You Know Allbirds is Failing?

Every step you take leaves a mark - on the ground and the planet. That’s the belief Allbirds built their brand on 😮 They weren’t just selling shoes.

They were selling a cleaner future, one pair at a time. For years, Allbirds was the brand everyone talked about. Celebrities wore them, Silicon Valley loved them, and customers could not get enough of their sustainable wool sneakers.

But even the most loved brands stumble :(

Allbirds went from being the darling of sustainable fashion to facing declining sales and growing competition. The question is not just what went wrong.

How can something that once reshaped the industry find its footing again?

It's time that we study the ins and outs.

Let's go!

Allbirds, a global footwear and apparel brand known for its eco-friendly products, has changed how people see sustainability in fashion. Tim Brown and Joey Zwillinger launched it in 2016 to create comfortable and stylish shoes that are kind to the planet.

Over the years, Allbirds has grown into a billion-dollar company attracting people through its innovative approach to sustainability and direct-to-consumer (DTC) sales model.

As of 2024, the company continues to evolve, making its way into product development and brand awareness.

STP Analysis

Segmentation

Allbirds uses demographic, psychographic, and behavioral segmentation to reach its audience. It focuses on eco-conscious consumers, both men and women, primarily in urban areas, between 18-44 years old, who care about sustainability.

These consumers are middle and high-income earners ready to invest in premium, eco-friendly products. The brand also targets consumers interested in comfort with everyday wear shoes and apparel.

Targeting

Allbirds targets environmentally-conscious millennial and Gen Z shoppers. The brand has captured the attention of those living in urban areas, especially in the U.S., Australia, and Europe, where the demand for eco-conscious products is growing.

The brand also targets athletes and outdoor enthusiasts, as it provides performance-based footwear without compromising on environmental impact.

Their focus is also on customers who value transparency, with an emphasis on clear communication about the materials used in their products.

Positioning

Allbirds sees itself as The World's Most Comfortable Shoe and sustainable choice for people who want comfortable, stylish, and environmentally friendly footwear.

Their marketing message centers on Better shoes. Better world. Through this messaging, Allbirds emphasizes sustainability without sacrificing comfort or style. And this makes it a premium, eco-conscious choice for everyday footwear.

SWOT Analysis

Strengths

• Allbirds' commitment to using renewable materials like merino wool and eucalyptus fiber resonates well with eco-conscious consumers. This focus on sustainability has earned the brand a loyal customer base.

• The brand's clean, minimalist aesthetic and commitment to environmentalism have built strong brand recognition.

• By selling directly through its website and physical stores, Allbirds controls the customer experience, leading to better margins and a deeper connection with customers.

Weaknesses

• Allbirds’ products are priced higher, with shoes ranging from $95 to $145, than many footwear brands. This might limit its reach to price-sensitive customers.

• While Allbirds has expanded its offerings, the brand is still limited to footwear and a small selection of apparel. This narrow product range could hinder growth in a highly competitive market.

Opportunities

• Allbirds can increase its product offerings, like outdoor gear or accessories, to address a larger customer base.

• While the brand is present in key markets like the U.S. and Europe, there is potential for growth in Asia and other developing markets where sustainable fashion is gaining popularity.

• Collaborating with other sustainable brands or influencers could help Allbirds reach a broader audience.

Threats

• Established brands like Nike and Adidas are investing more in sustainability. That threatens Allbirds’ market share.

• High inflation and economic downturns could impact the purchasing power of Allbirds' target audience, who may choose lower-cost alternatives.

Marketing Mix

Product

Allbirds' products include footwear and apparel made from natural, sustainable materials like merino wool, eucalyptus fibers, and sugarcane.

The team designed Allbirds products to be comfortable, stylish, and eco-friendly. This focus on sustainability sets Allbirds apart from other brands. The products are simple yet elegant, with a minimalist design that attracts people who want eco-conscious fashion.

Allbirds’ most famous product, the Wool Runner, uses merino wool sourced from sustainable farms. The company has also committed to using only renewable materials in all its products.

Price

Allbirds uses a premium pricing strategy. It means their products are priced higher than some other brands, but customers are willing to pay more because they are made from eco-friendly materials and are designed for comfort.

For example, their shoes range from $95 to $145, which is higher than many traditional shoes but reflects the value of sustainability and high-quality materials. This shows that people are willing to pay more for eco-friendly and comfortable products.

Place

Allbirds uses a direct-to-consumer (DTC) model, which means the brand does not deal with retailers. Therefore, it sells its products in its online and physical retail stores. It is present in over 30 retail locations in key cities across countries.

Here’s a glimpse of Allbirds Shanghai store:

It also has a strong e-commerce presence, which makes it easy for customers to buy directly from their website. It is now also available in some parts of Asia.

Promotion

Allbirds promotes its brand and products in several ways, primarily focusing on digital marketing, partnering with eco-conscious influencers, and sharing stories about the environmental benefits of its products.

Here, Allbirds collaborated with Uber Eats. But WHY?

allbirds

View more on Instagram

The brand also uses social media platforms like Instagram to show its products, tell its sustainability story, and build a community of loyal customers.

Sometimes , Allbirds also do giveaways like this:

allbirds

View more on Instagram

And it promotes:

Allbirds' social media presence has been a huge success, with millions of followers across socials, where the brand share updates on new products and sustainability efforts.

For example, here’s a post that hints its new product:

Numbers

• In Q2 2024, gross margin rose by 7.7 percentage points to 50.5%, up from 42.8% in Q2 2023. In Q3 2024, the gross margin increased slightly to 44.4%, compared to 43.5% in the previous year.

• In 2023, Allbirds reported a 14.7% drop in net revenue, reaching $254.1 million compared to the previous year. In Q3 2024, revenue decreased by 24.9% to $43.0 million, down from $57.2 million.

• In Q2 2024, revenue fell by 26.8% to $51.6 million year-over-year. Once valued at over $1 billion, Allbirds' stock fell significantly, trading below $1 in 2023.

Final Thoughts

Allbirds has changed sustainable fashion with its eco-friendly products and innovative approach. Despite facing financial challenges, the brand's commitment to sustainability and strategic restructuring shows its potential for recovery.

As the global demand for sustainable products continues to grow, Allbirds has the opportunity to regain its position as a leader in this space.

What do you think? Can Allbirds convert its current challenges into a stronger brand that drives both profit and purpose in the future?