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NEW BUSINESS PITCH
Always in Beta
NAME BRAND PITCH TYPE
Creative
MARKET DATE
July 12 , 2016
The Data You Need to Win This Pitch
DESCRIPTIONAfter more than six years with AOR Arnold International agency, New Balance is looking for a new global creative agency. According to Arnold
Worldwide, “New Balance has decided to move towards greater consolidation across their roster of agencies.” And a New Balance client rep reported that the company is reviewing its agency roster to “evaluate future agency structure” and review their portfolio. If it sounds like the reasons are unclear, it’s because they are. What we do know is that the review is being managed by consulting firm R3 Worldwide. We also know that New Balance is looking
to increase its share of the global athletic shoe market, particularly running shoes.
New Balance parts ways with AOR
Arnold International
thGlobal
Client Profile / Market
Founded in 1906 as New Balance Arch Company (to make arch supports), New Balance Athletic Footwear runs on its everyman (and everywoman) appeal. Besides making and selling men's and women's shoes for running, cross training, basketball, tennis, hiking, and golf, the company offers fitness apparel and kids' shoes and owns leather boot and shoe maker Dunham. Other brands include Aravon shoes for women; PF Flyers lifestyle shoes; and Brine and Warrior Sports lacrosse, field equipment, and apparel. It sells its footwear in its own stores and those of specialty retailers. New Balance is known for its selection of shoe widths.
FINANCIAL OVERVIEWCOMPANY BACKGROUND
MAIN COMPETITORS
2015 Sales (mil)
2015 Employees
Employee Growth Percent
Assets (mil)
Net Income Growth Percent
Sales Growth Percent
1,712.651
2,200
-
-
-35%
2.4%
The Footwear Market
$76.1 Billion
COMPARED TO 20147%
- Euromonitor.com -
FOOTWEAR MARKET’S
VALUE GREW
- Euromonitor.com - 62%
Athletic Footwear
38%
Non-Athletic Footwear
MARKET SHARE
VALUE IN 2015FOOTWEAR MARKET
3000
Athletic Footwear
40
30
10
0
20
2015 ATHLETIC FOOTWEAR SALES GREW
8%COMPARED TO 2014
BRAND SHARE OF RUNNING SHOE BUYERS, BY GENDER IN 2014
SauconyNew Balance AdidasBrooksNike Asics
Males Females Total U.S.15000
12000
6000
0
9000
2015 ATHLETIC FOOTWEAR GENERATED
$17.2BCOMPARED TO 2014
MOST STOCKED ACTIVEWEAR BRANDS: SIZE OF OFFERING
ReebokNew Balance UnderArmourNikeAdidas Asics
Fast Food industry in numbersAthleisure: Activewear is Fashionable
“The growth of athleisure has really been tied to the notion of embracing comfortable, well-designed, casual fashion that is both functional and fashionable. This trend is clearly being seen in the footwear market where the popularity of stilettos and formal dress shoes has decreased just as the athleisure trend has begun to take hold.”
Sandy Silva, Fashion Industry Analyst @The NPD Group
ACTIVEWEAR APPAREL
GENERATED
$43.6 BILLIONSALES IN 2015
ACTIVEWEAR SALES INCREASED BY
• • 16% • •FROM 2015
ATHLETIC APPAREL NOW ACCOUNTS
• • 28% • •OF CHILDREN
CLOTHING
ATHLETIC APPAREL NOW ACCOUNT FOR
• • 17% • •OF TOTAL CLOTHING RETAIL MARKET
MILLENNIALS MAKE UP
• • 45% • •OF TOTAL SALES IN THE ACTIVEWEAR MARKET
30%
20%
10%
Fast Food industry in numbersClassic Models Driving the Athletic Footwear Category
+26%MEN
- 5%
35%
25%
5%
- 10%
15%
Casual AthleticWalking RunningCross
TrainingClassic Hiking
PERFORMANCE AMONG MAJOR ATHLETIC FOOTWEAR CATEGORIES 2014 vs 2015
0%
Dollar % Change
+69%WOMEN
+29%CHILD
•••
•••
•••
CLASSIC MODELS’ SALES GROWTH
New Balance
WHAT’S ON NEW BALANCE’S AGENDA
PERFORMANCE RUNNING TECHNOLOGY WOMEN
NEW BALANCE’S REVENUESIN 2015 WERE CLOSE TO
• • $8 BILLION • •
• MADE IN THE USA • NEW BALANCE MANUFACTURES AROUND
• • 25% • • OF ITS FOOTWEAR IN THE U.S.
NEW BALANCE’S REVENUESHAVE GROWN
• • 15% • • ON AVERAGE
NEW BALANCE’S MEDIASPENDING IN 2015 WAS
• $34.2 MILLION •
Fast Food industry in numbersPerformance Running
The pact makes New Balance the group’s official footwear and apparel partner and the sponsor of all New York Road Runners’ events,
including the TCS New York City Marathon.
Rob DeMartini, CEO and President @New Balance
“What this says is that this is a brand that’s very relevant in the running space — on par with anybody else that’s here; Properties like the New
York Marathon legitimize you in the running world.”
The pact makes New Balance the group’s official footwear and apparel partner and the sponsor of all New York Road Runners’ events,
including the TCS New York City Marathon.
New Balance will also work together with NYRR on the opening of the new NYRR running center. The running center will serve as the hub for NYRR
runner services and will feature an exciting New Balance retail component.
Fast Food industry in numbersA Forward-Looking Brand Focused on Technology
NEW BALANCEZANTE GENERATE
New Balance presented the first 3D-printed shoe at the 2016 Consumer Electronic
Show in Las Vegas.
NEW “DIGITAL EXPERIENCE” DIVISION
at the International Consumer Electronics Show
(CES) in Las Vegas a new division dedicated exclusively
to connecting consumers with the technology they desire to improve their athletic performance.
Digital Sport will initially focus on three product
categories: devices, embedded technology, such
as intelligent sensors integrated into New Balance footwear and apparel; and
performance sport, including sports equipment micro-fob that senses, analyzes and provides feedback on the
athlete’s performance.
The company will partner with leading digital, hardware
and software companies, including Intel, Google,
Strava and Zepp, to incorporate smart
technologies, optimized for wearable consumer products,
into footwear and apparel lines across a variety of
sports.
The division’s inaugural product will be a smartwatch
that will enable athletes to work out while untethered from their smart phones.
Fast Food industry in numbersWomen
“The message we’re trying to bring to her is that we’re working just as hard on performance products for women as we are for men.”
Rob DeMartini,CEO and President @New Balance
On September 2015 New Balance launched NB women, a comprehensive, cross-category, head-to-toe collection of products that offer athletic female
consumers the performance and style they demand.
Launched in May ‘14, GNO is an app that helps women to create and discover group runs and fitness activities, and invite friends to join in the fun.
Readers are encouraged to experience the brand’s augmented reality shopping experience by downloading the Blippar app to “Blipp”
designated pages to unlock exclusive content.
FEMALERUNNERS
• • •
• • •
QUICK DEFINITION
Many Female Runners see running as an everyday activity. Running is more than just a way to stay physically fit and healthy;
it has become a lifestyle. Runners often share knowledge, practice tips, eating habits and values. They enjoy outdoor activities and are willing to participate at sports events like
marathons.
RECREATIONALACTIVITIES
BEAUTY & WELLNESS FASHION READING
HABITS
59%
FEMALE RUNNERS
Compare the Female Runners Demographicwith New Balance’s Female Audience
New Balance’s female audience overlaps with our Female Runners
demographic by 65% in interests, including:
Recreational Activities, Beauty,
Reading and Fashion
NEW BALANCE’S FEMALE AUDIENCE CROSSOVERS
Just like every female runner, New Balance’s female audience loves to
get outside and practice some of their favorite activities.
Backpacking is the New Balance woman’s favorite outdoor activity,
while Female Runners’ top activities include hiking and walking.
New Balance women are much more interested in Sport Events (182 pop), especially The Boston Marathon and
two of female runners’ favorite events: Nike Women Races and Run
Disney.
TOP ACTIVITIES
HORSERIDING
FEMALE RUNNERS:RECREATIONAL ACTIVITIES
HIKING WALKING KNOWMORE
TOP ACTIVITIES
NIKE WOMEN RACES
THE COLORRUN
RUNDISNEY
KNOWMORE
OUTDOORENTHUSIASTS
170.9 POPULARITY
SPORTEVENTS
175.3 POPULARITY
NEW BALANCE’S FEMALE AUDIENCE CROSSOVERS
FEMALE RUNNERS:BEAUTY & WELLNESS
New Balance’s female audience is beauty and wellness aware,
and, of course, they are physically active. Looking at
their favorite fitness activities we found a high interest in
CrossFit.
As Cosmetic Connoisseurs, they make extensive use of high
quality beauty products from head to toe. Aveda is their
favorite brand.
148.1BEAUTY &
WELLNESS AWARE
COSMETIC CONNOISSEUR
170.8ACTIVE & FIT
187.5
TOP COSMETIC BRAND
BIRCHBOX KNOWMORE
FITNESS ACTIVITY
PILATES KNOWMORE
NEW BALANCE’S FEMALE AUDIENCE CROSSOVERS
FEMALE RUNNERS:FASHION
Fashion is another common interest among New Balance’s female
consumers.Beside footwear, they are over indexing on on Athletic Apparel
(191.5) and they are interested in fashion Accessories.
Handbags dominate the ranking of accessories. Despite the high
popularity of Handbags & Purses, Bolder Band Headbands are their
favorite accessory brand.
Their favorite Sport Retail store is L.L. Bean
TOP ACCESSORY BRANDFAVORITE SPORT RETAIL
ATHLETICAPPAREL169.5
ACCESSORIESADDICTED181.0
KNOW MORE
KNOW MORE
HANDBAGS & PURSES
160.1
FASHIONLOVERS144.8
REIKATE SPADENEW YORK
NEW BALANCE’S FEMALE AUDIENCE CROSSOVERS
Contrary to our Female Runner demographic, reading doesn’t
stand out as one of the favorite activities for New Balance
women (Readers 106.6 pop).
When they do read, however, they enjoy sports and travel
magazines, and their favorite website genres are Health, Food
and Daily Deals.
FEMALE RUNNERS:READING HABITS
BOOKWORMS
GOSSIPERS
WELL- INFORMEDNEWSIES
REACH POPULARITY
READERS137.4
FAVORITE BOOKFAVORITE MAGAZINESFAVORITE WEBSITES
HEALTHWEBSITES185.7
SPORTMAGAZINES165.6
NOVELS
171.9
ACTIVE.COM KNOW MORE
RUNNERS WORLD
KNOW MORE
EAT, PRAY, LOVE
KNOW MORE
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