How Can New Balance Achieve Annual Sales Of $7 Billion From 4 Billion 500 Million? These Strategies Deserve Careful Reading.

American sports leisure brand

Recently announced that

This ambition is not groundless.

Walking in the streets of Asian cities such as Beijing, Shanghai and Tokyo, the "NB" logo of New Balance appeared at a frequency similar to that of Nike's "Swoosh".

The "three bars".

According to NPD data from the US Market Research Institute, as of June 30, 2018, within 12 months,

Century inheritance

Its predecessor is a company that specializes in supporting arch braces and corrective footwear.

It was founded in 1906 and is headquartered near Brighton, Boston.

The brand launched its first pair of running shoes in 1938. With the development of business, from 1950s to 60s, New Balance began to provide professional sports shoes for local athletes. Footwear manufacturing became the main business of the company.

In 1972, the current chairman of the board, James S. Davis, bought New Balance.

Over the years, New Balance has insisted on privatization and independent operation, and will continue to maintain this business for a long time in the future.

At present, the company operates 5 factories in the United States, and has a factory in Flimby, UK, which has more than 7000 employees worldwide.

New Balance started developing clothing products in 1978.

Today, the company offers all kinds of sports equipment and equipment such as football, lacrosse, hockey, baseball and cricket.

In 2001, New Balance acquired the PF Flyers of American leisure shoes brand; in 2008, the company acquired Vital Apparel Group, an American clothing company, to further expand the lifestyle footwear and clothing market.

New Balance chief executive, Rob DeMartini, said:

At present, we have 4% market share in the world.

According to this growth rate, we have sufficient confidence to achieve sales target of US $7 billion by 2023.

Three core strategies

Focused performance products

For Rob DeMartini and his team, a milestone of $7 billion means that they must adhere to the three core strategies of the brand:

In other sports brands sponsoring sports leagues and professional athletes, and co operating with popular stars and street opinion leaders to grab headlines, the core strategy of New Balance is always focusing on the product itself and providing high performance running shoes for top marathon runners.

"These athletes are very important to our success," said Jeff McAdams McAdams, director of international marketing at New Balance.

They are the first batch of Experiencers and testers of our performance products, and they have verified our technological innovation to keep New Balance young and young.

New Balance also maintains close cooperation with young athletes and all kinds of sports events.

It not only sponsored the New Balance Nationals, High School Tennis Championship, and the high school sports meet (Area Code Games), but also proposed a player development plan for high school baseball players, and sponsored a number of University and University events.

New Balance Japanese subsidiary has recently become a sponsor of the Nagoya women's marathon.

In January this year, the company signed an agreement with the famous Japanese shoemaker Hitoshi Mimura (Mimura Hitoshi) to employ it as an exclusive consultant.

According to the terms of the agreement,

Developing lifestyle and clothing business

While focusing on performance products, New Balance is also actively developing lifestyle and clothing business.

New Balance's retro sneakers catch up with the current "Daddy shoe" craze and become popular in the field of lifestyle.

In fact, these retro sneakers are regarded as lifestyle products in the history of New Balance brand, they are all sports shoes for athletes.

According to Rob DeMartini, "the company focuses on performance products, but we also realize that brands must also have a sense of fashion.

Sales of lifestyle businesses account for about half of total sales, and the success of lifestyle businesses has enabled us to invest more in performance products.

Although footwear products still account for 80% of New Balance's total sales, the company set up a new clothing department many years ago to promote its apparel business.

The Department, led by Deirdre Fitzgerald, the global fashion executive vice president, worked in fashion brands and retailers such as Talbots, J. Crew, Brooks Brothers and Bloomingdale 's.

Deirdre Fitzgerald said: "as a team, we believe we can increase the fashion sense of the New Balance brand without affecting the performance of the product.

In the past 7 years, our clothing business has increased 4 times. "

In order to maintain the fast growth of clothing business, Deirdre Fitzgerald realized that the proportion of products for female consumers must be improved, which is the core of the Department's work in the next 5 years.

Rob DeMartini said: "in the history of the brand, the proportion of male and female businesses in New Balance is 7:3, which is now 5:5, and we hope that both will grow rapidly."

Looking ahead, Deirdre Fitzgerald said it would continue to promote the brand's global lifestyle proposition and further expand its investment in northern beauty business.

Attracting the millennial generation

In addition, New Balance promotes products to regional opinion leaders, attracting millennial generation to bring brand growth.

But the company does not pay publicity to these opinion leaders.

"The influence of these opinion leaders is declining, especially in the Asian region," said Jeff McAdams.

The millennials are becoming more and more aware of the difference between paid and unpaid endorsements.

New Balance also strengthened its links with the millennials through joint products.

Previously, the Brand Co operated with J. Crew, Kith and United Arrows, such as fashion and tide brands and Concepts, a high-end skateboard retailer in the United States.

Recently, New Balance has also successfully launched a joint product with the British designer Paul Smith.

Despite the popularity of the joint products, Jeff McAdams added: "in fact, in the past two years, New Balance is reducing its partnership with partners, but is more focused on investment performance products."

New Balance launched a special series of products for New York and London Marathon, and became its sponsor in 2017.

Jeff McAdams said: "these sporting events are excellent opportunities for expanding clothing and performance products."

Balanced development of regional businesses

The first overseas subsidiary of New Balance is established in Japan and has been in operation for 30 years.

The company has a design studio in Tokyo to develop advanced running shoes technology for the markets around the world.

Rob DeMartini said: "over the past 30 years, Japan has been our second largest market.

Our Tokyo design studio is not just for Japan, but for global business.

The reason why we put the design studio in Tokyo is because it is the fashion center in Asia.

Jeff McAdams added:

To this end, the fashion and lifestyle business of New Balance has become the cornerstone of the Japanese market. "

Apart from Japan, New Balance also has subsidiaries in China, Asia Pacific, Australia, New Zealand, South Africa, the United Kingdom, Spain, Italy and Scandinavia.

In other parts of the world, the company sells products through authorized distribution.

China is a key market for New Balance.

In China, brand is strengthening the enthusiasm of marketing activities to expand its business.

Jeff McAdams said: "in the past few years, China's business has been developing very rapidly.

Before, there were few people in China who are keen on running, but in the past two years, the situation has obviously changed.

Most Chinese consumers have received short distance running, and half horse and horse races are becoming more and more popular.

The brand officially entered the Chinese market in 2003 and set up a subsidiary 8 years ago.

Jeff McAdams said: "the Chinese market takes the form of direct selling without wholesale business."

The main distribution mode of New Balance is specialized retailer, which was established in 80s and 90s in twentieth Century.

But the importance of direct selling is growing.

New Balance began its flagship store three years ago, and now covers cities like Tokyo, Seoul, Shanghai, Boston, San Francisco and London.

At the same time in New York, Berlin, Milan and Madrid to set up large stores, although these stores in the company is not known as flagship store, but its performance is also very outstanding.

In addition, New Balance is also selling on Amazon (Amazon), which is regarded as an important extension of branded online business.

According to New Balance executives, New Balance has the best performance in the US and Europe. Sales in the US have increased by 12%, and the Asian market that has been leading for a while has slowed down.

Brand performance in performance products and lifestyle products is good. In fact, sales over the past 3 years have surpassed the industry average.

Looking ahead, New Balance will continue to expand its international influence and expand its new business in Latin America (such as Chile and Brazil).

The latest market is located in the Middle East, although its business in the United Arab Emirates and India is small but still growing.

Every market has cultural nuances, but the goal of New Balance is to display a highly unified brand image worldwide.

Source: US website WWD, New Balance official website, NPD official press release, Wikipedia

Source: New Balance official website