What is Happening?

Adidas has revealed a series of goals during its annual Investor Day.

These include transforming into a direct-to-consumer (DTC) business. As well as growing the Adidas app ecosystem and making nine out of 10 of its products sustainable by 2025.

The company believes that DTC sales will account for roughly half of its total net sales by 2025. And that its e-commerce revenues will double from $4.77 billion to $9.54b+

Insights:

• 🛒 Harm Ohlmeyer, CFO of Adidas, highlighted that consumers are now more interested in shopping directly with brands than at multi-brand retailers.
• 📦 The shift to ecommerce means that an increasing share of sales is realised by shipping individual parcels to consumers. This is instead of shipping large bulks of products to wholesale partners.
• 🍃 Sustainability a big pillar of the Adidas strategy and includes partnerships with the likes of Allbirds.
• 🤝 New partnerships have also been announced with fitness companies like Peloton.

What Does it Mean?

Adidas believes that this change in strategy will bring market share gains. As well as higher revenues and margins.

It is clear that the company's investments are being led by consumer trends in product companies. The company has a new focus on athleisure and has developed a new category of Adidas product called Sportswear. This adds to its two other major categories, Adidas Performance and Adidas Originals.