Allbirds, the sustainable sneaker brand once the de rigueur shoe for Seattle and Silicon Valley Techs, has sold its assets and intellectual property at a shocking discount. The once high-flying sneaker brand has finally lost its wings.
This is not a surprise. For the last four or five years, Allbirds has been struggling. Allbirds has been constantly selling on deal.
Four years ago, I wrote about Allbirds:
“According to The Wall Street Journal, Allbirds, once a Silicon Valley startup footwear brand, has ‘lost its way.” Allbirds lost its way by looking beyond its core base; by coveting others at the expense of Allbirds’ lovers.”
Allbirds violated or fell for three brand management tendencies, which caused trouble. What is remarkable is that Allbirds has not been able to break its downward spiral. Rather, everything Allbirds has seemingly put into place has exacerbated its vicious vortex into the void.
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Ignoring The Core
Allbirds embraced one of the most damning tendencies for trouble: ignoring the core. To boost sales, Allbirds designed products that would appeal to younger, edgier customers. The designs did not reflect the brand promise. In fact, the brand promise fell to the wayside. Allbirds expanded beyond shoes into clothing, not all of which was quality.
In its review of the recently remarkable Allbirds’ sale, The Wall Street Journal reported,
“… nothing could replicate the success of its first shoe. The company lost focus, unsure if it was selling to sneakerheads or soccer moms. Loyal customers like the Silicon Valley crowd dropped the brand.”
No question: ignoring a basic brand principle – adore the core – is death-wish marketing. Of course, a brand needs new customers. But savvy marketers know that the goal is to attract new customers while maintaining the base of brand lovers.
Keep the brand-business core strong. A brand’s core must be continually re-energized, protected, and strengthened. It is the brand core that will profitably finance a turnaround, keep a brand-business growing, and provide a platform for the future. Ignore what core customers love about your brand-business at your peril.
Core customers already know what makes a brand great. When a brand expands beyond its core group, it risks losing that group. When this happens, the goal must be to restore and repair the core customers’ relationship to the brand-business. It is imperative to reinforce what core customers like about the brand. Encourage core customers to frequent the brand more often.
Customers Do Not Like Making Compromises
Allbirds appears to have followed the mantra that people will pay more for products that save the planet. People are just not that self-sacrificing. Customers do not want to trade-off between planetary sustainability and personal sustainability.
We may want to save the planet. We may believe in sustainability. But, for most people, when faced with the premium associated with eco-friendliness, we are pragmatic. Especially when we look at non-essential offerings, we have other criteria under consideration when making a purchase. Surprisingly, this tendency for trouble is also why Beyond Meat has been burning on the grill for years.
A research study cited in The Guardian showed that even when people learn that huge reductions in meat consumption are essential for climate-change avoidance, people are reluctant to change behaviors when the environment is “the sole beneficiary.” Self-interest overcomes altruism. A different study from Purdue University shows that even when confronted with information about meat’s carbon footprint, people still prefer meat over plant-based alternatives.
A food analyst at Mintel, a global market research company, said, “Awareness of the impact of meat on climate change is expected to underpin long-term demand, although products featuring more natural vegetable and vegetarian proteins, such as chickpeas and lentils, were likely to lead growth as consumers sought more transparency and reassurance about the origins of ingredients in vegan ready meals.”
What-does-this-mean-for-me must be addressed. Regardless of environmental impact, unless the deleterious effects are on the level of Love Canal, we tend to purchase based on other, more functional criteria.
(NB: During the late 1970s, it was discovered that over 21,000 tons of toxic industrial waste buried by Hooker Chemical had leached into basements and playgrounds, forcing the evacuation of hundreds of residents. Between 1942 and 1953, the company buried 22,000 tons of toxic waste, including carcinogens and pesticides. Love Canal, a working-class neighborhood in Niagara Falls, was built over a 16-acre chemical landfill. Chemical residues in the soil caused high rates of health issues, including burns on children and miscarriages.)
The Wall Street Journal reporting on Allbirds agrees that we put many purchase conditions at the top of the list before considering the environmental results: “The premise that consumers would pay a premium for sustainably made products turned out to be flawed.” Quoting a research director at a global firm, The Wall Street Journal reported:
“Sustainability comes way down the batting order behind factors like style, price, and comfort. Allbirds could have leaned in on any of these things alongside its green credentials, but largely chose not to do so.”
Tesla owners may have said that eco-consciousness and planet-saving were key factors in their purchase, but not having to pay for gas was probably a leading economic factor. Style, technology, and hands-free probably also were survey answers. Image was certainly a purchase reason according to JD Power surveys. Even if I am not that committed to environmental realities, owning a Tesla can make me seem like an eco-warrior. Sadly, there is a real difference between being seen as eco-conscious and actually being eco-conscious.
Patagonia continues to thrive on its sustainability heritage. However, Patagonia never loses focus on its die-hard, outdoor enthusiasts. Furthermore, its environmental programs, initiatives, financial structure, and overall activism have grown, not waned, since its founding.
Real Loyalty Is The Basis For Enduring Profitable Growth
To be considered fair value and not be perceived as cheap, brands must avoid excessive marketing communications that emphasize price as the reason to buy. Allbirds was always on sale. Allbirds ignored the truth that building deal loyalty does not build brand loyalty. Deal loyalty is not real loyalty. Brand loyalty cannot be bought with bribes. When you lure customers with incentives, you make them loyal to the deal rather than the brand. If there is a better deal elsewhere, deal-loyal customers are out your door and in through the competitor’s door. If a customer does not prefer your brand’s experience, then making it cheaper and easier will not build brand strength. Allbirds lost experience preference to On and Hoka.
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Occasionally reminding people that a brand is affordable is important. But excessive emphasis on price alone destroys real loyalty and builds deal loyalty. Instead of the dominant message being about price, to revitalize a brand, the new communications emphasis needs to be on brand-relevant differentiation. Tell customers this is a great brand at a great price, rather than just saying it’s a great deal.
Deals upon deals also frustrate customers. When a customer buys the deal at 20%, and the next week it’s 50%, there are a lot of irate customers. With Allbirds, one never knew whether today’s deal was THE DEAL or not. Should I wait until next week to purchase? Customers knew enough about the Allbirds’ fire sales to know that tomorrow the offerings could be marked down even more than today.
For enduring, profitable growth, the aim is to have loyal customers who feel so strongly about the brand that they will choose it even if their second-choice brand is cheaper. Allbirds began with this gift, but blew it after a few years. Here is a fact: brand preference is the tightest bond of loyalty. Strategies must reflect earning loyalty. Brand preference requires investing in new ways of relating to brand enthusiasts. This never seemed to happen at Allbirds.
On the flip side, it is critical to understand the brand rejectors. These once loyal individuals moved to On and Hoka. Why?
It is possible that the team buying distressed Allbirds could resuscitate the Allbirds brand. Perhaps, with brand-building-based strategies, Allbirds can become a Phoenix.
Contributed to Branding Strategy Insider by Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
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