Introduction
Covid19 has changed the consumption patterns of individuals across the world. The history of mankind will remember 2020 as the year of “sea changes.” As a marketer, it can be said that consumer behavior patterns will show a spectrum of changes where an undertone of old-world charm will be visible. In the case of the fashion industry, it can be said that most of the consumers will follow the trends that will support them in the “new normal” routine of their life. Broadly this new normal routine can be underlined with the help of two behavioral changes. The first change is related to the predominance of ‘work from home” culture and “stay at home” warnings. The second change is associated with an increase in the exercising routines of the youngster, kids, and elderly people (Wallece, 2020).
A leading company like Adidas can identify a plethora of opportunities by changing the lanes of their marketing activities. The present critical review is an opportunity to explore the recent shift in the strategy of Adidas when they focused more on digital mediums and started taking a note of the consumer behavior under the “new normal” circumstances. This review is based upon the facts and observations presented by Sarah Vizard in an article which was published in “Marketingweek.”
How Adidas Imbedded and applied new marketing processes
Author Sarah Vizard in her article “Adidas cut media spend by 25 percent during the lockdown but now plan to ‘reaccelerate,” mentions the facts related to the losses made by the company during the period of lockdown. She mentions that the company made a loss because physical stores were closed (Vizard, 2020). She also mentions the changing consumption patterns of the customer. The major reason behind the losses made by the company can be attributed to the fact that 70 percent of the stores holding the products were closed during the first and second quarter of the year.
When we start analyzing this loss in the terms of marketing especially the mechanisms associated with 7P’s of marketing, it can be said that the company failed in earning profits because the component of “place” was not performing. It can also be said that companies’ sales met with a slowdown because of its overdependence on the “place of purchase (Pappas, 2020).”
The same article also explains the plans of the company where they are shifting their focus towards online marketing activities. This change can also be defined under the framework of 7P’s. An expert can see that Adidas is implementing its new marketing process by focusing more on “Perception” rather than “place.” This new marketing process identifies the strength of the Internet as a strong medium. When the CEO of Adidas says that new marketing plans catering to the internet-driven audiences will accelerate its financial performance then he is referring towards some aggressive and personalized campaigns to reestablish this brand (Thompson, 2020).
Another method to explain this change in the marketing strategy can be stated with the help of a statement that goes as under. “Adidas is integrating its market base from strength to strength by capitalizing on its brand value.” This statement can be substantiated in the light of the statement that says “the impacts of Corona Pandemic have accelerated the processes that were struggling in the digital domains.” Almost a year ago, companies like Amazon were busy winning the trust of the customers by adding more flexibility in their online shopping experience (Yakob, 2020). Players like Adidas and others were considering it as another avenue for the promotion of goods and a tangential market place where they can sell a small percentage of goods. Online resources were promising avenues for them; however, the rate of growth was slightly slow. It will be pertinent to mention the name of a competitor is Nike, in the year 2019, well before the arrival of the pandemic, Nike started working in the direction to shift its base from real-world markets to digital markets, to facilitate this change, Nike curtailed down its presence in the open market and started focusing more on fashion stores owned by the parent organization. However, in the case of Adidas, it can be said that they were following the conventional model but the impacts of the Pandemic have changed it all (Faull, 2020).
The legacy of Adidas gives us an idea that this company has capitalized on the “mass frenzy” created by the sporting events and celebrity endorsements. However, under the new marketing schemes, the company is not interested in sporting events; the focus is more on the personalized approach to catering to a customer. The brand perception of Adidas is very high and gives an esteemed brand value. It happened because for the last three decades this company holds a prominent place in the sporting arena, it went for roadblock advertising in many major sporting events. Now the same brand perception will help the company in the digital world as well (Mahendra, 2020).
The reflection of the new marketing process over the current marketing process
When the CFO of the company Harm Ohlmeyer says that he is focusing more on developing a digital eco-system for the brand, it shows that he is trying to create an ambiance for a new digital place of purchase. When he mentions an increase in the membership of a fitness application promoted by the company, he is indicating a “customer loyalty related activity.” The case of Adidas in the post-Corona world testifies the fact that E-commerce platforms can replace real-world markets or physical markets quite easily (Arcieri, 2020).
The process of winning the trust of a customer can be difficult under the new marketing regimes because of the barriers caused by technology. In the case of Adidas, an absence of the “touch and feel” of the product can be considered as a big barrier. However, when the CEO of the company says that a customer won by a digital effort is a more valuable customer for the company, it shows that the new marketing strategy of Adidas is penetrating the market and finding a space for itself (HOW MARKETERS RESPONDED TO THE CORONAVIRUS IN THE FIRST THREE MONTHS, 2020).
Omni Channel Marketing theories and various business models for Adidas in the post corona world
Currently, the Omni Channel marketing efforts of Adidas can be explained with the help of two theories. The first theory is about the “audience-driven Omnichannel marketing” and the second theory is about the “personalization of the services” that allows a customer to enjoy the driver’s seat during the journey of purchase and its aftermath. The basic theories are given by players like Google, Hubspot, Harvard Business Review and Big Commerce agree to the point that the phases of Omni Channel market efforts are unpredictable because a consumer can decide at any given juncture. For instance, in the case of the training apps developed by Adidas, it can be seen that during three months the number of the respondents increased by triple fold, however, this success cannot be considered as a catalyst for the purchase decision. However, it creates a unified message and experience for the customer. It also means that Adidas is not promoting its goods directly, Instead of it, it is promoting some other means catering to a particular need of the customer (Magee, 2020).
The process of designing an application acting as a coach for setting up fitness goals can also be seen from the lens view of the personalization of the services for the customers. Under the present conditions, the company is planning to come up with some indirect messages and processes where the products of Adidas can serve as a potential solution. The company is changing its business model and now promoting its product to cater to the new age fashion needs of the customers (Watson, 2020).
The case study presented by Sarah Vizard shares the insight of Adidas about the changing ways of the customers, it clearly states that Adidas is now designing and promoting some solutions for the customers that have adopted the culture of “work from home.” This type of culture forces a person to wear relaxing clothes, shoes of Adidas can become an attractive accessory for these people because of the fashion statement (Vizard, Adidas hails effectiveness of #hometeam campaign but cuts spend in response to pandemic, 2020).
Recommendations
The strong presence of Adidas in the Pre-Corona world can be utilized to procure some leverage for the brand quite effectively. The present policies of the company along with the marketing efforts in the era of “new normal” are not sufficient because most of them are limited to a display. It can be seen in the example of “ready for sport” videos. These videos are successful in the terms of gaining a sufficient amount of viewership, however, they fail in the creation of an interactive interface between the end-user, viewer, and the brand. The brand perception of Adidas on social media should be treated differently. To enhance its presence and its impact, the company can follow a set of recommendations (Atkins, 2018 ).
The existing brand perception of Adidas is very strong in the minds of end-users. The company can come up with more virtual tours and this time focus on their design testing labs. In the past, it was a difficult task for the company to promote its design lab because advertising spaces were costly and the attention spans of the customers were short, however, under the present theories the attention spans of the customers are increasing and they are hungry for detailed knowledge about the product.
The company has this glorious history of creating a need for the products. The “aerobic boom” of the ’70s, the “yoga boom” of the ’90s, and “gym culture” of the 21st century are few examples when the company promoted the stream of the exercise as the need for the customers and presented its brand as the helping aids ensuring the best results. Under the present milieu, the same tactics can be repeated with the generation Z customers. This generation is dependent on the internet for the procurement of knowledge and companies like Adidas can utilize this need by creating some platforms where products of Adidas can form the background.
Social media forums connecting celebrity experts with the common masses can also become a fruitful virtual place for the mass engagement of prospective customers. Instead of searching for expensive A-list celebrities and expensive ad-campaigns, the company can come up with small celebrities and experts in the field to create some meaningful videos that can cater to the sentiments of the knowledge economy.
The creation of an interactive interface is the need of the hour for Adidas, it is important because interaction with the customers can be considered as a step in the direction of the personalization of the services. Interaction with the customers is very important to complete the Omni-channel cycle. The company should try to integrate all its digital marketing efforts on a social media forum where it can integrate them all and present a complete picture for the prospective customers.
Conclusion
The facts and observations shared by Sarah Vizard indicate that Adidas is rising to the occasion and stepping aggressively into the world of digital marketing. The company is converting a crisis into an opportunity. The company is developing an ecosystem that is dependent upon the concept of Omni-Channel marketing; the previous business model of the company was dependent on a multichannel marketing policy.
Under the present scheme of things, Adidas will lose a fair deal of share in the market because of the restrictions imposed by social distancing and physical barriers associated with the movements of the prospective customers. A change in the consumption patterns of the market will also contribute a lot to the changing demand patterns of the market. An aggressive shift in the digital domain can help Adidas in establishing synchronization with the new patterns of demand and help the company to capitalize on the leverage that it earned in the form of a strong brand perception during the pre-corona world.
While predicting the future of Adidas in the E-commerce milieu it can be said that the success of the company is dependent on its ability to convert its positive brand perception of the past into an asset for the futures markets. This brand perception will help the company in bridging the gap caused by the absence of “touch and feel” forced by the pandemic.
References
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