At an investor event Monday in Herzogenaurach, Germany Adidas Group provided more details on its 2020 targets, first introduced in March of 2015.
Adidas has focused on three tentpoles for 2020—speed, key cities and open source—through which the company hopes to achieve sustainable and profitable growth over the next five years by significantly increasing brand desirability.
In an effort to become a true “fast sports company,” Adidas plans to ramp up production of seasonal best-sellers so that customer favorites will never go out of stock. Similarly, Adidas says it will improve its ability to create or capture the latest industry trends. By 2020, the company forecasts to generate 50 percent of its net sales with these so-called “speed-enabled products,” improving the share of full-price sales across all speed ranges by a predicted 20 percent over the next five years.
“Our goal is to give consumers what they want when they want it. Speed is one of the most powerful levers for our Group to do so. It will change the way we create, manufacture and distribute our products. It will revolutionize our current business model,” said Adidas Group Speed Vice President Franck Denglos.
With 50 percent of the global population living in cities and 80 percent of global GDP generated in metropolitan areas, Adidas says the second prong of its 2020 strategy entails focusing on global fashion and cultural hubs as an area of growth. The company has identified six “key cities”—Los Angeles, New York, London, Paris, Shanghai, and Tokyo—which Adidas will “disproportionately invest in,” providing city-dwellers with unique marketing and retail experiences. Adidas expects to double its business in each of these urban centers over the next five years.
In an effort to further expand its creative capital, Adidas plans to be an “open source” for a unique collaborative network, and invites “athletes, creatives, consumers and other partners to help shape the future of sport and sports culture.” Adidas cited its collaborations with Kanye West as a prime example of its “open source” strategy. Furthermore, the company announced its first-ever ‘Creator Farm’ in New York City for this fall, which will serve as a design studio for “urban creative talent.”
Adidas says all three of these initiatives will come together in its new Speedfactory initiative. As previously announced, the first Speedfactory will open in Germany later this year and will begin large-scale production in mid-2017. A U.S.-based Speedfactory is also slated for 2017, and will “bring the total annual capacity up to 1 million pairs, with further acceleration of the roll-out possible for the years thereafter.”
Gerd Manz, Adidas vice president, technology innovation, said, “With Speedfactory, we are challenging conventions and disrupting the status quo of our industry. The consumers of today live in a constantly changing world. This shapes their behaviour and expectations. They demand newness and immediacy without compromise. Speedfactory will allow us to fulfil the consumer’s demand for speed, aesthetics and performance better than ever before and better than anyone else.”