For New Balance, next year will mark a major turning point. CEO Rob DeMartini is implementing a fresh plan of attack at a time when the athletic market has never been hotter — or more competitive.
The Boston-based company’s ambitious strategy includes capitalizing on its just-announced New York Road Runners partnership, its 3D-printed midsole technology and a stronger focus on its women’s and international businesses — areas where New Balance has lagged behind its rivals.
The team-up with New York Road Runners is a multifaceted deal that will fully roll out in 2017. The pact makes New Balance the group’s official footwear and apparel partner and the sponsor of all its events, including the TCS New York City Marathon.
It also has a retail component — a running center that’s slated to open in 2016 near Columbus Circle. “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,” said DeMartini. “Properties like [the New York Marathon] legitimize you in the running [world].”
“What we were looking for was a year-round partner,” said Peter Ciaccia, president for events and race director for the TCS New York City Marathon, which had been sponsored by Asics for the last 25 years. “New Balance was so much aligned with what we’re doing. We went through all the presentations, and they bubbled to the surface right away.”
Not only is the relationship exciting for both parties, it’s also good news for New Balance’s retailers. Kris Hartner, owner of Naperville, Ill.-based Naperville Running Co., was critical of New Balance after it terminated its Chicago Marathon sponsorship following the 2007 race, but he believes the New York initiative is monumental.
“When they gave up Chicago, I was like, ‘Why did you do that? Where’s your commitment?’ To me, that was a negative,” Hartner said. “[But New York] is huge. They’re coming at it from all angles — they’re going after it in a big way.”
According to the store owner, New Balance sales have grown more at Naperville Running Co. in 2015 than any other performance brand — and it has the retailer’s best-selling shoe of the year, the 860v6.
Hartner said the company’s new push could help shake an image he believes has followed it for years — that its products are strictly worn by an older, non-athletic demographic. “In running specialty retail, there are a lot of people who still pigeonhole them,” he said.
But DeMartini and his team are determined to prove that New Balance is a forward-looking brand that is focused on technology. Its latest innovation, 3D-printed midsoles that were unveiled in November, uses 3D Systems’ newly developed elastomeric powder, DuraForm Flex TPU.
The yet-unnamed running shoe is slated to launch in Boston in April and later at select New Balance retail locations globally. First, the brand plans to display and demonstrate the shoes at the 3D Systems booth at the 2016 Consumer Electronics Show, from Jan. 6-9.
“New Balance is a 109-year-old brand that was founded on innovation, and through the leadership of owners Jim and Anne Davis, we have had the courage to do it our way,” DeMartini said. “3D printing has the potential to change the way we make footwear.”
While the brand is investing in new technology, it also has a longstanding commitment to Made in USA manufacturing and to its employees, who construct shoes in New Balance’s Lawrence, Mass., facility. DeMartini believes the brand’s focus on digital advances won’t have an adverse impact on traditional manufacturing processes. In fact, he’s confident that the newest techniques and traditional processes will eventually complement each other.
“We’ve talked with our employees and told them that we’ve never had a manufacturing layoff in our history. 3D is not at all a threat to our labor force; we think it makes us more relevant. We may start with parts of shoes being 3D-printed and other portions being made by traditional manufacturing methods, but we definitely think they will work together.”
New Balance also plans to get out in front of more consumers. This year, the brand introduced its “Always in Beta” campaign, a multiplatform marketing initiative that launched in July that highlights New Balance’s commitment to continual improvement.
“The work that goes into trying to position this is significant, and it needs to last longer than a couple of quarters,” said DeMartini, noting that the campaign will continue through 2016. “It will evolve and put the athlete at the center. The flavor of it may change modestly, but you’ll see the investment continue.”
New Balance also invested deeply in the building of its new corporate headquarters in Boston’s Allston-Brighton neighborhood, part of the Boston Landing real estate development. The 250,000-sq.-ft. location features multimedia infrastructure upgrades and an atrium with a visitor-engagement center that displays the company’s history and innovations.
DeMartini said the headquarters is a testament to the company’s growth, which he said is roughly 15 percent per year. “Not only did we need more space, but also we needed [a headquarters] that recognized how people work today. It’s far more collaborative [and] functional in the way we develop product and our business,” he said.
Although New Balance is moving rapidly to become a go-to brand for athletes, DeMartini admitted that areas of its business need work, including women’s. “There are good competitors in this space that are engaging this consumer as a performance athlete,” he said. “The message we’re trying to bring to her is that we’re working just as hard on performance product for women as we are for men.”
New Balance began addressing this shortcoming in September with the release of its first catalog dedicated to the female athlete, which was sent to 1 million consumers.
DeMartini said New Balance will also target areas of the world where the brand is not well-known, particularly in Asia and Europe. “We’ve been in Japan for a long time, but in the rest of Asia, we are less than 10 years old,” he said. “You’ll also see us make progress in Europe, where we have historically been underdeveloped. We’re making significant investments and seeing a nice return on that.”