The German sportswear juggernaut, Adidas, has made plans to close down its brick-and-mortar stores as they are shifting their focus on boosting its online presence. Currently, they have 2,500 stores worldwide. As 2017 rolled by, they recorded a remarkable growth rate where online sales jumped to 57%. This made it easier for Adidas to make the leap to concentrate its efforts on e-commerce. The goal is to double its online revenue by 2020.
Adidas-Group’s CEO, Kasper Rørsted, explained in an interview with the Financial Times that their website is the most important store that they have in the world. Rørsted further explains, “over time, we will have fewer stores but they will be better”. Ah, the famous less-is-more strategy. The group is looking to invest €900 mln in 2018, where the majority of the budget will go to digital operations such as logistics and infrastructure, including warehouse fulfillment.
In order to sell more online, they are planning to hire 200 new employees who will focus on digital operations. Of course, Europe’s largest sportswear manufacturer is no stranger to the digital market. They have launched the mobile app in the U.S., U.K. and in Germany where customers can customize their sneakers. The plan is to further roll out the
Adidas-app to other countries as well.
According to the executive, it is essential to invest in infrastructure and logistics because it is just a totally different ball game when you want to go Direct to Consumer (DtC). They are not just shipping in bulk to retail chains anymore. Instead, customers are buying a pair of Stan Smith or Yeezy shoes and a FIFA World Cup t-shirt to support their country. Not quite the same is it? And remember, all of these end-consumers have different wishes when it comes to shipping. Do they have a daunting task ahead? Yes, very much so. Can they pull it off to meet their ambitions in two years and double their online sales? Well, as Adidas’ credo goes: impossible is nothing.