Rooted in Sport: The Origins of Adidas

Studying the origins of Adidas through “Sneaker Wars” by Barbara Smit, has been something I’ve yearned to do since applying to internships in college. Seeing that all the Adidas interns were given this book to read before beginning their time with the brand, I thought why not study up myself if I wanted to get into the sports product industry. One segment of the book I thought worth highlighting was the birth of Adidas Equipment: a pivotal moment in Adidas, and sports product history.

After achieving much success in international competitive sports, Adidas became most well-known for their footwear, but as their footwear business began to mature the company began to seek out new markets, one of which was athletic apparel.

In 1972, for the Munich Games, their signature three stripes would no longer cover just athletes’ feet, but their chests as well. From here, Adidas would be able to leverage head-to-toe brand deals with players and clubs, and even begin to place their ‘trefoil’ logo on everyday athletes. Founder “Adi Dassler could not deny that the move into clothing had hugely benefited Adidas. He didn't have a problem with that, as long as the garments remained strictly functional.” But all hell broke loose when Horst Dassler, Adi’s son, decided to ignore such restrictions (103).

"I want to be a leisure brand," Horst told startled executives (207). Going into the 1980s, Horst decided to disregard his father’s wishes for strictly functional apparel. While Adidas did well in leisure, selling millions of colored t-shirts and sweaters, soon they lost focus, and their core footwear business began to suffer.

Failing shoe designs and the move away from sport caused lots of confusion amongst their distribution channel members: “Adidas had alienated sports retailers, who watched them dilute their appeal as a sports brand. In addition, it baffled fashion retailers, who wondered what Adidas products were doing on their shelves. It too caused frictions in the company, where lifelong sports designers suddenly had to mingle with people from the fashion industry” (208).

While there was much confusion at Adidas over what market they were truly in, Nike had redefined the sports business in the United States. As they grew, Adidas knew they could no longer ignore Nike’s prowess in the industry. To remain competitive Adidas had to reduce their production costs, increase their marketing budget, and refresh their product and brand DNA.

To set separate themselves from the pack, Nike’s growth in the early eighties came through culturally relevant advertising featuring some of the most inspiring American competitors and endorsements of a select few athletes and players with whom they could build the Nike brand around. “Such commercials were completely unprecedented in the sports business, and Adidas had yet to run ads that were not entirely dedicated to their products” (192).

To make matters worse, where Adidas had previously thrived, American retailers were forced to give new brands like Nike a try due to their poor supply. To create more demand, Adidas needed to up its global marketing budget, which had been reported as less than Ford’s marketing budget in Germany alone.

“To combat these retailers, Adidas had to shut down many European plants and move eastward if it was going to make room in its budget to take on Nike. They couldn’t counteract Nike until it aligned its production costs” (210).

While Adidas did move their production to Korea, Taiwan, and China, they made the mistake of retaining partial ownership of their plants and staffing German technicians to oversee production. These actions did not enable them to match Nike’s costs considering Nike dealt with entirely independent far eastern manufacturers. Coming with these growing pains, as “Adidas failed to deliver on time the company was confronted with irate customers and growing losses” (210).

Since settling Adidas’ production issues, Horst Dassler’s next idea would be to buy out his American distributors. Completing that goal after nearly two years of haggling, Adidas unfortunately wound up with tons of obsolete goods, four warehouses, and a sales force of mixed quality. The final bill was an astronomically high $120 million. On the bright-side, Adidas could now streamline their American sales distribution channel.

With Adidas now in control of their supply chain, they could begin to focus on marketing a new product. To solve their apparel and brand dilution problem they would recruit former Nike men Peter Moore and Rob Strasser, to repot Adidas on American soil.

Arriving in Herzogenaurach only one day prior, Strasser and Moore knew Adidas as “the brand that equipped athletes, providing them with the tools they needed to compete.” Therefore, they suggested a line of clean-cut, no-frills sports shoes and apparel. To distinguish this line from the flowery and fashion-oriented products turned out by Adidas, they called it Equipment. “Aided by some archive material, Strasser referred to Adi Dassler as "the equipment manager of the world," an unostentatious craftsman who had built his business on inventions that genuinely benefited athletes. That was what Adidas stood for” (262). Looking at the market in its day, “Strasser rightly predicted that, after the excesses of the eighties, consumers would yearn for a return to basics. Equipment would be the answer: a line with only simple but high-quality products that would have obtained Adi Dassler's stamp of approval” (263).

Now that Adidas had the marketing budget it was time to tell their entirely unique story: the story and genius of Adi Dassler. During Strasser and Moore’s presentation “A ripple of excitement went through the audience when a new logo was blown up on the screen. They suggested that, to distinguish Equipment from other Adidas products, they were to be fitted with their own logo: instead of the ‘Trefoil,’ the Equipment clothes and the heels of the shoes would feature three slanted stripes in growing order, forming a sort of triangle” (265).

The new logo was a smart move from a brand marketing perspective to protect brand from dilution incase ‘Equipment’ failed. It also allowed consumers to build new associations apart from the Adidas ‘trefoil’ which had lots of colors and designs while this new line was about quality and simplicity.

A quote from Soled Out on Adidas Equipment said "like a Lamborghini Countach, the shoes were designed to deliver the ultimate in uncompromising performance. By combining manufacturing excellence with definitive colorways and high-spec material combinations, EQT [Equipment] was found in the exclusive end of the sports store... The slogan said it all. 'The Best of Adidas.'" - Peter Kampfmann 'Mr EQT' 2011

Going back to your brand roots is something that only you can do. Authenticity will lead you back to your light, and if you need help you can always rely on others to bring new perspectives and aid in creating solutions to your most challenging problems. “Nike could always come up with another Air, but only Adidas could do Equipment” (265).

Credits: "Sneaker Wars" by Barbara Smit