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Five ways Adidas is rethinking franchising

Global sportswear giant Adidas is rethinking its approach to franchising. Neelendra Singh, senior vice-president of global direct to consumer and franchise at Adidas explained to the Drapers Fashion Forum how the business is scaling up its offer across touchpoints.

Increasing control

Adidas changed its outlook in 2013, taking a greater amount of control over its franchise partners. “In recognition of the fact that the franchises are essentially the consumer facing business, we needed more control over how we showed up in these stores,” said Singh. “We created a senior global franchise team. Previously we looked at each market separately, but now we have started looking at global standards. Whatever is standard for our own retail is standard for franchise.”

Scaling up the premium experience

Singh described one of the core challenges of scaling up as ensuring the communication of the brand’s premium experience across all franchise partners. “Originally, franchising was to drive distribution,” he said. “There was not a focus on premium presentation. In some cases our standards were not adhered to or followed strictly.”

Singh described staff, control of product and location as key to ensuring a premium experience. As part of this, last year the brand opened a global sales academy, aiming for a uniform high standard across own retail and franchise.

Data visibility

With 13,000 franchise stores worldwide, the ability to capture data from all stores provided a huge opportunity for Adidas.

“In franchise, we want to know what is selling and what is not,” he explained. “That data drives a better experience for the consumer as well as operational excellence. We’ve spent a lot of time developing our data visibility. Now, at the push of a button I can get sell-out data from 11,000 franchise operations.”

People and retail capabilities

To further ensure franchise partners fit with Adidas’s standards, the business helps them in building infrastructure and retail knowledge. Today, Adidas is seeking to create retail capabilities for its partners.

“If a capability is available to the company, it’s available to a partner,” said Singh. “We have a fair amount of control over franchise environment. In consumer-facing technologies we have a fair amount of control – as the content is driven by us. Staff-facing technologies have not gone so far yet and a spectrum of technology is used. We have a goal that technology will be unified across partners.”

A new approach to strategy

Adidas is setting global benchmarks and standards, with governance and compliance policies specific to different markets. Additionally, Singh says they are looking at store portfolio management more closely, as well as rethinking partnerships.

“It’s the right time to look at our partner portfolio,” he said. “We’re going to be ruthless with our relationships – making sure we invest with people who want to invest back.”

 

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