It seems peculiar for a man who fell in love with golf as a kid and then spent his life on the business side of the sport, but new Adidas North America President Mark King is a speed demon. Speed from concept to design; swiftness from design board to product model; quickness from model to production; and haste from factory to retail.
King, who rose from a salesman to president and CEO in more than 30 years at TaylorMade/Adidas Golf, just completed his fifth month running Adidas North America, where it’s been lean times lately.
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Mark King took over at Adidas North America 5 months ago.
Photo by: ADIDAS |
In late July, just weeks after a FIFA World Cup in which it sponsored both teams in the championship game, Adidas warned investors that it would miss profit targets. Domestically, rival Under Armour surpassed Adidas earlier this year for the first time as America’s No. 2 athletic apparel and footwear brand, behind Nike. Most of Adidas’ market-share loss of 23 percent was gobbled by Under Armour, which saw a domestic sales gain of 20 percent during the same time.
It’s long been a market of Nike and everybody else in the U.S. Now it’s safe to say that if Adidas is to return to relevance in the U.S., it must do so schnell — before Under Armour has its first footwear hit.
That’s where speed comes back into the picture. While King is still formulating the company’s new North American blueprint, acceleration is the new watchword.
“Our biggest challenge right now is to take a global soccer brand and make it authentic to U.S. sports,” said King, who saw TaylorMade’s sales grow from $349 million when he became CEO in 1999 to more than $1.7 billion last year. “We’re talking a lot about speeding up the process, to become more reactive in the marketplace. We have to get faster.”
A telling anecdote came from Barry Hyde, former marketing chief for the U.S. Golf Association and MasterCard International. In 2009, E-Trade cast its trading baby in a Super Bowl spot set in a golf club locker room. The script required the trading tot to wear a golf visor. Eager to get golf exposure in the Super Bowl, Hyde supplied E-Trade CMO Nick Utton with contact information for the heads of the top equipment manufacturers. Speed was the telling factor. Utton had emailed the top three golf manufacturers with the outlines of a possible deal. King returned the email in 4 1/2 minutes. The branded visor was front and center in one of the most acclaimed ads of Super Bowl XLIII.
“Mark believes in massive change at incredible speed,” said Sean Toulon, TaylorMade executive vice president of product creation, who worked with King for 30 years and lives on the same street in Vista, Calif., separated by one house. “Mark can be a tough guy to work for because of that. He’d say something to me and I’d go home swearing, but you’d start thinking about it and he was always dead on.”
“Golf is not necessarily a sport that’s fast-moving, but Mark is,” said Hyde, now executive vice president of golf at Wasserman Media Group. “He just won’t be tied to tradition for tradition’s sake.”
One example of that is the “Hack Golf” concept that King has proposed, a version of the game in which the holes are 15 inches in diameter — nearly four times their usual size.
“In a game that’s very conservative, Mark spoke his mind,” said former Sports Illustrated Group President Mark Ford, now executive vice president, global advertising, for Time Inc. “He’s really impatient and he wants to move quickly.”
Ailing Adidas
King is a scratch golfer, but he’ll be hitting into the wind in his new job. Adidas’ difficulties in the U.S. are manifested across product and marketing.
Product is an area that’s easiest to control, so “if we are going to do one thing, I would say let’s do [new] product,” said King, who championed introduction of TaylorMade’s white drivers, which went from a curiosity in 2011 to a runaway success. “If you had better product in golf, you won,” said King, whose dramatic acceleration of product introductions at TaylorMade was echoed across the golf industry. “I still believe that core consumer is ultimately won or lost there. Then, obviously, the better marketing you put around it, the bigger platform you can have.”
“We can do better at fewer things. We want to focus on what defines us most as a brand. That would be soccer, running, basketball and Originals [retro].”
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“If you look at market share, we’re very relevant in soccer and not very relevant in any other category.” — Mark King
Photo by: ADIDAS |
Many sportswear brands have significant retro businesses. What does it say that Adidas’ biggest U.S. footwear category is its Originals retro line? When asked about a new marketing approach, King said, “I’m not a big believer in brands that rely on their heritage.”
Whether that statement applies to product is an intriguing question.
With so many SKUs, focus is often difficult for sportswear brands. Those who have worked with King say that’s one of his strengths. “Mark narrows the big issues down to one or two things and then he’s on them like a rat on a Cheeto,” Toulon said.
So far, the primary issues King sees for Adidas in North America are crafting new approaches to help restore a battered brand image and a need to seed Adidas product across the American sports landscape.
“We have big schools, like Michigan, UCLA, Texas A&M, but there are a lot of colleges that buy equipment and we have to be just a lot more aggressive to get colleges, high schools and clubs in our gear — that’s a major emphasis,” he said. “So I would say both grassroots and a brand campaign would be where we would spend some money.”
As Adidas tries to recast itself, King is one of a number of recent top appointments. Eric Liedtke was named global head of brands in January. Before that, Roland Auschel was tapped to lead global sales.
Even with its recent problems, Adidas has not been reluctant to spend on marketing. It outbid Nike to take Manchester United kit rights for $1.3 billion over 10 years. Earlier this year, Adidas signed top NBA draft pick Andrew Wiggins, the first overall No. 1 the company has signed since Derrick Rose six years prior.
Still, even with an unlimited checkbook, selling Adidas won’t be easy, especially at college basketball powerhouses. “If a coach has to worry about kids coming to his program because his team doesn’t wear Nike, they just won’t do it,” said an athletic shoe marketer with more than 25 years of industry experience.
Adidas’ heritage includes Jesse Owens winning four gold medals in their shoes during the 1936 Olympics. More recently, the brand has lost relevance in America and sales have followed downward.
Adidas is still the No. 2 athletic footwear brand in the U.S., but it’s a distant second, around 6 percent to the 60 percent combined share of Nike and Nike’s Jordan brand. In basketball, the disparity is larger. Nike and Jordan Brand combine for around 95 percent of the U.S. basketball shoe market. With Adidas holding NBA uniform rights since 2006, you might expect more of a connection. King insists the ingredients have been there, but the execution has not.
“Basketball is an example of where we can wake up 24 months from now and see really significant growth,” he said, adding that the brand’s central technology story will continue to be the Boost cushioning platform. “We have great product. We have great athletes and we have a great brand. Where we fall down is that we don’t invest in a lot of advertising during the basketball season. Not just on the NBA but during March Madness, at high schools in key markets. We don’t have as robust a grassroots program at the club level. So, that’s where we break down.”
Not very relevant
No retailer likes being overly dependent on any brand.
“Retailers are dying for an alternative to Nike, but so far, the consumer is really not voting that way,” said Matt Powell, footwear analyst at Princeton Retail Analysis. “Adidas is still generally perceived as a quality brand, but in my mind they just haven’t had the right product for the American market.”
Stu Crystal, the former MLS licensing chief, said retailers still respect the Adidas brand, though they’d like to see it better defined to the core teen consumer.
“Adidas still has a reputation for quality,” said Crystal, a former Adidas employee who’s now an independent consultant. “The key for them here will be finding a combination of the right athletes, the right promotions and the right products.”
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King saw TaylorMade/Adidas Golf’s sales grow to more than $1.7B last year, and in 2009, he moved swiftly to outfit the E-Trade baby for a popular Super Bowl ad (below).
Photo by: ADIDAS |
Said King, “If you look at market share, we’re very relevant in soccer and not very relevant in any other category. We’re very much alive, but we’re really not relevant. So my belief is that we need to increase our share in soccer, to even make a more clear leadership position, and then take one category at a time.”
Traditionally, the head of Adidas North America has had little influence within Adidas’ Herzogenaurach, Germany, headquarters. But with all his success at TaylorMade/Adidas
Golf, King is different: He has influence within the company.
“Mark’s overall approach to business and the market is something very different than what has existed at Adidas,” said a senior league licensing executive, who requested anonymity. “His energy is something that group of Adidas employees in Portland is looking forward to, and he has good relationships with big retailers based on his success in golf.”
The question is whether that will translate into the funding and leeway he’ll need to get the brand more in tune with its intended consumers, with the appropriate athletes and the right marketing campaign.
Reconnecting the brand with Americans is paramount. “We have to Americanize how we go to market,” King says.
What will that approach look like? During a September visit to New York, King said the creative brief was still a blank sheet. “It’s a big debate right now,” he said. “Today’s consumer is about ‘What do you have for me today that’s interesting? Tell me about why I should be emotionally connected to your brand today.’”
The fashion vs. performance dilemma is always bewildering to sportswear marketers. At Nike, they once called fashion “the F word,” before coming to terms with the somewhat unsettling fact that eight of 10 pairs of athletic shoes aren’t bought for athletics. King is trying to find the appropriate mix. During Adidas’ last big run-up in America, Run-DMC was a bigger part of it than any stateside athlete.
“Our brand, maybe more than any, is really a great mixture of sports performance and culture,” said King, noting that music and pop culture are more broadly influential on Adidas’ core teen consumers than athletes and athletics. “How do we mix those so that you’re not a fashion brand, you’re a sports brand? As long as the fashion is inspired by sport, it’s a place we’d like to be.”
This month, King is going to Germany with other Adidas executives to discuss what the company calls “brand leadership.” How that will manifest itself in this market will have a lot to do with determining whether Under Armour has surpassed Adidas here permanently.
“I’ve spent my first months listening to leagues, teams, athletes, retailers — trying to get a sense of how we can differentiate,” King said. “Now I really believe we can succeed by focusing on U.S. sports, by talking more consistently to consumers and in a voice they want to hear — not a global voice, not a soccer voice, but a voice that an American 18-year-old athlete can relate to. That’s what we’re in search of.”
