Beyond Conversion: Creating Delightful Experiences that Align your Brand with Customer Goals

Niall O’Kelly at UXDX EMEA. Video: https://www.youtube.com/watch?v=OPgFE7MIkXo

Readable transcript: edited from the recording's captions for readability (fillers and false starts removed, punctuation and section headings added). Wording is the speaker's own. Timestamps are positions in the video. Names marked [?] could not be verified against the audio.

Back in Dublin, and what adidas is for

[00:00:00] Hello everyone, thank you for joining. I'm Niall, and it's great to be back in Dublin. I live in Amsterdam, where our digital headquarters are located. I want to talk to you a little bit about how we think about sports, how we think about our consumers and their experiences, and more importantly, how we're really trying to figure out together how to bring that experience to life on a global scale, for all the different consumers that we have around the world.

[00:00:27] It's really nice to be back in Dublin. I actually grew up in Limerick, outside the city, in a little village called Patrickswell. It's really interesting when you think about how I might have imagined myself standing here on stage today. Not only working for a brand like adidas, but also having the opportunity and the honor to represent such a company, is truly a privilege, because it is truly a very special brand.

[00:00:53] For over 70 years we have been known around the world as truly beloved for our cultural impact. We're part of special moments in people's lives. We collaborate with amazing artists who truly inspire us with new ideas in terms of creativity, innovation, and rethinking our products and experiences. But our heart is truly in sports. That's where adidas started, in 1949, making running shoes and expanding into football and all the other categories we've developed over the years.

[00:01:25] This is truly not just the past or the present of our brand, but also our future. We need to refine that DNA and make sure we are thought of not just in terms of style and our impact on culture, but also in terms of how we can empower people to play sports. And this is the basis of our current strategy.

Own the Game and the shift to direct-to-consumer

[00:01:44] For about two years now we have been working on our growth strategy until 2025, called Own the Game. It's really about how to engage people who do sports, our consumers, in everything we do as a company. That's an amazing change for a company of our size. You may take it for granted in your company, but traditionally at adidas we have spent around 70 years producing a multitude of products in our factories around the world, packing them in big blue containers and shipping them to Decathlon, JD Sports, or Dick's in America.

[00:02:16] Now we need to think about how we can make sure that we're really building relationships with people, because the heart of the game is to reorient our company, to rethink everything we do, to become a direct-to-consumer business. Our shared goal as a company is to have the power to change lives through sports. That is a really powerful statement. For many years it may have seemed like nothing more than a marketing slogan, and maybe that's been the case for a while, but now we have the opportunity to really do that, because we have the opportunity, through the power of digital technology, to build these relationships with every person who buys our products, who plays sports with us, and who wants us to be a part of their journey of improvement from beginner to athlete.

[00:03:02] So how do we refocus on the consumer so that they are the center of our work and our attention, and how do we rethink what that means for the experiences we create? How do we regain trust in the true experts and athletes that exist throughout the company, making sure that we bring this knowledge and these methods to people through the products that we create, namely shoes, hoodies and so on, as well as the products we create that are transformed into experiences? The goal is building nearly 500 million relationships in our membership programs. We're about halfway there. We are already one of the largest membership programs in the world, bigger than Netflix.

[00:03:45] But we can't stop there. We have to move forward, because Own the Game requires us to achieve a net sales target of eight to nine billion. That's quite a lot of money. We have to make sure that we really rethink what we do. When I joined the company around 2016, the e-commerce business was around 700 million, which is also a lot of money, but quite different from an adidas with a market cap of around 60 billion. Over the years we have increased e-commerce to approximately four billion in 2020, and we've reached a saturation point where this is actually our largest store. It is bigger than any of our key partners. It's actually bigger than a lot of our competitors, and bigger than Puma or Lululemon.

[00:04:31] A lot of people might think, okay, great, we've done this. But we're still not satisfied, because we need to move forward. We haven't properly positioned ourselves to change lives through sport. We need to rethink what we do, and how we really double down on building relationships and move away from focusing just on making transactions, just on selling things, and make sure we think about lifetime value.

[00:04:59] What got us here won't get us there. We need to move away from focusing on transactions, and even on the transaction itself at the direct-to-consumer stage. Traditionally, the company completes the transaction six months early, selling to wholesalers. So that's a step forward, thinking about selling to the consumer. But now we need to think further and think, maybe we shouldn't just sell someone what they want. Maybe you came in and wanted red sneakers, and we have a bunch of them. But we have to take this moment and say, is this really what you need? We need to make sure we're focused on how we inspire people to exercise. If you want to sell running shoes, first you need someone to want to run. So let's focus on that, and make sure it's really the right sport for them.

How a marketing campaign traditionally talks to you

[00:05:47] If you think about how we've traditionally approached this, this may be familiar to you from some of the marketing campaigns in the past. Marketing campaigns tend to have a structure, and it can often start with this enticing phase, as it's called. We'll release something a little limited in information. Something is coming. It's too adaptive for this world. Maybe there will be jobs there[?]. And as a consumer you think, okay, I'm curious. I like the works. What is this about?

[00:06:18] We say, we're going to Spacemate Boost[?]. Unearthly. Look at this graph. Steeply[?]. Someone's team spent forever on this. It looks cool. And that's true, it looks great. And you think, okay, you got me. What is this about? I like this. I like the graphics. You did a good job, well done. I'm not sure if I want to go into space. I don't know if I can handle this.

[00:06:42] And we said, don't worry. We understand you. They'll be cool right here on Earth. Look at this beautiful photo. The entire lighting arrangement is perfect. You will be filming a profile with your friends. That's great. And your consumer might think, okay, that's fine. I really wanted sneakers, but that's okay. But our marketing campaign will move forward and say, no, wait. Wait. Let's bring this home. Drop the microphone. Buy it. Buy now. What else do you want to know? Let's close this. Fantasy. Let's leave it to marketing. Another award-winning campaign is available.

[00:07:18] But our poor consumer might think: well, that's a nice campaign, but really, I wanted sneakers. It doesn't really look like sneakers. I think I'll just switch to Brooks or Running[?] and see what they offer. And now our marketers are a little nervous and sweating, and they're like, wait, wait. We have other shoes. Do you want sneakers? Boom. We have a bunch of them. Which ones do you want? Do you want those? Are those? These are cool. And now our poor consumer is a little stunned and confused at this point. You may have been in that situation yourself.

[00:07:59] We need to move away from how we think about our products. While it's great that our e-commerce company has the potential to offer every product we offer, around 15,000, it doesn't really help any individual person understand what they even need. So we need to move away from our inside-out view to an outside-in view of our products, our marketing, our operations. Because in the end, people don't behave the way we want them to. They do not appear on the site on the day the campaign is launched. They don't move in the correct pattern.

[00:08:34] They actually start their journey a month or two early, trying to figure out, do I want to run or not? And then they do some research and go through this whole journey with a different set of needs and goals than we might have. Ultimately, these needs and goals will change as they progress from beginner to expert or athlete.

The journey someone actually goes on

[00:08:59] Okay, there's just a bunch of squares on the screen. Let me break this down a bit. If you dive into this journey a little bit more clearly to understand what people are doing: usually, if you take up a sport like running, you'll start from the beginning, probably on the couch, or maybe at a bar with friends, or walking in the park. I think, oh, you look good. What are you doing? I'm going for a run. This is great. And I think, oh, I could do that. I will do it.

[00:09:24] You're not going to do it right now. You'll finish your pints. But perhaps over the next day or two you might start to notice more and more content that inspires you to get moving a little. You think, yes, I can. I can do it. So you reach into the back of the closet, get out those sneakers that have been gathering dust for a while, put them on, walk out the door, and start running. And you will do it, and you will feel great.

[00:09:47] You'll do this for a few weeks and get more and more immersed in it. And you think, yes, I'm running. And you start to notice small changes in your body. You start to feel a little better in your heart. You think, yeah, everything's great. But then you hit a wall, because you were running in your Superstars or something. And as a result you injure your shins or your knees, but you don't know why.

[00:10:07] So you think, okay, I better find out. And then people dive into a little more research and figure out: okay, what do I really need to know if I'm going to run? What equipment is right for me? What techniques? The deeper you delve into this research, the better you can begin to realize: okay, maybe I don't want to run. Maybe it's not for me. Maybe I need to take up another sport.

[00:10:29] And so you might come across content that says, hey, you could go work out. Training is a sport. And you think, yeah, okay, that makes sense. Your knees won't hurt as much. This will work. And then you can even see, for example, this cool post from Karlie Kloss in this gorgeous outfit. And you think, yeah, she looks amazing, and Karlie is cool. And she is like that. I can be like her. Perfect. I bought it. Take me to this page. Let me buy these clothes. And once upon a time we would say, yes, come out here.

Starting with the right gear, not the outfit

[00:11:02] Now we need to take a step back and say, wait. Karlie is cool. The clothes are cool. But really, you need to start over. And especially for women in this example, you can see that you need to start with the most difficult workout item, the sports bra. Approximately 90% of women wear the wrong size sports bra, which creates all sorts of pain and problems that cause them to drop out of their workouts.

[00:11:28] So how do we make sure people are actually starting with the right gear for them? We can even encourage them to go into stores, get the right size. Or, if they don't have access to a store nearby, how can we replicate that experience digitally and make sure you understand what you need to think about, how you can measure yourself, and ultimately start to refine the range of bras that we have, or tights, and find a set that's right for the type of training that you want to do, high intensity, low intensity and so on, and for your own body shape.

[00:12:02] Now that you have the right set of products, you can start thinking: okay, which of these three or four actually applies to my goals and to me? So now I'm going to start consuming some information about the specifics of this product, its benefits, what exactly it was designed for, what other people are saying about it, is it really good quality or not? And then how can we make sure you get exactly the size you need? We really spend a lot of time making sure it's right.

[00:12:31] And then when you get to that specific point, we can come back and say, great, now you have a foundation. Now we can go back and see what clothes will go with this. It's not the one that Karlie has, but it's the other one that's also really cool. And you'll be ready the moment you go to the gym for the first time. Perfect.

[00:12:48] Now, having done this for a while, we can start a conversation, establishing a little trust, to say, well, maybe we can start a relationship here. Why not join our membership program? We can give you access to workouts, to our coaches, to ways to track your goals and your progress. And when you go through it a little further, you might start to think: okay, now that's great. I'm starting to be an athlete. I want to say a little thank you. I want to be part of this community.

[00:13:16] So you can join some of our global events, like Run for the Oceans, or even some local events like our local communities, workouts, runs and so on. And all this time we can think and ask, okay, how are you progressing? Have you reached this or that milestone? Is the equipment you have still suitable for this purpose, or do you need to move to the next level that is more suitable for this type of training? Perfect.

Making the touchpoints talk to each other

[00:13:40] So that's the transition from a marketing campaign to this kind of ecosystem journey over time. And as you can imagine, all of these examples are real. Unfortunately, I can't show you some of the cool things we're working on. And so you might think: well, we figured it out, right? The conversation is over.

[00:13:58] But as you know, it's often an individual experience, somewhat disconnected from each other in our own systems, and certainly disconnected from each consumer. So we need to think about how to make all of these things interact with each other, so that when someone reaches out to one touchpoint after another over time, they get this consistent dialogue, and experiences layer on top of each other.

[00:14:19] That means we need to rethink how we do business. How do we work? How do we create content? How do we build our server parts? How do we think about our supply chains? And during these conversations, it can sometimes seem like it's something like that, and maybe all the good friends in your company. But sometimes it can feel like a brand thinks about one thing and then it works for about two years, and the markets try to do something else and then another two weeks, and your distribution and logistics centers are concerned with some other aspect. So we're trying to organize everyone to focus on the key capabilities that we have to work together on, to meet those needs at the right time, so that we give her exactly the experience that she needs.

The framework we use to organize the thinking

[00:15:10] At adidas we try to work on a structure to organize ourselves and our thinking. What are we working on? What are all these different ideas? Where should they be located relative to each other? And how do we make choices and prioritize where we invest and what we focus on?

[00:15:27] It's really about just looking at different levels. Are you considering a specific feature? Are you working on a common need and trying to understand it? Are you working on some macro trends and trying to understand where we are going? And you keep asking yourself: why do we do what we do? I would urge you, if you've thought about this, please stop immediately with whatever you're working on, take a step back and say: wait, why are we doing this? It doesn't necessarily have to be a good answer, but if you know, you can choose what efforts to make and who you need to collaborate with.

[00:16:03] This may be familiar to you as Teresa Torres's opportunity trees, which have certainly influenced our thinking here greatly, but we use this as a foundation for all of our work. I'll show you a few examples in a moment. What I want to emphasize here, and what's been mentioned in conversations before, is that while it has to be very consumer-centric, it also has to consider the business objectives, and your feasibility, at every level. Again, you may not know this for sure, but you can at least be able to say, yes, we need to figure this out, and design your experiments and workflows to get these validations or insights that will give you more confidence to invest in each opportunity space or solution, as appropriate.

From opportunity space down to a KPI

[00:16:49] If we look at this a little more practically, you can see, going back to that example earlier, in this opportunity space, how you give someone the confidence to make a decision. One such area might be how to evaluate a product, and of course there are many ways to do that. In this example, the method could be to provide relevant and consistent product information. Okay, great. Again, there are a whole bunch of ways to do this. So let's name them. Let's hold some workshops to find out what we can do. What do we know?

[00:17:18] So you might be thinking: okay, we can go over the highlights of the product. You saw something similar in the example earlier with small icons. This is a way we can try to provide relevant information for this type of product. But once you get to this point, you begin to understand that it's really about breaking down the macro strategy. So, from the Own the Game level to, for example, the annual strategy, say, for our e-commerce, to the strategy for this particular product theme, and working together with all the different teams that can help you better understand each of those pieces.

[00:17:50] And then you combine that with other types of research that you'll be doing, whether it's industry benchmarks and research to understand what's going on in the market, so you understand what consumers expect and what they're used to, whether it's our own research and insights from NPS or analytics, or qualitatively, obviously, from UX research. And you start to map all of that together at the core of that framework.

[00:18:13] So you might ask, how do we map the level of results to the space of opportunities and solutions to the KPIs that we do? If we think about it, we want to ensure consistent product coverage, and we're going to do it for this segment and this type of product, and we're going to start with these markets. Okay, now we can start to understand what an appropriate amount of effort would be, based on what we expect from the business performance. Based on that, is there another category that we should focus on to have a bigger impact with the same amount of work, and then duplicate that work?

Using the same structure for a whole portfolio

[00:18:50] This example is largely based on one product development team. Our teams are organized by topic, in this case size and fit. But we also use it to organize entire areas. So this is an example of our e-commerce top-funnel sales portfolio. That's how we group all of our actions and thinking within these fundamental journey moments, aligned with an understanding of what the consumer is trying to achieve for their goals. They are trying to find the right set of products. They are trying to understand and decide which one is right for them.

[00:19:26] And why are we trying to help them with this? Because we want to win the consumer goods industry and reach eight or nine billion in net sales. But that's a very large, abstract and distant amount. So we can think: if we were to improve product search, for example, for a specific type of product in a specific area, and if we did that, we would expect someone to navigate more easily to, for example, a product detail page. Okay, we can look at what the key performance indicators are for this and understand how they relate to each other.

[00:19:55] And more importantly, we can use this to align these discussions, not just within the product, but also where we collaborate with the people who create content, the people who create the actual shoes, hoodies and other apparel. What kind of work do we need from them, and where will it be present? And what happens when we face other challenges, like earlier in the year when our supply chain was disrupted, and we have to think about changing our approach to our business focus? All of that can still carry over into those moments, and we can think about what type of information or what ways we can help find a more accessible product, and what the focus of that is at those different points in the journey, and who we need to work with within the brand, across markets, and within our own product teams and directions.

What we're really trying to do

[00:20:45] So to summarize, what we're trying to do is rethink our structure as a company, because the way we're set up now is not fit for purpose to get us where we need to be, either in 25 or what's likely to be after that. So how do we make sure we are clearly focused on building these relationships with each consumer in the right way? And not to get too hung up on 500 million, but to think about the quality of these relationships and how they are balanced across the different categories and audiences that we are trying to connect with. How do we make sure they are meaningful?

[00:21:20] We do this by creating a shared direction between our teams. Are we all trying to work together towards the same goals? Do we know why we do what we do? How do we innovate, learning from each other, having the right mix of diverse perspectives, skills and knowledge involved at every level of the work processes? Not just within your product triad of design, product and technology, but also with respect to the people who create the products, or the people who are ultimately responsible for the commerce.

[00:21:53] I want to encourage you to finish. Maybe you're sitting there thinking, okay, this is all great for adidas, a big global company. We operate in about 60 different markets, have a market capitalization of 60 billion, and 60,000 employees. We have armies to do these things. And we are doing it, but that doesn't mean it will be done. We have to focus together. But whatever your company is, you might think, okay, this isn't for us. We need to do something different in our industry.

[00:22:23] But in the end, that's not the case. Each of you here is a leader on your team, and it's good to think about it this way. You sit at this intersection of different areas of your organization. Whether it's a similar marketing and sales framework, or business, or something else, inevitably product development teams are in the middle, because you're talking to all these people, trying to understand where our business is going, what our customers need, what's possible in the short term and the long term.

[00:22:48] So I would encourage you to be bold in your thoughts. How far can you take this idea? Now is the time to push the boundaries, as we need to focus within the limitations. It's very important to be brave enough to ask why, and to say, let's hold off and find a better solution, and be those advocates for change. Take it upon yourself, because you can be the leaders who drive the business transformation in the right way to create this great experience. And while there will always be skeptics and haters in every company, in the end, if you come in with the right idea and approach, and even better with a working proof of concept, it's very easy to change the conversation from why to why not.

Q&A

[00:23:40] Niall: That's really all I wanted to talk about. I'll end with this. Thank you very much everyone.

[00:23:45] Host: We'll just hold you here for a second, and we'll just see if we have any questions from the audience. If someone is online, you can also use the Slack channel to ask Niall questions. So, do any of you want to ask Niall a question? We have someone here. If you could give your name, your company name, and your question to Niall, that would be great. Let's drink some water.

[00:24:09] Audience: Hello, thank you very much for the presentation. I'm from AutoScout, so I work in UX. I'm really happy to see that the user journey is part of the process, because that's what UX has been screaming about for a long time. My question is more about how to bring this mindset into organizations that are very business and marketing oriented, that is, sales-oriented, in the sense of: how do you organize the success metrics for that? Because I see a shift from income to LTV, lifetime value, which is extremely important. But I think, based on the previous conversation, business cases like: how did you implement these changes when everyone is thinking about the bottom line and, as you mentioned, the stress of revenue? But it's about long-term thinking about what the value of each customer is to the business, as well as the added value for each customer. So maybe you could elaborate a little bit more on that?

[00:25:00] Niall: Okay, I'll try. I think being a change agent and, frankly, achieving something is really a matter of trust and your own credibility within the company. And honestly, it's often very helpful to just get a few points on the board. Maybe people have a pressing problem in your company and they say, okay, we can fix this, but we just don't put much effort into it. And you buy that time to focus on these bigger issues and say, okay, we fixed that part, but what we actually realized is that there's another part.

[00:25:32] Niall: And the most important thing is not to impose it, or at least to try not to say, well, okay, we can make this great screen, everything moves, and so on. But to say, okay, if we do this, we expect consumers to then behave differently, and we know that if they do this, it will lead to this type of business goal. And that's exactly what we're trying to do. So you link the behavioral metric to your business metrics, and then you link it to what you're trying to do overall.

[00:26:00] Niall: So, in your example, and going back to what I was talking about, if the focus was on a specific type of metric. So, conversion, let's say. In this case we can think in terms of the platform, and in general, e-commerce conversion rates are about one and a half to 2%, plus or minus. So okay, that leaves a lot of people, 98%. But maybe we could have a different type of goal. Maybe we want to talk about engagement. It seems to be somewhere in our strategy. Okay, maybe we need another experience to make sure we're doing that, and not trying to force everyone into this very narrow conversion opportunity that we know is most likely not going to happen.

[00:26:36] Niall: So I think it's important to always understand and be able to rationalize and communicate your work to yourself, how you expect it to connect to business metrics, and thus earn trust so that the people on the other side of the table understand: okay, what will this mean for consumers? And then, how do we talk to technology organizations or content developers? Think about feasibility: what is possible in six weeks, six months, or 36 months, and organize around that. I hope this answers your question.

[00:27:02] Host: We have another question here, right in the middle.

[00:27:13] Audience: Hi, this is Julia. It's really nice to see Teresa Torres's structure, mapping possibilities, and I know that structure quite well. Because I was responsible for creating a program in my company to spread the word about product discovery, and I've had some difficulties implementing these practices, and especially with the mentality. Especially because my understanding is that this is something that changes not only practices at the team level, but also at the decision-making level, at the leadership level, across the entire organization. I'm curious to know how this is implemented at adidas, and if you have any tips or best practices you'd like to share.

[00:27:59] Niall: Yes, this is probably a topic for a separate conversation. But I think the secret is often to start small. We created this structure a few years ago, and in change management the phrase "yes, everyone do it now" rarely works, because you can imagine how that conversation will go. So we want to bring in early adopters, people who were part of the process of creating it and people who can already implement it, and then use the changes and successes that they have made to promote and show others: look what happens when you do it this way.

[00:28:36] Niall: Because you can have teams that are very focused on almost project-oriented implementation. But if you show how that can change, to drive strategy, accepting the uncertainty that's inherent in any strategy, and saying, it's okay if we don't know what will happen in five years, but if we know what we're aiming for and have an idea of what success looks like. Here is our plan on how to achieve this. So, here are a series of questions we'll be working on, goals, and here's how we'll know whether we'll continue working on each one or stop along the way.

[00:29:08] Niall: We can do this at a smaller level, of an individual team, a region, or entire organizations. But it's fundamentally the same as understanding what you're doing, why, and what your path to further ideas is, and then, starting with management or yourself, deciding what happened. So how do I change the focus from betting all my money on this solution, and we spend three to six months trying to figure it out and build it, to saying, well, actually, if we broke this down into 10 or 15 different pieces and over the course of a quarter gradually refined each one, you'd probably end up with a much more robust solution, something that's much more relevant to end users and actually impacts these business metrics. And you probably have a much better understanding of why it's happening, so you can factor in the next set of solutions or opportunities that you're working on. And again, it's just a matter of socializing this and getting people into this way of thinking and working.

[00:30:00] Host: Anyone else? Were there any questions from Slack or something? Any calls or questions came from... Oh, we don't have it. Cool. OK. Good.

[00:30:11] Niall: Perfect. No, I appreciate it. Thank you very much.