Fitness accessories brand Bala started selling its products in 1,382 Target Corp. stores last week, which is its largest retail chain wholesaler to date, says co-founder and CEO Natalie Holloway.
The launch into Target stores was 1.5 years in the making, Holloway says. Since the start of 2023, Bala has sold its products online at Target.com, which was a key component to the in-store launch, Holloway says.
“It’s the reason we are not launching in 200 stores but almost every store,” she says.
Overall, Holloway is excited for Target’s large audience, which will give Bala a reach that paid online media would not allow the brand to achieve, she says.
“For us, Target was always the North Star,” she says.
Overall, for Bala’s businesses, roughly a third of sales are wholesale. A third are from the Amazon marketplace, and a third are from its direct-to-consumer website, ShopBala.com.
“With such a big partnership with Target, next year could look completely different,” Holloway says.
Target is No. 5 in the 2023 Digital Commerce 360 Top 1000.
Influencers promote Target launch
Since Q2 2022, Bala has worked with influencers to promote and sell its products. It calls them ambassadors. The brand has more than 400 ambassadors who use Bala products in their workouts and post about the products on social media.
“We reach audiences we otherwise wouldn’t have,” Holloways says about working with influencers. “It directly impacts our growth. It’s a mini machine of sales people and marketers.”
Influencers receive a coupon code they can share with their followers. Then, the influencers receive a commission on those sales. The commissions range from 5%-10%, says Brooke Konzelmann, Bala’s head of public relationships and partnerships.
For the Target launch, Bala contacted 10 of its highest-performing influencers to post about the launch and promoting the three SKUs that Target will sell in Target’s exclusive color, Ocean. For example, a mom posted a workout routine of how to use Bala’s products for a post-partum Pilates workout, and then linked to the products to buy on Target.com.
Bala’s profit margins are typically higher if shoppers buy directly from them versus a wholesaler. But this isn’t always the case, Holloway says.
“These days, customer acquisitions costs are so high,” she says.
In fact, 59% of retailers rank costs/profitability of campaigns as their biggest marketing challenge, according to a Digital Commerce 360 survey of 97 online retail marketers in May 2023.
So, while shoppers may spend more money on Bala products when shopping directly on shopBala.com compared with a wholesaler, Bala still has to factor in the cost to get that shopper to its direct-to-consumer website. It doesn’t have to factor that cost in for its products sold at Target.
Balancing sales channels
But to survive as a business, Bala needs both wholesalers and direct-to-consumer, she says.
Digitally native brands have historically focused on sales through their direct-to-consumer websites. But like Bala, more have diversified into selling in other channels. Of the 80 digitally native, vertically integrated brands Digital Commerce 360 ranks in its Top 1000, 42 of them sell on a marketplace.
Overall in 2023, Bala plans to sustain the large growth its had during the pandemic. Its goal is to continue to have sales growth in 2024, Holloway says.
For sporting goods retailers in the Top 1000, online sales as a category grew 0.04% in 2022. That’s well below the Top 1000 growth rate of 5.1%, according to Digital Commerce 360 Research.
“Target is going to play a huge role in that growth because if the partnership goes well, Target will easily be our biggest retailer,” she says. “And then, sky’s the limit.”
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