Digitally Native Allbirds Doubles Down on Brick-and-Mortar Expansion

As traditional retailers continue to close doors, digitally native Allbirds is banking on a larger brick-and-mortar presence to expand its business.

The San Francisco-based shoe startup seeks to more than double its fleet of physical locations next year, announcing plans to open 20 outposts. The move would bring its store count to roughly 35, according to The Associated Press. FN has reached out to Allbirds to confirm the planned number of store openings.

Beginning its store expansion in 2018, Allbirds now has 12 locations around the world — from New York City, Los Angeles and Seattle in the United States to Auckland, New Zealand, and London abroad. The brand has also moved into the Chinese market, launching an outpost in Shanghai’s Taikoo Hui shopping mall as well as teaming up with e-commerce giant Alibaba to sell products on its Tmall platform.

Despite the successes of Allbirds’ digital arm, most footwear and apparel sales still occur in stores. According to analytics firm First Insight, 71% of consumers typically spend more than $50 at brick-and-mortar stores, compared with 54% of customers who shop online.

Additionally, physical spaces allow curious customers to learn more about a brand’s products — an advantage for Allbirds with its roster of innovative environment-friendly materials, such as tree fibers and renewable sugarcane. In an email to FN, the company noted that all of its U.S. stores have reached profitability within the first two months of opening.

“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,” Joey Zwillinger, who co-founded the startup with Tim Brown, told FN in December.

Entering the sneaker market in 2016, Allbirds built its business as an eco-friendly label under a direct-to-consumer model. The company — named FN’s Brand of the Year in 2018 — quickly found a following among the Silicon Valley crowd and high-profile celebrities, selling its millionth pair of signature wool sneakers in March.

Even as it turns up the volume, the brand has managed to stay true to its sustainable roots, starting with shoe delivery: Its sneakers are packed in a double-duty box that works for both shipping and storage. It had also imposed a carbon tax on itself to offset the emissions it generates on each pair and is working to remove the remaining virgin plastic in its supply chain.

“We decided early on that we didn’t want to spend this huge chunk of our lives on a small business that didn’t have impact,” Zwillinger told FN last April. “We wanted to have a purpose-driven entity.”

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