The rise of the rebel brands
Type the brand Allbirds into Amazon and any number of woolly shoes are displayed. None, though, belongs to the San Francisco-based shoemaker whose Merino-wool sneakers began the trend. Joey Zwillinger, Allbirds’ co-founder, grumbles about what he calls the “knock-off” shoes he sees on Amazon. But he says that, since the company first started selling online in 2016, it has avoided the online giant, as well as physical wholesalers like Shoe Locker. That strategy is revolutionary in the global shoe industry, with revenues of $80bn in America alone. The rationale is that by avoiding middlemen, whether online or offline, Allbirds can invest in more sustainable materials that go down well with its rich, techie clientele. It also helps it keep tabs on its customers.
Rather than selling on Amazon, it uses Shopify, an Ottawa-based platform operating in 175 countries that allows it to sell through its own online channels, as well as its physical stores. Yet despite Allbirds’ thirst for independence, Mr Zwillinger is not starry-eyed about the ability of direct-to-consumer (dtc) retailers to resist the gravitational pull of Amazon and other tech platforms. He notes that more than half of all product searches start on Amazon, making it easy to be overlooked (or imitated). Digital advertising needed to start a brand and maintain its popularity is mostly in the hands of a powerful triumvirate of Google, Facebook and Amazon, and its costs are rising. “It’s probably the easiest time in the history of the world to build a business of reasonable size,” he says. Keeping it there is a different matter. “Will a bunch of [dtc] companies be able to overcome the headwinds? The answer is likely to be no,” he says grimly.
Read More at https://www.economist.com/special-report/2021/03/11/the-rise-of-the-rebel-brands