Here's How New Balance Went From ‘Dad Shoe’ To Scoring The No. 1 NBA Draft Prospect

New Balance's Transformation: From Dad Shoe to NBA Draft Prospect

Key Concepts:

• Athlete Endorsements: Using sports stars to promote brand image and drive sales.
• Brand Repositioning: Shifting a brand's identity to appeal to a new target audience.
• Performance Footwear: Shoes designed for athletic activities.
• Lifestyle Sneakers: Shoes designed for everyday wear, often inspired by athletic designs.
• Marketing Strategy: A company's overall plan for reaching and influencing customers.

Cooper Flagg Acquisition

• The Challenge: New Balance CMO Chris Davis tasked Naveen Loesh with signing Cooper Flagg, a highly touted basketball prospect, despite competition from larger brands like Nike and Adidas.
• Flagg's Background: Flagg grew up near New Balance's manufacturing facility in Skowhegan, Maine, and had positive childhood experiences with the brand.
• The Pitch: New Balance leveraged its connection to Maine, creating a tribute video featuring Skowhegan factory workers. Loesh stated the video "Let the associates that have been working in Maine for 20 years speak for us."
• Success: New Balance successfully signed Flagg as an ambassador in August 2023.

Shift in Marketing Strategy

• Historical Approach: New Balance historically avoided athlete endorsements, emphasizing product quality over celebrity endorsements. As Matt Powell of BCE Consulting noted, "They prided themselves that athletes were choosing to wear their products because it was a good or great product, not because they were getting paid." The company even ran a campaign with the tagline "endorsed by no one" during the 1990s.
• Modern Strategy: Over the past 15 years, New Balance has shifted its strategy to include athlete endorsements to redefine its brand and appeal to younger consumers.
• Current Roster: New Balance now boasts a roster of athletes, including Koko Goff (tennis), Shohei Ohtani (baseball), Kawhi Leonard, Jamal Murray, Tyrese Maxey (NBA), and Cameron Brink (WNBA).

Brand Evolution and Financial Growth

• "Dad Shoe" Image: New Balance was once known for its practical but unfashionable "dad shoe" image, parodied by Saturday Night Live as "Shoes made for running but worn by chubby white guys in their late 30s to early 40s."
• Revenue Growth: This evolution has fueled significant revenue growth. New Balance's topline has more than quadrupled since 2010, from $1.8 billion to $7.8 billion last year.
• Recent Growth: From 2022 to 2024, the brand grew global revenue 27% collectively across its baseball, basketball, football, and tennis categories.
• Sports Footwear Segment Growth: Forbes estimates New Balance's sports footwear segment (performance, lifestyle, and outdoor) grew 50% from $4.4 billion to $6.6 billion worldwide during that period.

Driving Lifestyle Sales

• Halo Effect: Athlete endorsements and performance footwear growth drive consumers to New Balance's lifestyle sneakers and apparel, which is where the industry makes the bulk of its money.
• Correlation: The brand's growth coincides with key athlete achievements, such as Goff's US Open victory, Ohtani's World Series win, and Murray's NBA championship.

Conclusion

New Balance has successfully transformed its brand image from a "dad shoe" company to a relevant player in the sports and lifestyle market. This transformation was achieved through a strategic shift towards athlete endorsements, a focus on performance footwear, and leveraging its heritage and values. The acquisition of Cooper Flagg exemplifies this new approach and demonstrates New Balance's ambition to compete with industry giants like Nike and Adidas.