“We knew we had an imperative to really accelerate our digital transformation efforts” even prior to the pandemic, CEO Joe Preston said. But Covid kicked things into overdrive.
Dads and New Balance sneakers—name a more iconic duo; we’ll wait.
Now, where the two might start to diverge: making sense of newfangled technology. Your dad might still use a flip phone (honestly, we’re a little jealous), but New Balance is coming online.
“We knew we had an imperative to really accelerate our digital transformation efforts” even prior to the pandemic, CEO Joe Preston told Retail Brew. But Covid kicked things into overdrive. New Balance shut down all its stores, factories, and offices basically overnight and made a “100% pivot to digital sales,” Preston said.
It did take a hit—global revenues dropped to $3.3 billion in 2020, Preston told us, from $4 billion in 2019. But he expects that to rebound to $4.6 billion this year, and $5.6 billion in 2022.
“I can tell you that today we’re essentially, in many ways, a new company.”
Off to the races
New Balance tackled the transformation in 90-day sprints, of course. It sped up its website—and the implementation of its new enterprise resource management system. New Balance also launched a new analytics platform to better gather data on customers and hone its DTC business (sound familiar?).
- As a traditional wholesaler, New Balance didn’t have that direct connection to its customers; “the retailer had all the information,” Preston said.
- Digital—from its own sites, partners, and marketplaces—made up half the company’s volume sales last year, he noted previously.
The data is also used to help create new products, since there haven’t been any marketing trips in the last year and a half—whether that’s crowdsourcing color combos or trendy sneaker styles.
But Preston cautioned it’s about striking a balance.
Overrun: “Our industry is littered with brands that have overserved a particular trend,” he said. “It becomes a spike and then inevitably it just falls off and the consumer goes on to something else. As much as you can, [managing] the demand is a key part of elongating that product lifecycle.”
- Preston said StockX prices can be a reality check on your product and supply.
- New Balance has opened 11 new factories around the world to handle demand; one will come stateside late this year.
Looking ahead: Expect more experimentation (and yes, Preston did mention NFTs).
“We are always trying to find ways that will help the consumer get a product that fits them the way they want it,” he said. That could mean trying on a pair of sneakers with VR at home or incorporating new tech into stores—don’t think anyone forgot about brick and mortar.
“Consumers want experiences when they go to stores,” Preston said.
Source: Retail Brew