleled, creating a sense that Adidas isn’t just a shoe or a t-shirt--it’s a lifestyle.
Of course, none of the thrill of shopping would matter without excellent customer service and a thorough catalogue of products. Adidas has developed a reputation for responsive customer service, hiring professional trainers to advise on product use, as well as generally setting high standards for customer engagement.
Meanwhile, they’ve also developed an initiative to provide more products, faster; their ‘Speed’ initiative focuses on keeping up with demand, never running out of stock. Adidas opened two Speedfactories in 2018--factories that use machine technology including 3D printing to make their products faster and to minimize human labor. The factories let Adidas make products more quickly, which means a broader reach.
It also means increased flexibility--the Speedfactories are the site of production for Adidas’s AM4 line, which feature sneakers designed for the challenges of training in specific cities around the world. The AM4NYC running shoes, then, are designed with the sharp corners of New York City’s grid in mind, while the Los Angeles shoes are made with extra cushioning to protect against hard sidewalks. This location-based design is possible because of the flexibility provided by Adidas’s Speedfactories.
This emphasis on location specificity, then, translates into a personalized in-store experience. Adidas is using data collected from their app, website, and loyalty program to determine regional demand, and then align their stores with the shopping habits of their consumer base. This means that it’s easier to find what you want, where you want it--no wading through Tokyo AM4 sneakers in Atlanta--which in turn translates into less waste--of man-power, and of shipping. It’s a win-win for consumers and the brand.
The Adidas in-store experience is a lesson in innovative brand-building and efficiency. The stores are a fusion of technical know-how and stylish world-building, just as their shoes are both athletic and chic. As its global director of digital and retail marketing Swave Szymczyk said, “We’re looking to win with experience, telling a genuine Adidas story from start to finish – that’s our playground and that’s where we need to win.” And they’re building a playground for the rest of us along the way.