Adidas takes fast-fashion to new extremes
Adidas wants to shorten the time it takes to get new designs into stores. At present, it takes about 12 – 18 months for Adidas’ designs to make it onto shelves – which is pretty standard in the sneaker industry – but to bring its operating margin closer to rival Nike’s, it will have to sell more products at full price. And the company thinks that being able to react more quickly to shifting consumer preference will let it close the gap.
Adidas is up 20% so far this year
SOURCE: Yahoo Finance
Adidas is currently experimenting with ways to achieve this aim, including embracing automation. The company has opened factories in the U.S. and Germany that are staffed primarily by robots to speed up the manufacturing process. But it’s also leveraging technology in new, and even more ambitious, ways.
A pop-up Adidas store in a Berlin mall gave customers the opportunity to design their own bespoke sweater, and have it ready just four hours later. This is an experiment that was engaged in with support from the German government, in cooperation with academics and industrial partners. And Adidas is still reviewing the results to see if it’s something it wants to pursue. But in any case, it is an impressive demonstration of where the fast-fashion trend could end up.
Customers at the pop-up shop entered a darkened room where movement-sensitive lights allowed them to create a plethora of designs. Then, they were presented with a number of options to choose from. They either picked a standard size, or underwent a laser body scan, and they finished design was sent to an industrial knitting machine in the store to be created. Four hours later, the sweater would be available, after being finished by hand, washed and dried.
Adidas brand chief Eric Liedtke explained the importance of fast fashion to investors last week: “If we can give the consumer what they want, where they want it, we can decrease risk… at the moment we are guessing what might be popular.”
Dominion holds Adidas, Nike, and a number of fast fashion companies like Inditex and H&M in its Global Trends Luxury Fund.
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