Over the next two years, Adidas will increase its investment in digital in an effort to more than double its Ecommerce sales. CEO Kasper Rorsted, who took over the reigns in 2016, has increased Adidas' capital expenditure by close to 40% and has budgeted most of this year's €900m towards digital operations. Online sales last year rose to €1.4bn (up 57%) and revenue lifted by 16% to €21.2bn. Adidas has revealed that they will begin to close some of its physical stores as its continues to shift its focus online with Mr Rorsted explaining that the Adidas "online store is the most important store we have in the world."
Its efforts to lift digital sales have been boosted by connections with fellow German group Zalando and the limited release of a mobile app that offered users a high degree of personalization. Going forward, Adidas will continue to roll out the smartphone app to other international markets and aims to hire around 200 employees focused specifically on digital by 2020.
Mr Rorsted expects the that over the course of the next year, the "absolute spread [between offline and online sales] will increase," and that although the number of stores they operate will contract, Adidas will focus on making the remaining stores better. These increases in online revenue are expected to also lift profit margins as online is a higher-margin distribution channel than traditional offline retail. Mr Rorsted intends to boost sales 10-12 % per year by 2020 and the company has forecasted net profits to increase 20-24 percent per year until 2020. The Adidas chief also expects the full effects of their increased investment in digital to only be felt post 2020 as expenditure levels rise in the short term.
Adidas currently has around 2,500 stores located around the world and 13,000 mono-branded, franchise locations.
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