Adidas Poised to Shutter Stores, Focus on eCommerce Operations
For a while, there were all manner of stories coming out around bank branches shutting down as they made an increasing push toward online and mobile banking. While that’s turned around somewhat in recent months as banks discover that not everyone is into mobile, that’s not stopping other firms from accelerating development in mobile. Adidas recently announced plans to pursue mobile and online shopping much harder, at the cost of several of its brick-and-mortar branches.
Adidas has one major goal in mind: doubling sales derived from ecommerce operations within the next two years. To that end, it’s putting up 900 million in Euros this year alone, and putting most of that spending in digital operations, especially fulfillment warehouses for those online orders so as not to send shipments from whole other time zones.
Should it achieve this target, online sales revenue will jump to four billion Euros by 2020, a major achievement, but one that builds on earlier achievement. The company already saw its online sales hit 1.6 billion Euros, and that represented a 57 percent jump over the previous year. That’s an amazing growth rate, and with greater growth projected, it’s clear that Adidas has ambitious targets in mind.
In support of that ambition, Adidas released a mobile app not so long ago, allowing German, British and American customers to actually customize their sneakers. The app will move into Canada, France and Spain by the end of this year, reports note.
Clearly, the company is planning to put a lot into digital operations, and not without reason. Considering Adidas’ target market has always skewed somewhat younger—which these days means a push square into millennial country—putting emphasis on digital operations just makes sense. The problem with this, of course, is that it not only abandons the baby boomer and Generation X markets, but it also puts things at a bad skew for the Generation Z market, which has previously shown a lot of preference for brick-and-mortar storefronts as well as physical currency.
A robust online experience is a good plan in general, but it can’t be the focus. The millennial aberration rules the landscape today, but when Generation Z kicks in, online likely won’t be the primary shopping target.