Boston-based athletic company New Balance has a simple mission: to become the world’s best running brand.
Well, a simple mission to state, anyway — certainly not an easy one to achieve, since (pardon the pun we aren’t even remotely sorry for) it’s a pretty tight footrace. Nike and Adidas would also like to be the world’s best running brand, and both are much larger. Nike comes in at around $32 billion in sales per year, and Adidas rakes in around $18 billion. New Balance, by comparison, brings in a mere $3 billion annually — certainly nothing to shake a stick at, but still 90 percent smaller than Nike.
But as Shakespeare famously wrote in A Midsummer’s Night Dream, “though she be but little she is fierce,” and New Balance has certainly brought its share of the fierce to the new year.
Said simply, New Balance is rethinking athletic footwear retail — how to sells shoes, where to sell shoes and how to carry on its relationship with its customers across channels — and in between sneaker replacements. It’s a multi-pronged attack that is leveraging both gadgets and a big reboot of the in-store experience that the Boston-based firm is betting big on.
The Step Into Tech: The RunIQ
New Balance’s most headline catching product of 2017 isn’t actually sneakers — it’s the firm’s first smartwatch, the $300 RunIQ. Already sold out on Amazon — though still up for grabs on the New Balance website — the RunIQ comes with a pretty impressive pedigree as the design is a collaborative effort between Intel, Google and Strava, which handles hardware, software and run tracking, respectively.
Anyone familiar with the FitBit — or any other fit-friendly wearable — is familiar with the feature set: built-in GPS, course, pace and distance tracking, heart rate sensor, Bluetooth, and 24-hour battery life (or five hours with continuous GPS use).
The watch is also water-resistant and will sync with Strava so that exercisers can share their workouts online with the rest of the Strava international running community. And that access, combined with the metrics it takes, is the main thrust of the New Balance contribution the fitness wearable markets — that it was designed “for runners by runners.”
“RunIQ combines our expertise in running with the best engineering advances through breakthrough collaborations with some of the biggest players in the technological industry,” New Balance CEO Rob DeMartini noted of the release.
And those collaborations are even more on display in New Balance’s new brand of physical stores.
The Run Hub
As of the writing of this article, there are three Run Hub shops across the country. The custom stores exist to feature exclusive products (available nowhere else) with unique tech and a space to test it all out, according to Chris Ladd, EVP of consumer experience.
“We started in the U.S. and identified five or six influencer markets that we wanted to penetrate. The Run Hub is our strategic attempt to continue to innovate and invigorate the sport of running and the running community.”
Run hubs are described by enthusiasts in their Denver, Colo. location as “2,000 square feet of running shopping nirvana.”
“If you look at our market share, nine out of 10 people walking into the door aren’t wearing New Balance. [The Run Hub] represents a tremendous opportunity to grow our brand even within the [New York Road Runners] community and their membership alone,” Ladd noted.
Once in a run hub, New Balance customers can treat themselves to an eight-second digital foot scan, bib pickups for races, and an assortment of inline, custom and exclusive footwear and apparel.
“The loudest measure is what the running community will look like as we inject the Run Hubs over time,” said Ladd. “To me, that community engagement and participation in running is the measure that will ultimately lead to more footwear and apparel sales.”
The new favorite phrase in retail reinvention is building a better experience. What exactly that means in practical terms can — and does — vary quite greatly.
But New Balance seems to be introducing two concepts worth watching. The first is that one ought follow their customer base into the experience they are building — as opposed to the other way around. If your consumers are born to run, well, then you should probably offer them a shopping experience that lets them run (or prepare to run, or talk to someone else at length about their running routine).
The second concept worth watching is how New Balance is using its wearable — which is to mean their customers connected to the activity, a community — and their brand. And all in a way that seems designed around their needs as hobbyists.
If it works, it probably won’t make New Balance as big as Nike. But then New Balance’s goal isn’t to be the biggest sneaker brand in the world for runners — just the best one.