New Balance, sales surpassed 600 billion won in 14 years in Korea… The secret?
Sales grew 25 times in 14 years after entering Korea, exceeding KRW 600 billion.
This is the performance report card for New Balance. Despite the prolonged aftermath of COVID-19, New Balance broke its record of sales again last year. New Balance was founded in Boston by William Riley in 1906. Under the philosophy of “creating a new balance for unbalanced feet”, it started by making shoes for people who suffer from strain on their feet, such as police officers, firefighters, and postmen who work all day standing.
* In 2008, E-Land secured the domestic publishing rights
The time when Korea began to establish a foothold for growth in earnest can be traced back to 2008. At that time, E-Land World signed a license agreement and began to import New Balance from the domestic market. At that time, domestic sales were around 25 billion won, and it was a ‘shoe brand known only by maniacs’. Then, some celebrities who are sensitive to overseas trends started to wear New Balance, and naturally, the brand awareness was built up among the 1020 generation. The word of mouth from the younger generation was terrifying.
Immediately, the ‘Newbal craze’ blew, and sales began to rise vertically. Sales of New Balance in Korea soared to 160 billion won in 2010, the third year E-Land took over. The following year, it surpassed the 300 billion mark at once. In 2020, when consumption was frozen due to Corona 19, it recorded 500 billion won, and last year it exceeded 600 billion won, rewriting the record for sales. Although it is a brand with a long history of over 100 years in the retail industry, we pay attention to how it was able to maintain its long-term vitality and grow steadily. So, together with industry and academic experts, we have summarized the secret of growth.
△ Secret 1: Shoes? no! Repositioning as a fashion brand
“It worked for me to analyze the domestic market and develop and sell trendy products that fit it. As E-Land’s manufacturing capabilities are supported, the proportion of clothing and supplies excluding shoes is three times higher than that of the global market.” A New Balance official explained.
In the domestic market, unlike other sports brands, New Balance is a sports brand, but many customers perceive it as a fashion brand. This is because, based on New Balance’s clothing license, E-Land has developed various clothing products by utilizing E-Land’s technical knowledge about clothing.
In 2014, the first functional goose down jacket series, ‘Patrol Down Pack’, was released and received a great response. The patrol jacket is a reinterpretation of the jacket of the PATROL TEAM, which conducts rescue operations in sub-zero temperatures. A lot of attention was paid to functionality. The water-repellent material that repels external water droplets and quickly drains sweat is designed to maintain strong warmth in winter snow and rain, and to quickly recover its original shape even after washing. It established itself as a sales force in the winter season, and from the following year, similar types of products were launched in a fierce competition, causing a great sensation in the down jacket market at the time. Over the years since, the upgraded version was released, establishing itself as a standard product, and exporting to overseas markets such as New Balance Japan.
The strategy of collaborating with the MZ generation’s favorite brand was also successful. In addition to functional lines, New Balance released high-sensitivity clothing products in collaboration with domestic and foreign artists, capturing both brand issues and sales in the Korean market. The MZ generation is collaborating with representative Japanese illustrator Noritake and writer Jeon Hwang-il, famous for subculture and lifestyle illustrations, to release limited edition products, as well as various collaborations with Korea’s leading street brand This Is Never That and select shop Slow Steady Club. appealed to
Kim Seok-jip, CEO of Nemo Partners POC, said, “The repositioning strategy of expanding the same brand to fashion, clothing, and accessories, and the ‘repositioning’ strategy of expanding the market by proposing coordinates that can be ‘fitted’ to the same target of the MZ generation. It worked.”
△Secret 2: Forward placement of shoe maniac staff
New Balance 530, 2002.
Last year, it was a product that could not be bought because it was not available among shoe maniacs. In particular, the 530 series sold out of stock in Korea and sold more than 100 satisfactions.
These products were born after E-Land employees saw domestic trends and proposed to launch them at the global headquarters. This is the result of planning products by continuously sharing Korean market reports with global managers. The model proposed by Korean employees sold well not only in Korea, but also in Asia, the United States, and Europe, and the credibility of the headquarters increased that much. New Balance’s summer season product ‘CRV Sandals’ also went through this decision-making process. Global New Balance has only slippers products except for sneakers, but it has been a great success by proposing a sandal model based on domestic trends.
In addition, there have been many initiatives that the MZ generation will be enthusiastic about, such as marketing for ‘Newtro’ and ‘Raffle’. Newtro Marketing refers to a marketing company that reinterprets traditional brands and hit products with modern sensibility to give nostalgia to middle-aged people and familiarity and unfamiliarity to young people. Raffle is a sales method that gives a chance to purchase through a random lottery, and is also used as a term such as draw.
The New Balance 992 series, which was a big hit last year, was discontinued, but was upgraded and restored after 14 years. ’72 pieces, 80 processes, 992 was born with 24.133 minutes of air effort’, etc. It drew attention by utilizing marketing and the release method of ‘Raffle’. New Balance 992 series sold out within 5 minutes of domestic release. In Hongdae and Gangnam, you had to wait in line before the store opened to purchase. The 327 series also captured the hearts of the MZ generation by reinterpreting the sensibility of the 1970s in a modern way. During the 1st and 2nd releases, the quantity of 2 Satisfaction was sold out, and it continued to be an issue in the raffle release after that.
An E-Land official said, “Most of the sales and sales staff as well as marketing are New Balance enthusiasts. As a result, there are a lot of field ideas. After planning, the results were good, so the head office gave Korean employees permission to develop and propose the necessary products themselves. Global brands have difficulties in launching localized products, but it is the result of a lot of efforts by the employees.”
△ Secret 3: Digital marketing, the sense of speed was different
Active social media marketing such as Facebook and Instagram. Digital marketing tailored to target customers. Now, this is a strategy that all brands are implementing.
What makes New Balance different is the sense of speed. New Balance has been keeping pace with the 1020th generation by constantly renewing the online store and app ‘MyNB’. When you enter the recently renewed official app, you can not see the products for sale right away, but you can see the ‘NB PLAY’ tab, which focuses on fun content such as events, quizzes, and raffles. In line with the brand’s healthy lifestyle, it recruits women’s fitness classes such as running clubs and Pilates, and has also created a ‘SPORT’ tab that allows you to continue running in your daily life by linking your Strava account. It was evaluated that sports AppTech content was added to the existing membership function by adding the element of ‘gamification’, which accumulates points as much as the distance (km) that customers run.
In line with the speed of change in distribution channels, we are actively promoting live shopping and collaboration with online creators. In addition to creating content with fashion influencers such as ‘Kim Hae-in’, ‘Choi Winter’, and ‘Changgu Daddy’, a live broadcast was also held in collaboration with Naver Mr. (Naver’s new men’s shopping select page). New Balance achieved sales of 100 million won within an hour of Labang, and introduced various New Balance classic joggers such as 2002 pre-sale, 996 and 574, and used it as an opportunity to expand New Balance mania.
A New Balance official said, “In digital marketing, speed is life. We produce content optimized for mobile and actively reflect customer comments and reviews in the field. At the same time, offline stores are being renewed so that customers can have a valuable experience.”
△ Is there no variable: need to build a little more premium image
It is true that New Balance has grown rapidly enough to closely follow Adidas Korea, which once surpassed 1 trillion won in sales. However, the evaluation that the premium image is a bit weak compared to other competing brands is a challenge to overcome. Even in Nike alone, there are many attempts to upgrade to a luxury image, such as releasing a limited edition of ‘Dior-Nike’. Although New Balance is also introducing collaboration and limited edition products, some point out that collaboration with a little more variety of luxury goods is needed.
In addition, the external environment is also a variable. The global supply chain problem has already been established as a factor in the existing crisis, and it cannot be ignored that if consumer sentiment freezes due to the aftermath of the US interest rate hike and the contraction of virtual asset markets such as Luna and Terra, a shock wave may come immediately in the consumer goods market.
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