A couple of weeks ago, we at J.C. Williams Group had the opportunity to meet with our Ebeltoft Group partners at our semi-annual conference in Chicago. One of the hot topics was the Ebeltoft Group’s newest publication Brands Going Retail. This paper documents how leading manufacturers are using their retail divisions to help communicate their brand as well as generate additional revenue for the company.
While in Chicago, we were treated to a tour of stores that really reinforced how exciting retail can be. The big sports brands are the ultimate examples of how manufacturers can outdo retailers when they marshal their significant resources. Adidas, Nike and Under Armour have created some of the most exciting stores in Chicago.
The new Under Armour store on N. Michigan Avenue is a “must-see.” It showcases some of the many products that Under Armour now sells, but are not typically associated with the brand. Categories such as golf and footwear standout in the store as exciting and experiential. Not only is there the amazing graphics that sports brands do so well, but also an area for fitness measuring technology for the enthusiast who wants to track their progress.
How do these brands innovate and reinvent themselves in this amazingly competitive world of sports products and retail? Michael Rossi, the president of Adidas Canada recently spoke at a retail conference and described the process that Adidas North America developed to ingrain innovation in the culture of the organization. Rather than setting up an innovation lab away from the daily operations of Adidas, as many companies like Walmart and Macy’s have done, it decided that innovation should come from everyone in the organization.
Adidas first took 1,000 of its North American staff through an extensive online learning process that took 4 months. All graduates of the program were encouraged to submit their ideas regardless of their role in the company. Thousands of ideas were submitted and culled down to 100. The top nine ideas were selected and their proponents were invited to Adidas headquarters in Portland, Oregon to further develop their ideas. The winning idea will be fully developed by the company.
According to Rossi, the ideas were not just product based. They included improvements to processes and design. I can only imagine how stimulating this was for the staff. The challenge for Adidas is to continue to encourage this innovation throughout the company without an extensive process. However, what the process does communicate quite clearly is that innovation is important and this is recognized at the most senior levels in the organization.
Clearly, sports brands like Adidas are models for using retail as a tool to really understand the customer and to test out new ways to reach the customer. The challenge for many manufacturers without this access is that they are one or two steps removed from the customer, so they depend on direction from their retail partners who, in many cases, are not truly innovative. And, this is exactly why we continue to see manufacturers or brands take the leap and “go retail” in order to establish that critical direct relationship with the end consumer.