Index Transforming Adidas Adidass chief executive Kasper Rrsted announced in early 2017 that the sports apparel brand would turn its back on TV advertising. Is it working? THE PITCH R E AC H I N G YO U N G E R CO N S U M E R S 40 % 100 % Proportion of Adidas ad budget to be spent on digital channels, crucial to capturing younger customers of its clothing lines Proportion of global population that will be Gen Z (born 1995 or after) in 2020 Source: Adobe Summit 2017 $3,000,000,000,000 X4 Three trillion dollars Estimated Gen Z buying power Source: bit.ly/2CvDJW7 Aim: to quadruple e-commerce revenues by 2020 But only six per cent... One billion euros to four billion euros Boost to online business by 2020 of Adidass current sales are online $17bn Adidas annual sales in 2017 4bn 2020 1bn 2018 $1bn Sales from e-commerce in 2017 W H AT A D I DA S D I D N E X T Digital campaign rollout 1 2 Targeted customers with inspirational brand videos, focused on running and fitness Delivered e-commerce messages, driving consumers to its website to make purchases Uplift in conversion rates +39 % 3Q 2017 1Q 2Q 31 +39 E-commerce up in the third quarter of 2017 Rise in conversion rates 4Q % % x75 3Q Sales increase in North America during the third quarter of 2017 20,000 One-on-one communications via Twitter in 2017, with the help of 8am-10pm, seven days a week, staffed social media streams Source: bit.ly/2ABp20h T H E R E S U LT S A R E P O S I T I V E Most popular product: Stan Smith sneaker Athleisure 50.1 % 2016 10 % 52.3 % 52.3 % 10 % Global sales growth year on year in the quarter to June 2018 +16 % Growth in North America +27 Growth in China Source: on.wsj.com/2PRyT8P cim.co.uk/exchange % 2017 The companys gross margin the amount it keeps after paying suppliers for the raw goods up from 50.1% the year before