Mass Customization in Adidas
Presented by: Akash Choudhary
Paritosh Sharma
Yousra Emara
Contents
• Adidas Journey.
• Adidas v/s Nike
• Mass Customization – Customer Centric
Enterprise
• Modes of customer participation
• Stages of MC in Adidas
• Paradox of tie Strength in customer relationship.
• Mass customization capabilities
• Future Development in MC
• Conclusion
Adidas Currently
• The biggest sportswear
company in Europe and the
second Worldwide.
• Adidas sales revenue is €14.49
Billion (in 2013).
• Total number of employees
50,728 (in 2013).
• It produced 257 million pair of
shoes worldwide and 341 units
of sports apparel (in 2013).
Adidas History
2006
1924
ADIDAS
founded by
Adolf Dassler
Acquisition
of Reebok
Split between
brothers.
Rudolph
Dassler
founded Puma
1963-1967
1999
Started mass
customization
1947
1979
Emergence of
new
competitors
like NIKE and
REEBOK
Introduction
of soccer
balls and
apparels
Revenue : 14.49 Billion Euros
No of Employees : 50,728
Revenue : 25.3 Billion Euros
No of Employees : 48,000
Started in 1920 and implemented mass
customization in 1999-2000.
Started in 1976 and implemented mass
customization in early 1999.
Main focus European Market.
Main focus American market. All
Manufacturing units in East but designing in manufacturing outsourced. Design and
Germany.
marketing in USA.
Only sports brand to offer 3 options in mass Mass Customization focuses on design.
customization.
Performance based.
Design based.
Soccer, Tennis, Athletics
Basketball, Cross-training, Running, Women
and Children’s shoes
Aggressively entering Soccer.
Need for Mass Customization
• Between 1980-2000 variety of shoes increased
by 3000 percent.
• Creating individuality became the necessity.
• But the cost and risk involved in showcasing
new variety was huge.
• In late 1990s Adidas decided to “go back to
the roots”.
• Customization demanded immense customer
relation.
Modes of Customer Participation
Mode 3 – “Design BY
customers”
•Customers as active co creators
•Customer participation in innovation
•For e.g., Include toolkits for user innovation, idea
competitions, user workshops etc.
Mode 2 – “Design WITH •Quasi interaction
customers”
•Company listens to customers but does not engage in a
dialogue
•E.g. Customer surveys, Different solutions to customers for
concept testing
Mode 1 – “Design FOR
customers”
•Communication is one way
•Firms use customer information from diverse input
channels
•For e.g. feedback from sales, internet forums, online
community etc.
Adidas Mass Customization Offerings
• miAdidas: Program focused on performance
shoes and combines fit (measurements), function
(climate control, insole), and form (color
combination)
• miTeam: Targeted sports teams, where a coach,
for example, can customize sportswear for all
team members
• miOriginals: Allowed consumers to create their
own style
• miCoach: Personalized online training program
miAdidas Fulfillment Process
Stages of MC in Adidas
• Piloting
• First Rollout
Growth and Expansion (3rd and 4th Phase)
• Sustainable Business Model (5th Phase)
Stages of MC in Adidas
Piloting (Launched in 2000)
• Evaluated the feasibility of the offering during a two-month
trial period.
• Offered one model of custom (football) trainers at six
different events around Europe.
• The pilot helped evaluate the possible degree of available
variety.
• Knowledge gained in this stage was used to reengineer the
sales, product models and backup processes.
Customer Feedback: POSITIVE
Stages of MC in Adidas
First Rollout (Launched in 2001)
• Two further models were offered (for running
and tennis)
• Retailers were asked to participate by testing the
product offering
• Out of 1000 retailers, 100 were ultimately
selected
Evaluation: POSITIVE
Stages of MC in Adidas
Growth and Expansion (Launched in 2003-2005)
• The line of products was enlarged o its current scope of
four kinds of sports (football, running, tennis, and
indoor)
• More retail outlets were added (fourth phase, 2005).
• More attention to the commercial side of miAdidas
Evaluation: POSITIVE
Stages of MC in Adidas
Sustainable business model
• Support the brand image and enhance the other
(inline) products
• Position itself as an innovative player on the
market
• Improve relationships with its users
Evaluation: POSITIVE
Paradox of tie strength customer
relationship
• MC Literature says : Strong ties constraints
innovation and radical change in an
organization.
• Solution :
1. Ignore customer preference – eg: design and
entertainment forms
2. Sustain ties with majority and generate revenue from
them while create innovation from the ones with
weaker ties.
Mass Customization Capabilities
• Defining Solution Space
• Robust Supply Chain Process Design
• Choice Navigation
miAdidas
engaged in
conventional
research
techniques. But
wasn’t effective
enough.
Step 3
Offered
customization
on existing inline
shoes, mostly of
premium
products of each
category.
Step 2
Step 1
Defining Solution Space for miAdidas
But very soon
engaged in pilot
prototyping with
potential
customers from
sporting events.
Defining Solution Space for miAdidas –
First Customer Feedback
• 73 % felt good and willing to pay upto 30%
more.
• 80 % understood delivery will take >21 Days.
• Based on criteria :
– Fit was mentioned most often
– Followed by Function/ Performance
– Then Design
Defining Solution Space for miAdidas –
Result
• Decided to position miAdidas as a
performance product with 3 dimensions:
– miFit (Measurement)
– miPerformance (Functionality and components)
– miDesign (Color and graphics)
In recent years design has also been very
important:
– In order to go online
– To target young creative customers
Robust Process Design for miAdidas
• Customers served within predefined
components, company’s solution space
– Library of predefined casts is used, larger than
standard size assortment.
– Different show sizes for both feet.
• Same supplier used for custom shoes for
corresponding inline products.
• Flawless Order management system.
Robust Process Design for miAdidas
• Distribution :
– Manufactured in different country and delivered
with 21 days.
– Express courier used.
– Orders can be tracked.
Choice Navigation for miAdidas
• Also known as co-design tool.
• 3 possible place for customer to place order:
– Flagship Retail stores
– Events
– Online
• Customer data saved and reused.
SWOT Analysis of miAdidas
•
•
•
Weakness
Strength
Less fashion risks, discounts, and inventory
costs.
Adequate financial resources for financing
future growth
Close customer contact at the miAdidas
shop unit.
•
•
•
Opportunities
•
•
•
Possibility to build strong customer
•
relationships
Access to aggregated market information
can continuously improve inline assortment. •
miAdidas is the only full customization
business in the athletic shoe industry. (three •
customization options: fit, performance, and
aesthetic design)
High logistic costs due to manufacturing in
Asia.
No configuration system available for online
sales.
Dependence on external partners in
manufacturing and logistics.
Threats
Rather long delivery times may hinder
growth when new customer segments are
targeted.
Unknown market potential for custom
footwear.
Potentially limited willingness-to-pay for
custom shoes.
Future Development in Mass Customization
• Adidas should improve their supply chain in order to decrease their fright cost
and time.
• However, the company must continue to examine and redesign current
processes in order to create the best possible fit between its mass customization
business and the mass production.
• Adidas should integrate various functions along the entire value chain, enormous
efficiency potential could be leveraged.
• More incremental innovative ideas could be generated in the future through
having strong customer relations and to expand upon its customer interaction
processes.
.
miAdidas Conclusion
• The development of miAdidas reveals a long learning path and trial‐and‐error
process for implementing and scaling‐up a mass customization offering.
• Mass customization for Adidas contributed
to brand building and positioning the company
uniquely on the market as a performance centric
product.
• No other competitor offers a product with
such a high degree of customization.
•
They have changed the way world see MC by
going against the paradox.