FASHION RETAIL MANAGEMENT

Assignment on

“RETAIL STUDY ON ADIDAS ORIGINALS STORE”

ADIDAS

INTRODUCTION

Adidas AG (German pronunciation: [ˈadiˌdas]) is a German multinational corporation that

designs and manufacturers sports clothing and accessories based in Herzogenaurach,

Germany.

Adidas was founded in 1948 by Adolf Dassler, following the split of Gebrüder Dassler

Schuhfabrik between him and his older brother Rudolf. Rudolf later established Puma, which

was the early rival of Adidas. Registered in 1949, Adidas is currently based in

Herzogenaurach, Germany, along with Puma.

The company's clothing and shoe designs typically feature three parallel bars, and the same

motif is incorporated into Adidas's current official logo.

ADIDAS strategy in India

Adidas’ strategy in India has been consistent over the past few years. The broad elements of

the strategy are to target the brand to urban youth with our brand proposition from

‘competition to lifestyle’ using the authentic sports platform and build and reinforce

credibility through relevant brand ambassadors and grassroots sports marketing programs.

Further, it would target principal consumption centres, namely metros and build significant

stand-alone exclusive store presence in significant locations. The strategy would be to play to

our strengths, i.e. in apparel and mid to high priced footwear.

One such strategy is to set up an Original store right in the shopping hub of Bangalore which

is the Brigade Road.

TRADE AREA ANALYSIS- BRIGADE ROAD

Brigade Road is amongst the first names any visitor to Bangalore is told about when it comes

to shopping. Stretching for about one kilometer, Brigade Road houses great stuff, whether it’s

food or clothing, cheap or expensive, fun or serious. So let’s have a look at what all can you

do at Brigade Road.

Brigade Road is one of the biggest commercial centres and busiest shopping areas of

Bangalore, the state capital of Karnataka, India. It is also a connecting road between the M G

Road and Residency Road in the city.

It has many shopping centers and retail outlets of international brands. It has also been a New

Year celebration hub in the city for many years. It has many shops, restaurants, pubs and

other happening places. It forms the connection between MG Road and Hosur Road.

Brigade road is in 3 sections. 1st section from MG Road where the metro station is going to

be located till Residency road junction is what is popularly considered as Brigade Road, with

almost all the shops, pubs, cinemas and restaurants located in this stretch. Church street and

Rest house road have more shops and pubs with Church street becoming a food street. One

can find almost any brand and cuisine on this stretch of the road and it is packed with

shoppers and revellers but the density of the crowd depends on the time. The next stretch is

from Residency road till Shoolay circle. Castle street and Museum roads connect at this

Junction. St Patrick's church, Patricks shopping complex, St Joseph's Commerce College, Eva

Mall, Catholic Club etc. are on this stretch. It is not as crowded or as popular as the first

stretch but large shops and many restaurants are on this stretch.

Shopaholics who are fond of branded clothing can find Levi’s, Puma, Gas, Bossini, Park

Avenue, Lee, Allen Solly, Reid & Tailor, Wills Lifestyle, ADIDAS, Provogue, and many

other outlets here. For cheaper but stylish clothes, there is Indo-Tibetan shopping center. At a

little distance off Brigade Road, in an intersecting lane, this multi-storied shopping center

sells great clothes for women. There is Viva on the top floor of Mota Arcade Mall, where one

can find reasonably priced, western clothes for boys and girls of all ages• It provides safe and

ample walking space for shoppers. there are places like Garuda Mall, Mota Arcade Mall and

rex theatre too. Around 3,000-plus vehicles zip down Brigade Road every hour.

RETAIL STORE- ADIDAS ORIGINALS STORE, 216, Near levi’s showroom, Brigade

road

Adidas Original store offers its lifestyle products to savvy consumers. Adidas believe that

consumers want choice. Therefore, the group implemented a multi-brand strategy, which

allows them to capitalise on opportunities from several perspectives, as both a mass and a

niche player. According to that, the brand is able to keep a unique identity and focus on its

core competencies, whilst simultaneously providing the group with a broad spectrum of

products.

Store layout

The store is a simple loop layout with men’s casual wear displayed and stacked on the left

front side, women’s wear and accessories on the left back side, merchandise display in the

middle and accessories like socks bags caps; etc near the billing counter and the whole

collection of footwear arranged on the right wall. The store was brightly lit and well

maintained with peppy young music in the background apt for the target market.

Visual merchandising

Theme-modern ivy

The new collection for the autumn winter 2012 is the modern ivy designs. The store was

designed with posters of modern ivy logo. There were 2 mannequins for merchandise display.

The store was painted bright blue which is the global colour code for ADIDAS originals, in

such a way that it stands out from the clustered stores of brigade.

Merchandise

The Originals Modern Ivy collection pays homage to college fraternities and is bursting with

motifs, slogans and oversized Originals trefoils.

The collection boasts a range of casual and comfortable styles including college jackets,

leggings and tee dresses in a mix of fabric from faux leather to ribbed knit and stretchy

cotton, adding a fresh youthful edge to classic Originals designs.

MARKETING MIX FOR ADIDAS

Product

The group has maintained a culture of providing high quality products aimed at providing the

best value to the costumer. The products portfolio is continuously enhanced through creations

and innovations throughout the companies various categories. This is pursued in order to

cater to the various needs and wants of consumers worldwide. Well-known brands for sports

apparels, equipment and accessories, the Adidas group has a diverse brand portfolio consists

of: Adidas: footwear, apparel and accessories; Reebok: footwear, apparel and accessories;

TaylorMade Adidas Golf: Golf Equipment, footwear, apparel and accessories; Rockport:

Dress, casual and outdoor footwear, apparel and accessories; CCMHockey: Hockey

equipment and apparel.

The key element of their product strategy in Retail is to ensure that relevant products are

presented through the Group’s various retail formats to match the intended consumer profile.

This requires a product offering that is price-competitive, simple to understand, easy to find

and, most importantly, available at the right time and the right place. To achieve this goal, it

will leverage the product assortments, concepts and point-of-sale materials to match real-time

consumer trends. Furthermore, the analysis of daily trading information will provide the

capability to display their products in the correct proportionality and thus increase their full-

price sell-through, especially on best sellers to “make the big bigger”. The product assortment

for adidas originals are varied as in, shoes, apparel, accessories, Jeremy scott, iconics,

adiColor, men’s originals, women’s originals, kids originals etc.

Price

The group is using adapted pricing strategies, depending on which market they are operating

in, so as to achieve its goals. Penetrating attack markets with lower prices or using market

skimming tactics, for instance. In recognition of the intense competition in the global market,

the company is involved in regular evaluation of its price to ensure that the products stay

competitive at the point of sale.

Place

The company has adopted an ambitious global plan to distribute its products to the consumer

with a strong focus on controlled space, including: Own-retail business, e-commerce, Shop-

in-Shop, Joint ventures with retail partners, mono-branded franchise stores, co-branded stores

with sports organisations and other brands. Hence, a high level of brand control is provided.

In addition, an “integrated distribution roadmap” has been set up to ensure further growth and

to increase brand presence in under-penetrated, affluent cities, without cannibalising their

own brands and distribution mix.

Promotion

The Adidas group sells products in virtually every country of the world. Thus, different

promotional tools are used in order to reduce the number of lost customers and to increase

sales. The group has set up an unparalleled portfolio of promotion partnerships with

international recognised sports associations (e.g. UEFA, FIFA, NBA, NFL, and NHL).

Henceforth, commercials, ads, apps for smartphones, product placement, sponsorships for

athletes and sport events (e.g. Berlin Marathon 2011) are implemented.

RETAIL STORE STRATEGY

MISSION: Maximizing sales profits and brand equity for the LAM retail organization

through leadership and management of field organization ensuring the field organization’s

ongoing support through all retail back office functions and continuous improvement of in-

store processes to decrease complexity and increase productivity at field level.

The VISION of ADIDAS Operations is to be closest to every consumer. The function strives

to provide the right product to consumers – in the right size, colour and style, in the right

place, at the right time, across the entire range of the Group’s channels and brands.

The adidas group’s vision on retail strategy is to become one of the top retailers in the world

by delivering healthy, sustainable growth with improved return on investment. Retail plays an

important role for the growth of our Group and our brands. 

The reasons are manifold:

As a place to showcase the breadth of its brands (i.e. concept stores)

To create distribution in markets which do not have traditional wholesale structures

The share of selling space via wholesale is in decline due to industry consolidation

Everything it learns in own retail benefits the rest of the organization

Need for a clearance channel (i.e. factory outlets).

Over the past five years, the adidas Group has evolved into a significant retailer, operating

2,270 stores for the adidas and Reebok brands worldwide. 

Going forward, we have simplified the shape of our store chain, by clustering it into three

different formats, namely brand centres, core stores and factory outlets.

Brand centres, i.e. large stores carrying the full range of each of adidas sub-brands

under one roof, are the bold and powerful statements about their strength, breadth and

depth. This format will be kept to a limited number and only in exclusive locations.

Core stores are the commercial engine for sales and profit across the Group’s retail

organisation, upholding and accentuating each brand’s reputation. There will be

adidas brand core stores, Originals core stores and Reebok core stores and, depending

on their size, they will be categorised and clustered into A, B or C.

Adidas factory outlets will facilitate the controlled sale of excess stock returned from

its wholesale key and field accounts, franchise partners, e-commerce as well as own-

retail stores. Through improved management of regional inventory and limited

planned production, they want to improve and balance their product offering and

therefore further increase its profitability. 

In light of the increase in importance of retail to the Group’s performance, a new central

leadership team was established in 2009.

This team was mandated to develop a global strategic framework and guidelines, represent

retail store and market needs on a global level, and to act as a catalyst to drive commercial

performance for the adidas and Reebok retail operations around the globe. To become a

world-class retailer, four strategic pillars have been defined: 

Focus on the consumer

Achieve operational excellence

Exploit portfolio of brands

Leverage our global presence and scale.

By focusing on these four strategic pillars, they are confident to become one of the top

retailers in the world. In line with our strategic business plan Route 2015, they will further

invest in their own-retail activities and will open over 500 stores by 2015 across the existing

store formats. The majority of these store openings are planned in the emerging markets,

particularly Russia. Another area of focus will be the further roll-out of Originals core stores

to increase the number of distribution points for its apparel collection, and the

implementation of the new vertical business model for the adidas NEO label. To execute on

these pillars, Retail has set its strategic priorities around improving its delivery on THE

RETAIL MIX FACTORS namely:-

1. People

The consumer and our employees are the primary reference points in order to be successful.

Retail constantly strives to interpret and adapt to consumer demand, targeting a mix of new

and loyal consumers, whether it be sports-active, sports-inspired or casual consumers. To

make sure that consumer needs are being met, Retail will set up organisational teams and

recruit store staff that are highly engaged and commercially- and consumer-minded. We want

to build a retail back office and field workforce that thinks and “trades” like a vertical retailer

and whose highest priority is to serve the consumer. To achieve this, in 2010, Retail

introduced a new human resources people strategy called SHINE. 

The aim is to leverage existing best practices and create a single global standard for the field

organisation, to ensure a high availability of broad and deep vertical retail and commercial

skills to develop their staff globally.

2. Premises

The start of a pleasant shopping experience is the store. It is the meeting point between the

consumer and the brands. Therefore, it is of highest importance that its retail environments

are inspirational, athletic, fun and interactive, while at the same time being laid out clearly

and logically to make it easy to shop. In order to drive their sales per square metre, Retail has

set a clear priority on optimising its real estate management process. 

Dedicated real estate teams have been set up who make sure that:

Store location and store size fit to the local market

Store is designed to drive high sales per square metre 

Market share growth and increased market presence is in line with their integrated

distribution roadmap, where Retail will focus on the top 100 cities globally.

3. Processes

Streamlining and harmonising retail store operations and supply chain processes to gain the

necessary speed to respond to consumer requests remains a top priority for Retail in 2011.

From a store perspective, a key initiative is to identify and promulgate best-in-class

operations policies and procedures and ensure consistent adoption to the new retail standards.

Globally consistent manuals will provide clear and commercial guidelines for store

development, visual merchandising and in-store communication procedures to establish

flawless execution and operational excellence. 

They will also continue to work on adapting the supply chain, system landscape and buying

and demand planning processes. This is essential as they strive to increase their in-season

flexibility, be more responsive to changing trends and to achieve economies of scale for the

Group’s retail activities. Shifting our retail focus strictly onto the consumer also means

changing our mindset from a sell-in (push model) oriented to a more sell-through (pull

model) oriented perspective. 

4. Profit

To increase the commerciality and profitability of the Group’s existing retail assets is the

primary focus of all retail teams, whether they are working in logistics, store operations,

marketing or any other Retail function. Therefore they will close down stores not reaching

their potential, as well as closely review and monitor each new store opening or remodelling

to ensure that the targeted profitability and return on investment is accomplished. As part of

Route 2015, a key area of focus is to increase four-wall profitability in existing brand centres

and brand core stores. To support this strategy, in 2010, Retail introduced a new set of

operational KPIs benchmarked to best-in-class retailers.

SALES STRATEGY

Sales function is responsible for the commercial activities of the adidas and Reebok brands.

The function is organised in three distinctive channels – Wholesale, Retail and eCommerce.

By catering to these three business models, the Group aims to service multiple customer and

consumer needs in order to fully leverage brand potential, be more responsive to market

developments and manage channel synergies by establishing best practices worldwide

RETAIL STORE OPERATIONS

Adidas outsources its warehouse distribution operations and obtains merchandise from its

main warehouse of its head office in Gurgaon.

Manages retail standards compliance across global markets like stocking of merchandise

One of the store operations according to the personnel is to contribute to the ROC and

retail operations strategies by ensuring deployment and execution of merchandise across

markets

Enhance existing logistics services to create a flexible and cost-efficient supply chain

Allow customers to order products later, i.e. closer to the time of sale

Own-retail activities are led by a central team, the “franchisor” of the Group

STORE TIMINGS: 10.40 AM to 11.40 PM

STAFF: 2 Sales staff, 1 at the billing counter

Taking advantage of the brand savvy crowd of brigade road, the ADIDAS original store is

well placed to attract its target market.