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Since hitting the scene in 1906, New Balance has always had a desire to innovate, challenge the status quo and constantly reinvent itself. Addressing and embracing that challenge is now a core ingredient of the 116-year-old company’s success. This includes adding superstar rapper Jack Harlow to the brand’s roster of ambassadors, as well as experiments with cryptocurrency, blockchain, and the metaverse. Chris Davis, chief marketing officer and senior vice president of merchandising at New Balance, stopped by Adweek’s Commerce Week to share his insights on calculated risk-taking and how it keeps the legacy standing against the test of time.
Disrupting a legacy
“We knew in order to do that; we had to transform a great 110-year-old product and company into a world-class athletic brand,” Davis explained. “Previously, the only feelings consumers had about New Balance were tangible — the shoes are comfortable, the leather is soft, my shirt is lightweight — we knew we had to transform those tangible feelings into something that evoked emotion.”
To do so, New Balance transformed itself from being a product-led company to a brand-led company, guided by a simple philosophy.
Davis said that ten years ago, New Balance’s journey to remold itself as a legacy disruptor began when the company set out to become the undisputed third-largest brand in the athletic industry.
“The death of all major brands in sports, retail, and fashion lies in the notion of stagnation,” he said. “So, what does that mean? Well, if you’re standing still, you’re moving backward. If you don’t have the courage to disrupt yourself or your industry, you will ultimately be disrupted.”
A brand with heritage, not a heritage brand
According to Davis, New Balance’s goal is to always be a brand with heritage versus a heritage brand, striving to be the best, not the biggest.
“This distinction between being a heritage brand and a brand with heritage makes us trend-proof,” he said. “Every trend creates its opposite, but innovation is innovation. In our industry, there are periods where the 70s are hot, the 80s are hot, the 90s are hot — you’ll see brands be hot for a minute and go away. For us, we want to embrace those decades but also be more focused on the future.”
50-30-20 budgeting
All brands know that keeping innovation front-and-center can be costly — and taking risks may not always pay off. To help ensure the risks it takes are scalable and uniformly replicable, New Balance abides by a 50-30-20 budgeting method.
“50% of the budget is based on a proven tactic — this could be out-of-home or a national broadcast spot we know is going to work — 30% is dedicated to calculated risk-based tactics, it could be something that’s working in another industry or something that our industry has yet to adopt — digital assets, NFTs, etc.,” he explained. “Finally, 20% of the budget is dedicated to experimentation — high probability of failure. We hold innovation days once a quarter with new agencies and solution providers to bring new ideas to the table. If it works once in the 20%, it moves into the 30%. If it works two or three more times in the 30%, it moves to the 50%.”
