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Great minds think alike—even fierce competitors.

This is especially true in apparel retail, where longtime rivals Nike and Adidas have both recently invested heavily in digital transformation and innovation to stay at the top of their game.

Competition between the two brands is long-standing, so it makes sense it would extend to their digital transformation efforts. But who will win in this race—and, more importantly, what can other brands learn from these retail industry leaders?

Adidas: Putting consumers first and "failing fast"

Adidas’ use of extensive consumer research is a significant part of its digital transformation investment, according to an article in Harvard Business Review. But the apparel retail brand also realized it needed to develop new and efficient ways of working so it could build better experiences and products even faster. That meant creating the right environment for its teams.

Just as important was how those teams were organized. Adidas has brought together its brand, media and digital teams so they’re all focused on creating a better consumer experience. By putting customers first, Adidas has made consumer insights the starting point for creating new processes and models of working. This has accelerated the brand’s ability to bring new capabilities to market.

Its new Adidas app can be viewed as a culmination of its consumer-centric model and demonstrates how the role of digital is one of its core strategic priorities. The company takes advantage of extensive consumer testing during the many iterations of app development.

But more significantly, it didn’t wait until it was fully completed before launching it in the U.S. Getting feedback before every feature and capability were fleshed out was an important contributor—it was worth getting things wrong at first because what consumers shared back provided direction on how to shape both the app and the customer experience.

"We’re using technology to enable our end-to-end business to create the best experience for our consumers."

“We’re using data to better understand our consumer and their wants and needs,” Joseph Godsey, Global Head of Digital Brand Commerce at Adidas, told Harvard Business Review. “We’re using technology to enable our end-to-end business to create the best experience for our consumers—and ultimately build a relationship we can grow in the long term.”

Adidas’ “fail fast” mentality is also about building trust. By valuing the trust of its customers, it can test a lot of things quickly to figure out what works and what doesn’t and focus only a few things it can do better rather than worrying about making everything perfect. Global director of digital and retail marketing Swave Szymczyk recently told Marketing Week this means admitting mistakes, too. Most of all, it’s about having a personal relationship with the consumer and “knowing enough about them to be relevant to whatever relationship they want to have with us.”

Nike: Making apparel retail personal

Adidas’ efforts to personalize its customer relationships reflect the reality that today’s brands must be relevant, useful, and entertaining—including apparel retail brands. That’s why it makes sense that Nike would run down a similar path.

It too has focused on introducing brand experiences with several initiatives, so it can build relationships with a broader array of consumers, not just sell product. For example, through Nike Plus consumers can interact with the brand, even when they’re not buying a Nike product, through health tracking and workout instructions.

Until last year, Nike mainly saw itself as a wholesaler creating product for various retail partners. But apps such as Nike Plus mean the company’s customers no longer just carry out transactions with the apparel retail brand. Rather, customers form relationships that provide the company with insight that enables it to expand and enhance the customer experience.

Like Adidas, there is an element of trust in these modern customer-centric models. The Nike Plus app gives the brand access to personal health information so it can help the consumer become more active and it meet their fitness goals—the customer is putting their trust in Nike. Nike uses these interactions and the data they generate to better understand the needs and lifestyles of its consumers.

Nike also recognizes it can build relationships through multiple channels. Last summer, it embarked on a journey to transform how it reaches customers. Although it still works with about 30,000 retailers globally, it’s focusing on particular apparel retail relationships, such as Foot Locker and Nordstrom.

It’s also prioritizing direct-to-consumer sales. In addition to Nike Plus, its Snkrs app offers limited product drops to a small group of customers. While not a big contributor to the company’s bottom line, the so-called “sneakerheads” are highly coveted customers—and Nike’s most obsessed—which makes them a valuable source of customer insight that can drive innovation.

Customer insight is the engine of digital transformation

When two competitors in the apparel retail space take the same tact to drive innovation, they must be on to something. Both Adidas and Nike are fueling their digital transformation by failing fast and learning from those failures. More importantly, these companies use data and ongoing shopper insight to develop products and services that provide real value to customers.

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Kelvin Claveria

Kelvin Claveria was the former Content Marketing Manager and was responsible for Vision Critical's blog and social media marketing program. Before joining Vision Critical's global marketing team, Kelvin worked at Dunn PR, a Vancouver-based public relations firm. His experience includes working with lifestyle, real estate, and non-profit clients to develop social media marketing and PR strategies. Kelvin has a Bachelor of Business Administration from SFU's Beedie School of Business.
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