Big Interview: New Balance on connecting the store and eCommerce

Customisation is a hot trend in the retail industry at the moment, from embossing a leather handbag with your initials to designing a personal message on the packaging of a beauty product. Even Boots now offers engraving to customers both in-store and online.

New Balance is no different, it offers customers the opportunity to design their trainers online and in-store, while customisation has made it much easier for amateur sports teams to design their own kit.

The iPad in-store customisation experience is not as popular as the brand would have hoped bringing into question whether it is worth dedicating square footage to the offering in store, when shoppers could be doing exactly the same thing from the comfort of their sofa.

Halladay points out that a lot of shoe manufacturers are offering online and in-store customisation, including competitors such as Nike and Adidas. But she believes New Balance could be doing more to enhance the in-store experience for customers, which is where she believes virtual reality could help.

“I want to deliver something in the store that customers can’t experience elsewhere,” she says. “We have made areas in a couple of our flagships where we can actually assemble shoes, but there’s more that we could be doing.”

Founded over 100 years ago, New Balance is very proud of the fact that its products are still manufactured in Maine in the US, as well as in Cumbria in the UK. But just talking about the company’s history and manufacturing process does not resonate with a 15-year-old kid interested in the brand.

Halladay plans to soon combine manufacturing with customisation by introducing virtual reality into the store to show customers the factory where their personalised shoes are made.

By immersing customers in the manufacturing experience, New Balance hopes customers will engage with its brand values.

“How do we build on that and take the consumer into an experience which reinforces New Balance and how we’re different to other brands?” asks Halladay.

Flagship stores and internationalisation

She plans to test this technology next year in a couple of the brand’s flagships, of which there are seven globally, as well as 200 franchise stores and another seven owned stores.

Halladay, who heads up the retailer’s eCommerce operations, is quick to point out the value of flagship stores for global growth. And the retailer plans to open further stores in Europe going forward.

“We’ve definitely seen an impact on eCommerce sales in the UK, Germany and Italy after opening stores, and we’ve seen the same in Tokyo over the last year.”

New Balance is about to open a flagship in Shanghai, and while it has had a successful Tmall business in China for some time, she is hoping the launch of a physical presence in the region will boost traffic to its direct-to-consumer site, which has been shadowed by the Tmall website.

“We’ll essentially be having a huge billboard in Shanghai,” she says.

The retailer has been working with Salesforce Commerce Cloud to bolster its international eCommerce programme. Halladay describes how the vendor has provided New Balance with a shared technology group which helps to support all of the countries it operates in.

“This means we don’t have to build the technology team in each of the markets,” she explains. “We have local IT people who help us integrate between the systems, but the support, enhancement and extension of eCommerce is handled centrally.”

She explains that to add a site in China would usually require a huge number of people, but working with Salesforce it can just hire a handful of IT experts locally.

“They have a strategy and retail practice team who we consult and for China and Europe it is very helpful to have that expertise to call on,” she says, pointing out that the retailer only has one man on the ground in the UK running eCommerce, because it can call on Salesforce if it needs additional support.

She also describes how being part of a vendor’s community provides huge networking value. “They have the finger on the pulse of all the other companies, who are asking all the same questions. Other companies may be further down the road and we can consult with them because Salesforce can hook us up directly.”

She adds: “Everyone is on the same platform and because it’s in the cloud, everyone is on the same version of the same software, and you’re always current.”

Consumer expectations

But one challenge Halladay’s networking retailers won’t be able to help her with is meeting ever-increasing consumer expectations – because it’s a challenge the entire industry is facing today.

While Halladay believes New Balance is doing a good job at providing exciting in-store theatre and a slick online website, she says she finds it difficult to quantify the halo effect which comes from delivering excellent customer experience.

“If you’re converting at 2-3%, how do you prove the value on the other 98% that come into the store, but don’t buy?”

She says her team has to figure out how to talk to the retailer’s board, not about the 2% conversion, but the 98% of customers impacted by the brand, who came into the store and got some kind of value.

One way she tries to stay ahead of the game is by looking at verticals already disrupted by Amazon and analysing how some brands remain successful five, or ten, years later.

“I think about who has been successful selling books over the last ten years and what are the comparable things we should be thinking about.”