Why Allbirds Is Planting One Foot Firmly In Brick-And-Mortar Retail

Allbirds has always been a somewhat unique company in the world of digitally-native brands attempting to take the world by storm. Its founding duo were not Silicon Valley technologists; one was a biotech engineer and renewable materials expert and the other was a professional soccer player.

But what Allbirds co-CEOs Tim Brown and Joey Zwillinger had in common when they founded their upstart shoe company in 2015 was a shared vision that was different. They didn’t just want to team up to make better shoes — but to be a catalyst for a consumers rethinking their entire relationship to  comfort and sustainability. To bring that vision into reality, Allbirds rolled out its first product, the Wool Runner, a sneaker made out of merino wool.

“We’re not making the materials. We’re finding them,” Brown told PYMNTS in 2017. “And our perspective is that the footwear category has gotten lazy when it comes to using natural or sustainable materials.”

As it turned out, Allbirds became a fairly big success story, as the shoes became incredibly popular with the Silicon Valley developer crowd. Google’s Larry Page was an early fan, as was venture capitalist Ben Horowitz.  And as the buzz around the brand grew, so did its product line. Today one can peruse a a line of Runners, Loungers, Toppers, Breezers and Skipppers on the Allbirds site — all made of wool for slightly different uses, all sustainable and available for men, women and children.

And, as any popular product tends to do, Allbirds has been followed by a host of competitors offering up their own variation of the woolen shoe. Those variations are often a good deal cheaper — and look at a quick glance quite a bit like the genuine Allbirds article — but reviews indicate the resemblance doesn’t get much past the surface.  The shoes aren’t machine washable like Allbirds are, aren’t as well constructed and aren’t sustainable.

But as knockoffs have emerged and as the brand has grown up, Allbirds has sought to expand the nature of the brand, and to create better touch points for the authentic Allbirds experience. That in the past has meant a slow but steady expansion into the world of brick-and-mortar sales that began in San Francisco in on the ground floor of the company’s headquarters. The space as originally conceived has expanded into a more conceptually designed Allbirds shop — meant to not just sell the shoes, but help consumer fully embrace the “Allbirds lifestyle.”

And while Allbirds has been adding stores, the progress has been slow, thoughtful and focused on major U.S. metro areas. To date, there are 14 Allbirds stores in the U.S. open for business, with one more expected to open before the end of the year.

But by the end of next year, according to Allbirds, that figure will have more than doubled. A little over a week ago, Allbirds Co-CEO Brown announced that in the next year the brand will expand to 20 more brick-and-mortar stores.

It’s a big investment in a physical locations for a brand that began it existence as a digital direct-to-consumer (DTC) company. But it’s a jump the brands needs to make, Co-CEO Zwillinger noted. On a practical level, customers do often want to try shoes on just to make sure they fit. But, he said, in the case of goods like shoes the desire to see the product runs deeper than merely establishing the foot can fit inside it.

“We know it’s important to provide customers with a tactile experience to really feel the uniqueness and quality of our product,” Zwillinger said.

Allbirds is far from the only DTC digital brand to have immigrated to brick-and-mortar shops, but as co-CEO Brown noted in an interview with CNBC shortly after the news was announced, the really aggressive push into physical stores in the U.S. and international locations represents a commitment to changing from being a beloved niche shoe brand to a major player in a massive competitive global market.

“We’re in a competitive space in footwear but, look, there’s 20 billion pairs of shoes made a year on average and we’re still very tiny,” Brown said. “We’ve got enormous potential to grow and continue to grow, but to do that we’re going to have to continue to innovate and continue to be good. The retail expansion is part of it, as is international, but at the core for us, it’s about product and it’s about material innovation.”