CRM helps Adidas know its customers one shoe buyer at a time

Adidas is a leading global maker of athletic shoes, clothing, and accessories, selling 1.2
million pairs of shoes each day. The company is headquartered in Herzogenaurach, Germany,
has over 57,000 employees worldwide, and produced net sales of 23.6 billion Euros (U.S.
$27 billion) in 2019. It is the second largest sportswear manufacturer in the world after Nike.
Adidas is also a leader in digital and online marketing. The company's most important store is
no longer a physical store-it's a website. The Adidas website is a key channel for offering
connected and personalized customer experiences that help differentiate Adidas from
competitors and lead to increased sales. E-commerce is Adidas's most profitable point-of-sale
channel, with online sales reaching 5.509 billion Euros (U.S. $6.180 billion) in 2019.
Adidas does not compete on price but on the quality of its brand and the customer experience.
The transition from brick-and-mortar to digital as the preferred shopping medium has shaped
the way the company keeps up with changing customer prefer-ences. Customers are clearly at
the center of Adidas's business, and their experience with other online retailers such as
Amazon has made them want a relationship with Adidas that is more personal. To serve
customers better and manage all of its relationships with them, Adidas turned to Salesforce.
com, which features cloud-based tools for customer relationship management (CRM) and
application development. Salesforce.com helps Adidas identify key customer segments,
develop closer ties to customers, and design differentiated experiences tailored to each
customer's needs. Salesforce CRM tools make it possible for Adidas to have a single view of
each customer across all the various channels through which that person interacts with the
company.
Salesforce Marketing Cloud is a CRM platform that allows marketers to create and manage
marketing relationships and campaigns with customers. The Marketing Cloud incorporates
integrated solutions for customer journey management, email, mobile, social media, web
personalization, advertising, content creation, content management, and data analysis. Every
imaginable custómer interaction and engagement is covered. The software includes predictive
analytics to help make decisions such as, for example, what channel would be preferable for a
given message. A component called Journey Builder helps marketers tailor campaigns to
customers' behavior and needs, demographics, and communication channel preferences.
The Marketing Cloud is connected to Salesforce. com's Sales Cloud and Service Cloud to
provide a unified experience and prevent customers from being contacted separately by
representatives from sales, marketing, and service groups. Service Cloud is a platform for
customer service and support. Companies using Service Cloud can automate service
processes, streamlining workflows, and locate key articles, topics, and experts with
information to help the company's 1,100 customer service agents. Service Cloud can
"listen" and respond to customers across a variety of social platforms and automatically route
cases to the appropriate agent. Service for Apps makes it possible to embed customer support
software into mobile applications, including features for live agent video chat, screen sharing,
and on-screen guided assistance.
Service Cloud makes it possible to deliver service that is more personalized and convenient in
whatever form each customer prefers-email, web, social media, or telephone-all from a single
application. Adidas is able to deploy its centralized e-commerce site globally by using the
Salesforce Commerce Cloud. Commerce Cloud supports every language and currency
required for the company's business throughout the globe. Adidas uses the knowledge of
individual customers and their preferences obtained through Commerce Cloud to create better
products, which can be manufactured and delivered to the customer very rapidly. Adidas is
also using the Salesforce DMP data management platform to capture online and web
behavior from digital actions across all channels and devices.
To move even closer to the customer, Adidas developed a mobile app that customizes
content, interactions, and products based on the customer's personal preferences and behavior
that have been identified via various digital points of engagement. The app features
customized product recommendations, color preference and location, order tracking, blog
posts, personalized articles, videos, real-time updates concerning an individual's sport and
sports star preferences, and an intelligent online chat tool called Einstein to help answer
customer questions and make more customized product recommendations. The app works
with Apple Pay and Android Pay mobile payment systems. Jacqueline Smith-Dubendorfer,
Adidas Vice President of Digital Experience Design, believes that using Salesforce for
customer relationship management has enhanced the company's ability to treat each customer
as an individual. Who is this person?
How much do we know about that individual? Where did that person come from? What is
that person interested in? With Salesforce CRM tools, Adidas can now answer these
questions much more easily. CRM provides the information for Adidas to adapt what it
presents to the customer to deliver as close as it can to what the customer is actually looking
for. Adidas can now connect one-to-one with every customer, across multiple channels and
on any device.
Sources: "Adidas," www.salesforce.com, accessed February 11, 2020;
www.adidas-group.com, accessed February 10, 2020; "Roundup:
E-Commerce Sales Increase for Adidas," digitalcommerce360, August 9, 2019; Stuart
Lauchlan, "Dreamforce 2018; Adidas Gets Closer to Customers by Adopting an Athletic
Mindset in Business.
Diginomica, September 27, 2018; and Nadia Cameron, "Adidas Taps Data and Technology
Smarts to Build Personalized Digital Engagement with Customers," CMO, November 7,
2017.
1. Analyze Adidas using the competitive forces and value chain model.
2. What is Adidas's business strategy? What is the role of customer relationship management
in that strategy?
3. How do information systems support Adidas's strategy?
4. How did using Salesforce.com make Adidas more competitive? How did it change the way
the company ran its business?
5. Give an example of two business decisions that were improved by using Salesforce.com.
1. Analyze Adidas Using the Competitive Forces and Value Chain Model
1.1 Competitive Forces Model
​ Threat of New Entrants: Low
- Barriers to Entry: The sportswear industry has high barriers to entry, including substantial
capital requirements, brand loyalty, economies of scale, and established distribution
networks. Adidas’s strong brand and market position make it difficult for new entrants to
compete effectively.
- Brand Equity: Adidas’s established brand reputation and market presence contribute to
customer loyalty, reducing the likelihood of new competitors successfully entering the
market.
​ Bargaining Power of Suppliers: Moderate
- Supplier Power: Adidas sources materials and manufacturing services from a diverse
network of global suppliers. While there are many potential suppliers, the company’s scale
and established relationships give it leverage.
- Vertical Integration: Adidas relies on a mix of in-house and outsourced manufacturing,
balancing control with cost efficiency. This strategy helps mitigate risks associated with
supplier dependence.
​ Bargaining Power of Buyers: High
- Consumer Choices: With numerous alternatives available, consumers have significant
power. They can easily switch brands based on price, quality, or brand perception.
- Personalization: Adidas addresses this power by focusing on high-quality products and
personalized customer experiences through CRM tools, which help maintain customer loyalty
and reduce the risk of switching.
​ Threat of Substitutes: Moderate
- Substitute Products: Substitutes can come from non-traditional sportswear brands, lifestyle
brands, or alternative athletic solutions. However, the strength of Adidas’s brand and its focus
on innovation help counteract this threat.
- Innovation and Differentiation: By continually innovating and offering unique value
propositions (such as personalized experiences and advanced technology), Adidas reduces the
attractiveness of substitutes.
​ Industry Rivalry: High
- Competitor Landscape: Adidas faces intense competition from major brands like Nike and
Puma. The rivalry is driven by factors such as product innovation, marketing strategies, and
customer loyalty.
- Market Positioning: Adidas differentiates itself through its brand quality and
customer-centric approach, leveraging CRM tools to create a personalized experience that
helps maintain its competitive edge.
1.2 Value Chain Analysis
​ Inbound Logistics
- Suppliers and Inventory Management: Adidas manages a complex global supply chain,
sourcing materials and components from various suppliers. The use of technology, including
Salesforce, helps streamline logistics and manage inventory efficiently, maintaining product
quality and ensuring timely delivery.
​ Operations
- Manufacturing: Adidas utilizes both in-house and outsourced manufacturing to optimize
production quality and cost. The company integrates advanced technology and data analytics
to improve its production processes and accelerate time-to-market for new products.
- Product Innovation: The company places a strong emphasis on innovation, investing in
research and development to advance its product offerings and maintain its competitive edge.
 ​ Outbound Logistics
- Distribution Network: Adidas has a global distribution network to efficiently manage
product deliveries to various markets. E-commerce plays a significant role in its outbound
logistics, supported by the Salesforce Commerce Cloud, which facilitates language and
currency support and enhances the efficiency of product delivery.
​ Marketing & Sales
- Digital Marketing: Adidas employs a range of digital marketing strategies, including
personalized online experiences and social media engagement. Salesforce Marketing Cloud
assists in managing targeted campaigns and improving customer engagement.
- Customer Experience:The focus on delivering connected and personalized experiences is
central to Adidas’s marketing strategy, utilizing CRM tools to enhance customer interactions
and foster brand loyalty.
​ Service
- Customer Support: Salesforce Service Cloud enables Adidas to offer comprehensive
customer support through various channels such as email, social media, and mobile apps.
This integration supports a seamless and personalized service experience.
- Service Efficiency:By automating service processes and using data-driven insights, Adidas
improves response times and overall service quality, contributing to enhanced customer
satisfaction.
​ Technology Development
- Digital Tools and Innovation:Adidas invests in technology to support its product
development, marketing, and customer engagement initiatives. Salesforce tools play a critical
role in providing insights and managing customer relationships effectively.
- Mobile App: The development of a mobile app with personalized features and integration
with payment systems enhances customer convenience and engagement.
2. What is Adidas’s Business Strategy? What is the Role of Customer Relationship
Management (CRM) in That Strategy?
2.1 Business Strategy:
Adidas’s business strategy focuses on differentiating itself through high-quality products and
exceptional customer experiences rather than competing on price. The company emphasizes
innovation, brand strength, and digital transformation.
- Innovation: Adidas invests in technology and product innovation to stay ahead of
competitors and meet changing consumer preferences.
- Brand Strength: Leveraging its strong brand identity, Adidas focuses on maintaining a
premium perception and emotional connection with customers.
“Adidas is a leader in digital and online marketing.”
“Customers are clearly at the center of Adidas’s business, and their experience with other
online retailers such as Amazon has made them want a relationship with Adidas that is more
personal.”
- Digital Transformation: Adidas has embraced digital channels as the core of its business
model. The transition from traditional brick-and-mortar stores to a digital-first approach is
central to its strategy. The Adidas website and mobile app are crucial platforms for customer
engagement and sales.
2.2 Role of CRM:
CRM is central to Adidas’s strategy by:
- Personalization:Providing tailored experiences based on customer data, enhancing
satisfaction and loyalty.
“Salesforce CRM tools make it possible for Adidas to have a single view of each customer
across all the various channels through which that person interacts with the company.”
- Customer Insights: Analyzing customer interactions and preferences to refine marketing
strategies and product offerings.
“Salesforce.com helps Adidas identify key customer segments, develop closer ties to
customers, and design differentiated experiences tailored to each customer's needs.”
- Unified Experience: Integrating customer data across sales, marketing, and service channels
to offer a seamless experience.
“The Marketing Cloud is connected to Salesforce.com’s Sales Cloud and Service Cloud to
provide a unified experience and prevent customers from being contacted separately by
representatives from sales, marketing, and service groups.”
- Efficiency: Automating processes and improving response times in customer service,
leading to better customer relationships and increased retention.
“Service Cloud can ‘listen’ and respond to customers across a variety of social platforms and
automatically route cases to the appropriate agent.”
3. How Do Information Systems Support Adidas’s Strategy?
Information systems, particularly Salesforce tools, support Adidas’s strategy in several ways:

Salesforce Marketing Cloud:

​ Campaign Management and Personalization: The Marketing Cloud enables

Adidas to create and manage personalized marketing campaigns, utilizing data
to target customers more effectively.

​ Example: “Salesforce Marketing Cloud is a CRM platform that allows

marketers to create and manage marketing relationships and campaigns
with customers.”

​ Predictive Analytics: CRM systems use predictive analytics to optimize

marketing strategies, such as selecting the best communication channels for
different messages.

​ Example: “The software includes predictive analytics to help make

decisions such as, for example, what channel would be preferable for a
given message.”

Data Management Platform (DMP):

 ​ Behavioral Data Capture: The DMP captures and analyzes customer behavior
across digital channels, providing insights that help Adidas improve product
offerings and marketing strategies.

​ Example: “Adidas is also using the Salesforce DMP data management

platform to capture online and web behavior from digital actions across
all channels and devices.”

Salesforce Service Cloud:

​ Automated Service Processes: Service Cloud automates service processes and

streamlines workflows, improving the efficiency of customer service
operations.

​ Example: “Companies using Service Cloud can automate service

processes, streamlining workflows, and locate key articles, topics, and
experts with information to help the company’s 1,100 customer service
agents.”

4. How did using Salesforce.com make Adidas more competitive? How did it change the
way the company ran its business?

Salesforce.com significantly bolstered Adidas's competitive edge by enabling the

company to deliver highly personalized and seamless customer experiences across multiple
channels. In a market where personalization and customer engagement are increasingly
critical, Adidas leveraged Salesforce’s CRM tools to gain deep insights into customer
behavior, preferences, and purchase history. This data-driven approach allowed Adidas to
create tailored interactions that resonated with individual customers, setting the brand apart
from competitors who may rely more heavily on pricing strategies or broad marketing efforts.

The integration of Salesforce transformed Adidas from a traditional brick-and-mortar

retailer into a digitally-driven enterprise. This shift was critical as consumer shopping habits
moved increasingly online. By utilizing Salesforce's suite of tools—such as the Marketing
Cloud, Service Cloud, and Commerce Cloud—Adidas was able to centralize its customer
data, automate and personalize marketing campaigns, and streamline customer service
processes. For example, Salesforce's predictive analytics allowed Adidas to anticipate
customer needs and preferences, enabling more effective marketing and product
recommendations. The Service Cloud's ability to handle customer inquiries across various
channels (email, social media, phone, etc.) from a single platform enhanced the efficiency
and responsiveness of Adidas's customer service operations.

Additionally, Salesforce facilitated the global expansion of Adidas's e-commerce

platform by supporting multiple languages and currencies, allowing the brand to maintain a
consistent customer experience worldwide. The shift to digital also enabled Adidas to quickly
adapt to changing market conditions and customer expectations, ensuring that the brand
remained relevant and competitive in an increasingly digital world.

5. Give an example of two business decisions that were improved by using

Salesforce.com.

​ Personalized Marketing and Customer Engagement: Adidas dramatically

improved its marketing strategies by leveraging Salesforce's Marketing Cloud, which
provides advanced tools for creating personalized customer journeys. One key
decision involved the segmentation of customers based on detailed behavioral and
demographic data. For instance, if a customer frequently browsed or purchased
running shoes, Adidas could use this information to tailor marketing efforts
specifically towards that interest. The Marketing Cloud's Journey Builder allowed
Adidas to customize communications across channels, such as email, social media,
and mobile, ensuring that each customer received relevant content that resonated with
their personal preferences. This level of personalization likely led to higher
engagement rates, increased customer loyalty, and ultimately, boosted sales.

​ Efficient and Effective Customer Service Operations: Another critical decision

that was improved by Salesforce.com was the optimization of Adidas’s customer
service processes. By implementing Salesforce's Service Cloud, Adidas was able to
automate many routine service tasks, such as case routing and customer query
handling. This automation meant that customer inquiries could be resolved more
quickly and accurately, without the need for excessive manual intervention.
Furthermore, the Service Cloud provided customer service agents with access to a
comprehensive view of each customer’s history and interactions with the brand,
allowing for more informed and personalized responses. For example, if a customer
contacted Adidas about a product issue, the agent could instantly view the customer’s
purchase history and previous interactions, making it easier to resolve the issue
efficiently. This not only improved customer satisfaction but also reduced operational
costs and response times, making the service experience smoother and more reliable
for customers.