Cool, Comfort And Ecology — The Allbirds Secret To Retail Success

Claiming to have the “world’s most comfortable shoe” is a big statement. There are a lot of sneaker manufacturers out there ready and quite willing to dispute that assertion.

But Allbirds isn’t quite your average shoe company.

Their fanbase — though smaller than, say, Nike’s — is both very dedicated and rather well-known, particularly if one happens to hang out in Silicon Valley with Google’s Larry Page or venture capitalist Ben Horowitz. Their shoes are also a bit different, insofar as they are made from merino wool, which is both softer and more renewable than most sneaker materials out there on the market.

“We’re not making the materials. We’re finding them,” Allbirds Co-CEO Tim Brown said. “And our perspective is that the footwear category has gotten lazy when it comes to using natural or sustainable materials.”

Brown comes to entrepreneurship through an interesting channel. Before founding Allbirds in 2015 with Co-Founder and Co-CEO Joey Zwillinger, a biotech engineer and renewable materials expert, Brown was a professional soccer player in New Zealand.  They released their first product — the Wool Runner — in March 2016, and just about a year later their second shoe came to market: a slip-on called the Wool Lounger. The merino wool blend they use is proprietary, and the price tag for one pair is $95. That’s not cheap, of course, but it’s far from outside the realm of sneaker pricing (one would be hard-pressed to find a pair of Air Jordans for less than $100).

And, according to their founders, the goal is more than just selling shoes, but beginning a lifelong relationship built around comfort and sustainability.

“We’ve tried to make it as affordable as we can. The most important thing for us is to have an interaction with every customer we exchange a product with money for,” Zwillinger noted.

But those kinds of interactions are hard to generate when one’s entire relationship with a consumer is carried out digitally. Though the company has built its dedicated and cult-like following via direct eCommerce sales to consumers, Allbirds is finally stretching into real world, brick-and-mortar commerce.

Slowly and carefully.

Last year, right around the release of the Wool Loungers, Allbirds opened up their first physical location in San Francisco on the ground floor of their headquarters. In July, they rolled out a pop-up shop in Los Angeles’ Grand Central Market. But their big upcoming move is the launch of their new retail location: a “concept” store that is designed to let customers really embrace the Allbirds lifestyle.

That experience, when it comes to the New York location in the ultra-trendy SoHo neighborhood, includes a human-sized hamster wheel, where shoppers can test out running in the sneakers before they buy them, and a series of custom shoelaces inspired by New York’s subway system, among other experiences.

“We know it’s important to provide customers with a tactile experience to really feel the uniqueness and quality of our product,” Zwillinger said. “Being in SoHo makes our brand experience accessible to New Yorkers and also visitors from around the country and world. This is just the start of things to come in the physical space from Allbirds.”

The hope is to open two more physical stores in the U.S. in the coming year.

That expansion will be funded in part by the $17.5 million Allbirds snapped up in Series B funding earlier this year — care of Tiger Global Management, Elephant, Lerer Hippeau Ventures and Maveron. Allbirds’ total funding comes to $27.5 million.

Apart from expansion, a large portion of the funds will go toward research and development, as Allbirds plans to extend its line of renewable uber-comfortable shoes with a wider range of materials. The CEOs said they were looking outside the range of materials typically found in footwear, though they had no comment on what those might be or when they might be released to market.

Though their business has exploded as cool kids nationwide have embraced their shoe vision, Allbirds is a firm that is remarkably committed to taking it slow. The 50-person operation declines to share how much revenue it brings in or what its valuation to date is, but, according to Brown, they have been profitable from the word “Go” and intend to stay that way.