Brand of the Year
In a complicated sneaker landscape, the San Francisco startup has found success by keeping things simple and down-to-earth — literally.
Allbirds made a quiet entry into the sneaker market in 2016, launching its eco-friendly label under the direct-to-consumer model and finding a following among the Silicon Valley crowd. However, the brand turned up the volume this year, transforming from a company with a cult fan base to a leader in sustainable footwear.
In March, Allbirds hit a big milestone, announcing it had sold 1 million pairs of its signature wool sneakers in two years. But co-founders Tim Brown and Joey Zwillinger weren’t resting on their laurels: The same day of that announcement, they had a new eco-friendly product ready to go: shoes made with tree fiber. And in August, Allbirds added another environmental innovation with its SweetFoam soles, which are made from renewable sugarcane sourced in Brazil.
Zwillinger told FN that Allbirds’ relentless investment in research and development is made possible by keeping its greater business model simple. For instance, the brand’s shoe assortment is slim, and transactions are done directly with consumers. “The focus of selling only one shoe in the first 14 months of our business was a real advantage; there was no pressure to constantly change,” added Brown.
However, the company did introduce a new facet to its business in 2018: brickand-mortar retail. With a solid e-commerce foundation already in place, Allbirds opened its first branded stores this year in two of its best-performing regions stateside, New York and San Francisco. The label also opened a door in London along with an online store to support the market.
“It was the first time we launched with both brick-and-mortar and e-commerce. We learned that in some markets, having that physical presence is a statement saying, ‘Hey, we’re here,’ in a much more significant way than just opening an e-commerce platform,” explained Zwillinger.
“They want to create shopping experiences that are most convenient for shoppers. Some prefer to shop purely online, some prefer to go to stores, and some prefer both,” said Warby Parker co-CEO Neil Blumenthal, who serves on Allbirds’ board. “The beauty of a direct-to-consumer business is that they’re able to design all of those experiences for all the customer preferences.”
Moving forward, Allbirds’ expansion will be fueled by $50 million in Series C funding led by T. Rowe Price Investment Management that the company secured in October. (Prior to this, Allbirds had received a total of $27.5 million from other investors, including actor Leonardo DiCaprio.)
Despite its rapid progress, Allbirds (which employs 175 people) is still a small brand in a marketplace dominated by major athletic and designer players. Recognizing this, the company linked up with retail giant Nordstrom on a pair of limited releases this year, including holiday Wool Runner colorways available now exclusively in the department store.
“We felt like the tradeoff was great — Nordstrom gets to share a new, up-andcoming brand that no other retailer gets to showcase, and on the flip side, we get access to and raise awareness with their whole customer base,” Zwillinger said.
But he said there are no plans to further venture into wholesale. Instead, the duo is eyeing additional Allbirds-branded brickand-mortar expansion in 2019. Now that the brand has a physical presence in the U.S. and the U.K, the company has plans for eight more stores next year, with Chicago and Boston set to open in the first half of 2019, followed by doors in Los Angeles and Washington, D.C.
“SELLING ONLY ONE SHOE IN THE FIRST 14 MONTHS OF OUR BUSINESS WAS A REALADVANTAGE.” — Tim Brown