As soon as you walk into the spacious offices of adidas Japan KK, atop a skyscraper in Tokyo’s Minato Ward, you feel like you should change your clothes, put on some sportswear and running shoes. Staff are buzzing around the office, clad in soccer shirts, looking very laid back as they go about their business. That’s the world the German sportswear maker draws you into. They have their own cafe on the rooftop, as well as showers and changing rooms for the early morning yoga and workout sessions while looking over spectacular views of Tokyo.
These are exciting times for adidas in Japan, especially with the Rugby World Cup in 2019 and the 2020 Tokyo Olympics on the horizon. For the upcoming soccer World Cup, Japan’s national team has a brand new jersey called “Kachi-Iro” (victory color). Indigo dyeing gave birth to this concept which was used for kimonos worn by samurai warriors under their full armor.
In another first for adidas in Japan, last October, it opened the brand’s first-ever domestic footwear development facility in Kobe. The ”adidas footwear lab” features the world’s most advanced measuring/testing devices and high spec shoe-making equipment. The site has been specifically designed to develop next-generation footwear products and customize footwear for professional athletes.
Overseeing adidas Japan operations as well as the Reebok brand is Paul Hardisty. Originally from Melbourne, Hardisty joined adidas in 1999 when he went to Indonesia. He spent five years there, followed by a brief stint in India, and then South Korea, where he was from 2004 until 2010. He took up his current assignment in Japan in January 2010.
Japan Today catches up with Hardisty to hear more.
2017 was fantastic, another record year for us in Japan & globally. We’ve had solid growth in Japan since 2010. Over this period we have divested away from other brands in our portfolio to allow us to focus on our core business.
What are your main brands?
Within brand adidas we have Sports Performance (the badge of sport) and the Originals street/fashion wear inspired by our sporting history. Key international collaborations include Y-3, designed by Yohei Yamamoto, and adidas by Stella McCartney. We also have the brand Five Ten within adidas Outdoor and not to forget our Fitness brand, Reebok which also has many collaborations of its own.
We divested from TaylorMade Golf, Rockport and the CCM hockey and cycling brands during 2017.
How many stores do you have in Japan?
Right now, we have 93 stores. We are continually streamlining our retail operations because shopping zones in any country shift over time. We might have one location that was hot three years ago but it no longer is. Shinsaibashi in Osaka is a great example. It was massive and then the traffic started to move to the other end of the street. So we closed that store and opened up a really cool modern version of that closed store down the street. Sometimes we close a big store and make it smaller. Sometimes we make a small store bigger. We have about six stores in progress now and we are always looking at where the new hot spots will be.
How many staff do you have?
Around 2,300. The majority are retail staff.
Is adidas a popular company to work for?
I think so. We get a lot of job applications but as you know, there is a lot of competition out there, so we work on being “a great place to work.” Employer branding is also important to attract the best people.
How would you describe the image of adidas among consumers?
We want to be the best sports company in the world and by best we mean to design, build and sell the best sports (adidas & Reebok) products with the best service and experience in a sustainable way. We are selling a lifestyle. Our core philosophy is to enhance the life of the athlete or consumer. And that is reflected in our marketing. A product campaign may focus on a specific story or a sport to create a bond with consumers. The “Kachi-Iro” concept for the Japanese national soccer team jersey is a good example of that.
How is your e-commerce business?
It has grown exponentially. It’s a channel we must be in because digital reaches more people and it’s where they shop. If you are not digital, you won’t survive.
Obviously, footwear is your core product. Besides that, how is the apparel business doing?
I would say footwear would be 80% bigger (as a share of our business) than six-seven years ago. We still design and develop apparel in Japan for the specifics of the Japanese consumer which, to be honest, is in high demand by the in-bound tourists.
How much autonomy from head office do you have?
A certain degree. However, as an international brand, you want consumers to travel the world and see adidas as adidas. Tokyo is one of our six global key cities. So we are a big player and are included in global campaigns. For example, if adidas is doing a football campaign, Japan international player Shinji Kagawa is going to be included in that campaign.
With our own creation center, we can develop stories and ranges not only for the Japanese market but they can also be exported and we have successfully done that. Japan is a massive focus for innovation, fabrics and design.
How frequent are product cycles?
They are less than in the past. Still, consumers like new looks and brand stories. This year we are moving to a quarterly selling season from a half year seasonal cycle. It will make our product portfolio more balanced and fresh.
What is your customer demographics?
Our core target are teenagers into their early 20s but we still have a good base of loyal customers from the 1970s and 1980s who still love our brand. Depending on the product or target will determine the medium for marketing. Brand campaigns are for all to enjoy.
In the past, foreigners living in Japan have complained they can’t get shoes in their size.
You can get big sizes in adidas, although the size curve (volume) drops off at the larger end. You can go to the miadidas site (https://shop.adidas.jp/miadidas/) and build your own shoe in the style and color you like. Of course, some people like to try on a shoe in the shop first rather than buy online, so we do get returns. In Europe, the return rate is high but here it is single digit. New technology is being developed on ways to make fitting more accurate. We need that type of technology. It saves companies money, time and effort and more importantly helps consumer have a better experience.
How do you get feedback from customers?
Retail staff are our best brand ambassadors — they are the face of the brand. We have different social media connections, including a fully dedicated newsroom connected to Facebook, Instagram, Twitter 24 hours a day. We have communities within different SNS. The adidas Runners of Tokyo have created their own community. Overall, the feedback is constructive, positive, with suggestions on ways to improve and, of course, some complaints which we value as these make us better.
How often do you visit stores?
Quite often, usually on weekends. I like to observe how the staff interact with customers. My friends also give me good feedback on stores.
You must be busy with this year’s football World Cup, the 2019 Rugby World Cup and 2020 Olympics.
adidas have partnered/sponsored the Japan football team for many years and for this year’s World Cup, we will supply the jersey & kits for the Japan team. With rugby, we supply all the kit for the All Blacks. We try to activate our sponsored teams and athletes as often as possible. We did a rugby event at Yokohama for kids and another one to meet with consumers in our Shinjuku store. Sonny Bill Williams was there. All Blacks are often doing these events with us when they are in town. As the 2020 Tokyo Olympics approach, we will set up a local Olympic task force team to manage all marketing activities throughout the event.
What CSR (corporate social responsibility) activities does adidas do in Japan?
We do a lot. We have always been a big contributor back to society. In fact, we have just employed a full-time head of CSR because we want to take it to a different level. My personal passion is to do more. We have been helping in Tohoku since the 2011 disaster when we sent 500 million yen worth of jackets and products there within days as it was extremely cold at that time. We do a lot in Rikuzentakata (Iwate Prefecture). Our staff go up there doing events with kids. Some of the children have had a chance to visit our head office in Germany & periodically drop by our office in Tokyo to say hello. We also support the organization Shine On! Kids and contribute to various other events.
What areas of the business are you hands on?
I’m more of an operational and finance guy, whereas I tend to leave the marketing side to my team. I’ve got great people and they know what they are doing.
How is the work-life balance at adidas Japan?
I have to admit that it’s a never-ending battle and we are continually looking at this issue. Meetings are probably the biggest cause of long days. But I think we are getting better. I come in about 7:50 a.m. and try to leave about 6 p.m., although I do go to a lot of business dinners and events.
What sports are you into?
I do a bit of boxing and go to the gym.
How many pairs of adidas shoes do you have at home?
Not as many as you might think. I’ve probably got about 30 pairs. If I find something I love, I keep them and wear them often. My marketing team often complain as I am not wearing the latest product.