The recent announcement that New Balance hit 6 billion in revenue has been touted by sneaker culture as evidence of the power of Joe Freshgoods and ALD. The reality is New Balance hit a low point 9 years ago due to the TPP and a conflict with the Obama Administration on a contract to provide footwear for the military.
If you’re reading this and asking what that last sentence means, hang on because I’m going to take you on a journey documenting the moves New Balance made to overcome being celebrated as the brand of khaki pants wearing Tiki Torch, alt right, conservative, racists. New Balance had to do one of the hardest things, adjust public perception without pandering.
They accomplished this via a strategy not rooted in just sneaker hype, but a series of moves to create a foundation for growth. It’s a play which brands currently facing headwinds probably aren’t patient enough to implement, because it’s a slow road, a slow sticky road.
1. The 247 is born – The list isn’t in order, but this shoe arrived as the adidas NMD was rolling. It was more disruptive internationally than in the U.S. and one model in particular was a sleeper in resale, The Tokyo Rat 247. New Balance was able to introduce retro style in a more futuristic design. They didn’t sit on this sneaker as it fell to the side, they continued introducing new styles to replace the previous drop each year. It showed the brand wasn’t resting on any success.
2. New Balance Reenters Sports Endorsements – The Red Mamba, Matt Bonner, wasn’t going to sell any sneakers for New Balance, but the story of his search for a discontinued style of NB hoops shoes was a precursor to New Balance reopening the floodgates of athlete sponsorship. Pulling Kawhi away from Jordan Brand made New Balance relevant in sport and they continued signing athletes who grabbed NBA Championships. These endorsements happened across every sport showing that New Balance was going to be a force in performance beyond just running and dad shoes.
3. Expanding Distribution Bolsters DTC – This one isn’t as sexy, but it is a foundational aspect of New Balance’s growth in DTC. The corridor from Memphis to St. Louis is known as the distribution center of the country. There is a reason Nike’s distribution is only 4 hours from St. Louis in Memphis. Expediting orders has been a critical aspect of e-commerce. Combine this with increased stores and this overlooked aspect is possibly the most important thing on this list.
Insider Ties: New Balance opens distribution center in St. Louis
4. New Balance and Neo-Nazis – It didn’t help that the brand was flying President Trump in on private jets while fighting for contracts with the U.S. government, the classic dad shoe was moved from the joke of “international shoe of dad’s bar-b-queing,” to a part of the racist uniform. The work New Balance did to offset this is included on this list and it continues.
5. International Growth – Did you know New Balance sponsors soccer teams at various levels in Europe? Did you know New Balance was the 3rd most popular brand in China? I didn’t know about China until 2016. Nike has such a dominant position in the U.S. it’s important for brands to gain ground internationally where Nike there are more feet, lol. Seriously, New Balance utilizes a service from Volumental in their doors internationally which limits returns because customer foot measurements allow for custom insoles which can be purchased in most stores.
6. Fearlessly Independent Campaign – Right after the issues with the Tiki Torch crowd New Balance created a campaign that rivaled adidas’ marketing strategies which bumped the Three Stripes to a new level against Nike. The campaign was beautifully brown.
7. Performance Running Focused – While sneaker culture loves to take ownership for the growth of a brand, New Balance nabbed Hitoshi and doibled down on performance. Fresh Foam and various runners took off like a rocket. NB sponsored the NYC Marathon, came up with running campaigns where runners earned pizza, but the fit and work done on their performance shoes kept New Balance in the top three at specialty running stores.
New Balance Nabs Former ASICS Advisor and Performance Running Legend Hitoshi Mimura As an Advisor
8. Singles Day 2018 – The work in the international market… I’ve said that before haven’t I? Here is a quote, “This past week, 11-11-2018, China had it’s annual Single’s Day event on Alibaba.” Under Armour was once considered a part of the Big Three (adidas, Nike…) This day was historic and is often overlooked and unknown by sneaker culture. This wasn’t about collabs, it was about smart strategies.
New Balance Is Solidifying Its Position as One of the Big Three
9. Joe Preston Steps In – New Balance had grown, but plateaued and the political controversies could have been a weight. Preston led a transformative process which included the creation of The Track and a Zappos styled investment in real estate around the New Balance campus. The Track completely change the scope of track and field solidifying New Balance has a challenger to Nike and Hayward Field.
New Balance Discusses Growth As Joe Preston Succeeds Rob Demartini as New Balance President and CEO
10. Navigating the Niche – On any consult with a brand or retailer I discuss my stategy of E.N.D.E.A.R.S. and Niche Out. Over the last 8 years here is what New Balance did in niche sports, they landed a superstar in Coco Gauff, nabbed Brommel, Femke, Sydney and Gabby in track and field, signed Lindor in baseball and nailed down so many soccer endorsements it would be amazing if they didn’t also nailed down NB Skate with Numeric. That’s not even everything.
New Balance Signs Cori ‘Coco’ Gauff | Endorsing the Future via Niche
11. Investing in Black Folks – Earlier when I discussed distancing itself from Neo-Nazis, I explained that NB made an important contribution which continues to pay dividends. UMass Boston is basically the Black College in the city. The Motley Chair just received another endowment from New Balance in the last year. The brand has given millions to the development of Black students in sports leadership. It’s a quiet venture which should be discussed more prominently.
12. Learning to Navigate Cool – StockX has lost their way, but what New Balance learned from the partnership with the ecommerce site was how to roll out hyped product. The company had worked with Kith and other brick and mortars on hype drops, but the data gleaned from the No Vacancy IPO was a warning to the brands controlling sneaker culture that something different was in water. Soon after New Balance signed Jaden Smith, made Teddy Santis the Creative Director and began work with Joe Freshgoods.
The StockX New Balance 650 x No Vacancy Inn IPO and Why It’s a Dangerously Brilliant Harbinger
13. Marketing – In the article below I questioned a lot of what was being done by NB. They were moving very slowly, and I compared their patience to Under Armour’s failure to use their signed athletes. Their patience in marketing is why we are here today.
New Balance is Making the Type of Marketing Decisions that Propelled adidas Four Years Ago
14. The Track at New Balance – You can’t compete with Nike if you don’t find a way to offset the legend of Hayward Field. While On, Brooks and Hoka are making waves, they won’t rival the Swoosh until they control aspects of where sport performance takes place. The Track made Nike so nervous they are now sponsoring The Armory. If you don’t understand that, you won’t understand why New Balance is growing.
New Balance’s “The TRACK at New Balance” Makes New Balance the Sole Rival to Nike for these Reasons
15. Teddy Santis – While this is at the bottom of the list and this list isn’t in order, sneaker culture does create a lot of free coverage for a brand. Teddy Santis and ALD provide New Balance with legitimacy, but for those who actually know the history of New Balance in Hip-Hop, the brand already had a streetwear aspect. Making Teddy Santis creative director was basically a respectful head-nod to sneaker culture. I place Joe Freshgoods and Salehe Bembury in this window as well.
16. Made in the U.S. and Reshoring – While the majority of New Balance sneakers are made outside of the country the commitment to opening factories (The company made it possible for JEMS by Pensole to exist) is an important and endearing business move. While the margins on Made in the U.S. sneakers are smaller (prediction coming) as consumers begin to realize the damage and the carbon footprint of footwear manufacturing, including shipping from international countries is, being able to produce in the U.S. will place New Balance ahead of the curve.
New Balance Ramps Up Reshoring with Skowhegan Factory Expansion Groundbreaking in Maine
This list could be longer, but this is an introduction to my documentation of New Balance’s process. I wanted to put the PRJ and product releases in this but it’s long enough already. What do you think I missed?
