How New Balance Became #3 Sneaker Maker

A reporter interviewing me this week posed this question: Since spending in most categories declines after 50, why should companies shift more attention to this age group?

Good question.

Statistically speaking, consumer spending peaks around 48. However, total consumer spending is declining among 25-44-year-olds whose numbers are falling by 4.3 million in this decade.

In contrast, the 45-64 population is mushrooming by 16 million consumers – more than enough population growth to offset per capita declines in spending by the 50+ crowd.

Many companies resist pursuit of older markets out of fear that associating a product with older people is the kiss of death among younger consumers. This is where the idea of ageless marketing comes into play.

Ageless marketing, masterfully executed by New Balance and Harley-Davidson, extends a brand’s reach across generational divides by mirroring universal values rather than age specific values.

New Balance’s ageless marketing approach propelled it from #12 among sneaker makers in 1990 to #3 by 2003. While Nike, Reebok and Adidas saw sneaker sales in the U.S. decline between the mid-1990s and 2002 due to population shrinkage in younger markets, New Balance averaged 25% annual growth. Notably, its market share in youth markets grew while its bigger competitors' share of younger markets declined.

The “numbers” leave no doubt. The best chances for sales growth in most consumer product lines lie in older markets where spending in 2010 will be $1 trillion more than in younger markets – $2.6 to $1.6 trillion.

So why are so many companies (and marketers) ignoring these facts?

Comments

[Hasan]

I read your post and wihesd I'd written it