- March 30, 2022
Adidas CEO Kasper Rorsted was the most recent guest of honor in the Thought Leader Series at the University of South Florida Muma College of Business. Normally based at the shoe and clothing giant’s headquarters in Germany, Rorsted, a Danish national, chose Tampa for his first U.S. trip since the start of the pandemic.
The 60-year-old Rorsted took an unusual path to his leadership position at one of the world’s preeminent sports brands. Prior to 2016, when he joined Adidas, he spent most of his career with IT companies such as Compaq, Hewlett-Packard and Oracle. A graduate of Harvard Business School and Denmark’s Copenhagen Business College, he also serves on the board of food and beverage conglomerate Nestlé.
Rorsted’s March 31 talk at USF touched on a wide variety of topics, ranging from work-life balance and sustainability to marketing, competition and the transformative effects of e-commerce and direct-to-consumer sales. Edited excerpts:
MARKETING: A key to Adidas becoming one of the world’s most successful clothing brands, Rorsted says, was its decision, early on, to sponsor top athletes such as boxer Muhammad Ali, track-and-field star Jesse Owens and tennis great Stan Smith — legends who transcended their sports and became cultural icons.
“We are so happy that sport is back,” Rorsted says, adding that sports and athletes are the company’s ideal marketing vehicle, better than any advertisement. Of the world’s top 10 soccer (futbol) clubs, half of them have deals with Adidas.
“Sports … are the events where brands are exposed and consumer engagement takes place,” he says. “So, the platform we used as a brand vehicle was taken away” during the pandemic.
E-COMMERCE: Consumers’ embrace of online shopping has required a massive reinvestment and reallocation of resources at Adidas, says Rorsted. Nearly 50% of the company’s sales are now direct-to-consumer, and at the current pace, e-commerce will account for the U.S. equivalent of $877 billion to $987 billion in Adidas revenue by 2025.
To put that in perspective, Adidas, on an average day, processes between 25,000 and 30,000 online orders per minute.
‘Competitors exist because consumers want choice. I think we can learn from everybody, all the time, so I don’t think competition is bad.’ Kasper Rorsted, CEO of Adidas
“We are one of the biggest customers of Salesforce in the world,” Rorsted says. “But at the end of the day, we sell shoes, we sell T-shirts; we are not a digital company. We’re spending enormous amounts of energy and time and resources in building the best possible digital infrastructure so that any innovation is loaded with what the company is about.”
That’s not to say, however, that brick-and-mortar retail is doomed. Rorsted says consumers should expect to see more high-end, company-owned retail outlets, what he calls “monogrammed stores,” and a decline in independent, mom-and-pop shops that carry shoes and athletic gear from a wide variety of brands.
SUSTAINABILITY: Adidas, Rorsted says, has set a goal of making sure that nine of the 10 raw materials it uses to make shoes will be gleaned from recycled sources by 2025. The challenge? Trying to figure out how to achieve it without significant price increases for the end user.
“The consumer wants this but will not pay more and will not compromise on performance,” he says. “That puts a huge burden on us. But you can turn it around and say it’s also a huge opportunity for the companies that have the resources to make sure that innovation takes place.”
COMPETITION: From an outsider’s perspective, competitive battles among Adidas, Nike, Puma, Reebok and other top athletic wear brands appear relentlessly fierce, with billions of dollars at stake when a top pro team or collegiate program (USF’s athletic teams are sponsored by Adidas) switches its allegiance. But Rorsted has nothing but kind words for rivals.
“Competitors exist because consumers want choice,” he says. “I think we can learn from everybody, all the time, so I don’t think competition is bad.”
THE WAR IN UKRAINE: Rorsted guided Adidas through one crisis with the pandemic, but now another one — Russia’s invasion of Ukraine — has disrupted business. Between the two countries, Adidas has dozens of stores and around 7,000 employees, and now it has to find a way to take care of them, regardless of what country they are in.
That stance might come off as controversial, Rorsted says, considering how the Western world has lined up against Vladimir Putin, but economic sanctions have also punished everyday, working-class Russians. It’s a testament to how business leaders must think through a long-term, big-picture lens — rather than simply react to headlines.
“We can see everything that’s going on,” he says. “But I also believe that we can't just walk out on employees and say it didn't happen. We have a big obligation to the people who are suffering.”
WORK-LIFE BALANCE: Rorsted freely admits he “doesn’t have a lot of work-life balance … I’m not very good at that.” But he offers a different take on the subject, saying, in essence, that it’s pointless to try to have one’s cake and eat it, too.
Instead, Rorsted chooses to focus on two things and two things only: work and family (he’s married with four children). He won’t take business trips or go to movies, restaurants or football games unless his wife and/or kids can come along.
“I don't see the family much Monday through Friday,” he says. “But I'm not complaining; I love my job.”