Allbirds Co-CEO Joey Zwillinger, who's also a co-founder of the sustainable shoe and apparel brand, is trying on an old-school strategy as the company works to get more shoppers into its stores.
The head of the maker of all-wool footwear popular among Silicon Valley executives plans to walk back the company's once-aggressive brick-and-mortar expansion strategy. But rather than completely throw in the towel on physical retail, Zwillinger said during a recent call with investors, that stores never have been a more important part of the company's long-term growth plan.
When it comes to targeting a mix of shoppers, including those that order both in-store and online, Zwillinger said that "we continue to view stores, both owned by Allbirds and leveraged through third-party partnerships, as critical to reaching new customers and increasing penetration of valuable omni-channel customers, our most profitable customer journey. However, we must drive more foot traffic to our stores and increase engagement once shoppers enter our four walls."
To do so, the footwear executive said Allbirds will invest more in marketing its existing store portfolio, specifically targeting those customers that straddle the border between in-person and online shopping. Allbirds plans to open three stores this year, down from nearly 20 in 2022.
"Our stores are not only the best expression of the Allbirds brand, but are a fantastic customer acquisition tool, all while delivering strong four-wall economics," Zwillinger said. "These stores operate as billboards and generate awareness within the region that we're in. So all of that is incredibly important for the business model overall."
The San Francisco-based retailer failed to post year-over-year quarterly sales growth for the first time in its history for the final three months of 2022, which company executives attributed to style missteps, a disappointing holiday season and poor marketing investments that led the retailer to miss expectations.