The balance of power in the sneaker industry is shifting as heritage brands like Nike and Adidas face new challenges from upstarts. While newcomers like Hoka and On Running are gaining market share, Allbirds – one of the original disruptors in the category that sells directly to the consumer – is struggling with declining sales. Now the company is trying to turn things around with a revamped marketing strategy.
Founded a decade ago, the San Francisco-based company initially gained popularity thanks to its comfortable designs and a sustainability-focused corporate philosophy. Allbirds was once considered the “it shoe” of Silicon Valley, but it saw a turnaround after an IPO in 2021 and expansion into retail. Net sales fell 26.8% in the second quarter of 2024, partly due to the closure of 10 stores, although the company was able to narrow its losses.
Allbirds has made leadership changes this year, promoting Chief Operating Officer Joe Vernachio to CEO in March and appointing new product leaders. The company has introduced new shoe styles that are gaining traction with consumers. The latest product, the comfortable, minimalist Tree Glider, is the biggest launch in the line and a key building block of a return to stronger brand building that will kick off a larger “Allbirds by Nature” platform.
Kelly Olmstead, CMO of Allbirds
Permission granted by Allbirds
An advertising campaign launched Tuesday in partnership with Sid Lee USA has a dreamy quality, as people walk around in tree gliders before soaring into the air. The message emphasizes the dual meaning of “nature” in reference to both the earth and intrinsic human qualities. A partnership with Melissa Wood-Tepperberg, a wellness influencer and founder of Melissa Wood Health, rounds out the effort.
“We look forward to building a platform that, through consistency, iteration and investment, can hopefully carry us for the next five years and beyond,” said Kelly Olmstead, who took over the title of CMO at Allbirds in December.
Olmstead’s previous roles include nearly two decades at Adidas, where she led brand, retail and digital marketing for North America. Below, Marketing Dive spoke with the executive about building a cult following through customer relationship management (CRM) and what marketing tactics are catching her interest this year.
The following interview has been edited for clarity and brevity.
MARKETING DIVE: You have been in the role of CMO for almost a year now?
KELLY OLMSTEAD: We’re in the middle of this brand reset. I came in as a contract worker and wasn’t sure if I should go back to a shoe brand. I came in and immediately fell in love with the people here and the spirit, we often say, “High horsepower, low ego.” That really disarmed me. I stayed because I believe Allbirds is poised for a strong comeback.
One of the things that struck me from the beginning was this perfect storm of opportunity. We have an incredibly high (Net Promoter Score). Coming from this industry, an NPS of over 90 means that the people who know us love us. But we have a very low and consistent awareness of about 15-17%, which is hard to increase. It’s about telling more people about the brand and getting more people to try us.
What was missing in the previous marketing strategy that did not connect these points?
We’re nine years old. Marketing takes time. What I’ve really enjoyed doing with Joe (Vernachio), (Chief Design Officer) Adrian (Nyman) and our agency partner Sid Lee USA is developing a campaign and a platform that will last. It’s broad enough to highlight great products and what makes them special, but can also tap into that more sophisticated brand space. People who choose Allbirds are consciously choosing something that’s less well-known. It’s kind of counter-culture, not mainstream.
How have the cross-organizational aspects of the brand changed since you joined? Were there more silos in the past?
Joe was with the company for a number of years. When he took on the CEO role, he brought with him a wealth of knowledge, not just from Allbirds, but from Mountain Hardwear, The North Face, and Nike. He’s done it all. He’s not necessarily a CEO by trade. With this whole “high horsepower, low ego” idea, he’s really tried to break down silos. I can’t say what it was like before, but there’s definitely a spirit now where we’re all on the same page and have a clear plan.
These are challenging times for business. How are you managing to reconcile the launch of this new marketing with this economic crisis?
A lot of great work has been done to make Allbirds more operationally healthy. I sense that not only the leadership team but also the board is willing to invest in the brand. They believe it has the potential to be a 100-year brand. That means changing how we market and the KPIs we look at. I’ve worked at some brands that have been around much longer and I know how to weather storms and downturns.
The balance between brand building and performance marketing is a larger topic I’ve covered. Allbirds is DTC by nature. How does the company think about media differently?
There have been changes in operations. Performance marketing used to be part of e-commerce, now it’s part of marketing. We were able to look at the performance of assets and stories and react to that to do the best work. That was a huge advantage.
There’s a more modern way to look at a platform, whether it’s YouTube, Netflix or even TikTok: it’s meant to entertain and give the consumer something of value to grab their attention. Otherwise, they’re done in 3 seconds. We hope to articulate the Allbirds story that’s unique, not something you get in 3 seconds. We’re looking for longer format content where Allbirds might not be the first thing you see, but hopefully you get a lot of value from what we put forward.
You mentioned some platforms, such as Netflix and TikTok. Do you advertise on these platforms?
With this latest campaign, we’re on YouTube. We’re on TikTok and all over social media. What’s coming in Q4 isn’t finalized yet, but we’re looking at what the right platform is to build a more compelling story for Allbirds. In footwear, it’s such an emotional purchase and there’s so much thought that goes into the purchase that you have to make the effort.
It’s an interesting time for the footwear industry in general. Nike and Adidas are both battling challenger brands. Do you see yourself as part of that group?
Absolutely. Allbirds was one of the first to come to market and make a splash. I was sitting at Adidas and I was like, “Who are these guys?” Allbirds was really at the forefront of challenging the big guys in a way where they walked the talk. Very few brands share some of the secrets that make them great. That was my first exposure (to Allbirds). We did a collaboration between Allbirds and Adidas on what was then the most sustainable shoe on the market. Allbirds helped create a real opportunity.
I think you can categorize footwear into streetwear, sports performance and comfort. Is there any of these areas, or a mix of them, that you think Allbirds should have a bigger stake in?
In recent years, we have pushed sustainability hard because we are a leader in this area. The Allbirds by Nature campaign recognizes that nature is a much bigger and more demanding position.
“Effortless by nature” is the line we associate with the Tree Glider. You see this maximalist, exaggerated visualization technique (from other brands). The Tree Glider is really interesting because it’s comfortable, but it has the confidence of not having a flashy logo. That was a conscious design choice from the beginning. There’s a real opportunity to create a more sophisticated version.
Tell me more about your relationship with Sid Lee. Is this your first work for you?
That’s it. Joe and I both had a relationship with Sid Lee before. We brought Sid Lee on board and it was a real collaboration. When we came to “by nature,” it was so simple, but it has a lot of scope. You can articulate product benefits, aspirational human benefits, style benefits. That’s the consistency we need. We’re too small to be telling different stories all the time.
We are in the middle of the school year starting and the holidays are just around the corner. What are your plans for the second half of the year?
The launch of the Tree Glider will be our biggest push, certainly since I’ve been here. We’re excited to be back on streaming, TV and real awareness channels to articulate what Allbirds is about in a more distinctive, distinct way. In Q4, we’re looking for deeper stories to tell and maybe more longer-form content in addition to everything we’re doing on social and digital and retail and with influencers. We think we’ll be telling that story well into Q1. We see this as a first step and hope to be in the right rhythm in terms of marketing and investments by Q3 of next year.
Is there anything new tactically or technologically that you are particularly looking forward to in 2024?
We haven’t been able to use awareness-building efforts yet, so partners, influencers, awareness channels. It’s certainly not a new tactic, but it’s something we haven’t invested as much in. For the Tree Glider launch, we worked with Melissa Wood-Tepperberg. I don’t think she works with brands she doesn’t truly believe in because her credibility is on the line.
We have a pretty exceptional CRM program (C360). It offers the ability to get a picture that is almost too clear. More data is not necessarily better. We recently hired new team members who have helped us develop a solid strategy to achieve this and set priorities. They are thinking about how we can use personalized marketing and CRM much more to offer customers the right products at the right time.
