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New Balance Pitch Brief

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After 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.

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New Balance Pitch Brief

  1. 1. NEW BUSINESS PITCH Always in Beta
  2. 2. NAME BRAND PITCH TYPE Creative MARKET DATE July 12 , 2016 The Data You Need to Win This Pitch DESCRIPTION After 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 th Global
  3. 3. 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%
  4. 4. The Footwear Market $76.1 Billion COMPARED TO 2014 7% - Euromonitor.com - FOOTWEAR MARKET’S VALUE GREW - Euromonitor.com - 62% Athletic Footwear 38% Non-Athletic Footwear MARKET SHARE VALUE IN 2015 FOOTWEAR MARKET
  5. 5. 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 $17.2B COMPARED TO 2014 MOST STOCKED ACTIVEWEAR BRANDS: SIZE OF OFFERING ReebokNew Balance Under Armour NikeAdidas Asics
  6. 6. 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 BILLION SALES 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
  7. 7. 30% 20% 10% Fast Food industry in numbersClassic Models Driving the Athletic Footwear Category +26% MEN - 5% 35% 25% 5% - 10% 15% Casual Athletic Walking Running Cross Training Classic Hiking PERFORMANCE AMONG MAJOR ATHLETIC FOOTWEAR CATEGORIES 2014 vs 2015 0% Dollar % Change +69% WOMEN +29% CHILD • • • • • • • • • CLASSIC MODELS’ SALES GROWTH
  8. 8. New Balance WHAT’S ON NEW BALANCE’S AGENDA PERFORMANCE RUNNING TECHNOLOGY WOMEN NEW BALANCE’S REVENUES IN 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 REVENUES HAVE GROWN • • 15% • • ON AVERAGE NEW BALANCE’S MEDIA SPENDING IN 2015 WAS • $34.2 MILLION •
  9. 9. 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.
  10. 10. Fast Food industry in numbersA Forward-Looking Brand Focused on Technology NEW BALANCE ZANTE 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.
  11. 11. 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.
  12. 12. FEMALE RUNNERS • • • • • • 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. RECREATIONAL ACTIVITIES BEAUTY & WELLNESS FASHION READING HABITS
  13. 13. 59% FEMALE RUNNERS Compare the Female Runners Demographic with 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
  14. 14. 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 HORSE RIDING FEMALE RUNNERS: RECREATIONAL ACTIVITIES HIKING WALKING KNOW MORE TOP ACTIVITIES NIKE WOMEN RACES THE COLOR RUN RUN DISNEY KNOW MORE OUTDOOR ENTHUSIASTS 170.9POPULARITY SPORT EVENTS 175.3POPULARITY
  15. 15. 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. 148.1 BEAUTY & WELLNESS AWARE COSMETIC CONNOISSEUR 170.8 ACTIVE & FIT 187.5 TOP COSMETIC BRAND BIRCHBOX KNOW MORE FITNESS ACTIVITY PILATES KNOW MORE
  16. 16. 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 ATHLETIC APPAREL 169.5 ACCESSORIES ADDICTED 181.0 KNOW MORE KNOW MORE HANDBAGS & PURSES 160.1 FASHION LOVERS 144.8 REI KATE SPADE NEW YORK
  17. 17. 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- INFORMED NEWSIES REACH POPULARITY READERS 137.4 FAVORITE BOOKFAVORITE MAGAZINESFAVORITE WEBSITES HEALTH WEBSITES 185.7 SPORT MAGAZINES 165.6 NOVELS 171.9 ACTIVE.COM KNOW MORE RUNNERS WORLD KNOW MORE EAT, PRAY, LOVE KNOW MORE
  18. 18. CONSUMER INSIGHTS SUITE Discover the New Balance consumer TRY NOW FOR FREE > on Cubeyou Consumer Insights Suite

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