Reebok 2006 Annual Report Download - page 108

Group Management Report ›
Industry Opportunities
Fast-Growing Women’s Segment
The women’s sports market is the fastest-growing seg-
ment in the sporting goods industry with women accounting
for more than half of total spending on athletic footwear. In
addition, women also make approximately 80% of the buying
decisions for sports apparel for men, women and children.
Reebok already has a high recognition with the female con-
sumer, with a market-leading position in aerobic footwear.
Similarly, the adidas brand has built strong recognition in
two of the most lucrative women’s sports segments, namely
sport-specific performance products and designer fashion
products through our collaborations with Stella McCartney
and Yohji Yamamoto, respectively. TaylorMade-adidas Golf is
also benefiting from higher participation rates by women in
golf, launching several products featuring lighter weights and
shorter shafts targeted specifically at female golfers. To har-
vest future growth potential in this segment, the focus of all
our brands is to extend and broaden our product offering to
meet the needs of the women’s market which is characteris-
tically driven by individuality, authenticity and style.
Increasing Focus on Kids
The kids’ segment has also been identified as a key focus for
the Group in the medium term. Our kids’ business has expe-
rienced strong growth in recent years, but there is still fur-
ther opportunity to expand our market presence, especially
in the North American and Asian markets. We currently offer
a wider selection of products than ever before to address
the specific needs of children. In the past year, adidas and
Reebok have partnered with premier toy and entertainment
companies such as Mattel and Hasbro in an effort to create
innovative product collections for our younger consumers. We
are also investing more at the grass roots level to capture a
larger share of the kids’ market and to help create a strong
association between our brands and sports at an early age.
Kids represent an important current and future target group
for many sports categories. As a result, we will continue to
focus on and invest in this critical segment of the business.
Building Market Share in High-Growth Sports Categories
Expanding in emerging categories where our brands have
been under-represented is another source of growth we
seek to exploit as our brands evolve. Skate, sport fusion
and outdoor are all rapidly-growing categories, where we
are increasing our efforts. Skateboarding footwear was the
fastest-growing category in the United States in 2006 and is
now the fifth largest. Sport fusion, where fashion and lifestyle
footwear and apparel derive their characteristics from sport-
specific features, continues to evolve, with new inspiration
coming from categories such as gym, yoga and martial arts.
Outdoor activities such as Nordic walking, hiking, free run-
ning and trail running are also high-growth sports catego-
ries. Our market share in each of these segments is below
10%, providing significant potential going forward. Over the
next three years, we intend to launch several new initiatives
in these categories, utilizing the full power and capability of
our development and design teams.
Running Category To Grow Further
Running continues to be extremely popular, but running
demographics are changing, with high growth rates among
both female and older athletes. People are now taking up
running for varied purposes, from weight loss and stress
reduction to participating in competitive runs. Participation
rates in running are expected to grow further and as we are
under-represented in this category, we see significant growth
potential. As we look to the future, the demand for functional
footwear and apparel is expected to increase overproportion-
ately in what is already sport’s largest product category. We
believe we can outperform market growth and increase our
market share through a strong innovation pipeline. With our
multi-brand approach, we will be able to address the run-
ning market in a more meaningful way, tailoring each brand’s
proposition to more effectively target the diverse consumer
base.
Technology to Drive Growth of Customized Products
We expect the market for customized footwear, apparel and
hardware to grow strongly in the coming years. Consumers
are increasingly looking for products that more precisely
meet their individual needs and go beyond just aesthetic
appearance. adidas, Reebok and TaylorMade all offer different
customization platforms reflecting the respective brand’s
strategy. Two examples for how we are attacking this oppor-
tunity are the introduction of adidas_1 and the adidas “mi
Innovation Center”. With the launch of the first “intelligent”
products such as the adidas_1 running and basketball shoes
in 2005 and 2006, respectively, we established the adidas
brand as the pioneer when it comes to customized foot-
wear technologies. In 2006, we introduced the first-of-a-kind
interactive retail concept, the adidas “mi Innovation Center”.
Utilizing advanced technology, we can deliver footwear prod-
uct incorporating our top innovations based on the personal fit
and performance needs of individual consumers. We believe
the “mi Innovation Center” offers a new shopping experience
for consumers and thus we plan to open additional centers
around the world over the next few years. Going forward, we
will continuously strive to extend our customization initiatives
across all brands to further develop this emerging market.
› Opportunities Report
104 ANNUAL REPORT 2006 › adidas Group ›