Latest / The Marketing Funnel Podcast with Fexingo: Awareness, Interest, Decision, and Action Stages / How Allbirds Marketing Funnel Struggled After IPO
Transcript
- Lucas: So Allbirds went public in 2021 at a valuation pushing four billion dollars. Today, mid-2026, it's hovering around three hundred million. That's not a crash — that's a nearly ninety percent erosion of market cap in five years. And the story behind that number is, I think, one of the most instructive marketing funnel breakdowns we've covered on this show. Luna: I remember the IPO hype. Every investor presentation was about the 'sustainable footwear revolution.' What happened? Lucas: Right, so Allbirds nailed the awareness stage. They had this incredibly simple hook: 'the world's most comfortable shoes, made from natural materials.' Wool runners, tree dashers, all with that minimalist design. They got written up in every tech and fashion publication. Celebrities wore them. The brand became synonymous with 'eco-friendly sneaker.' That's top of funnel done right. Luna: But awareness alone doesn't pay the bills. How did the interest stage hold up? Lucas: That's where the cracks started. See, Allbirds' interest stage relied on people caring deeply about sustainability. pre ipo, that was a differentiator. By 2023, every competitor — from Nike with its 'Move to Zero' line to tiny startups like Cariuma — had an eco-angle. The unique selling proposition became table stakes. So potential customers went, 'Okay, these are sustainable. So are ten other brands. What else?' Luna: And Allbirds didn't have a strong answer. Their product line stayed narrow. They had the wool runner, the tree dasher, a few other styles. No real innovation in performance footwear. Lucas: Exactly. They tried expanding into apparel — those $100 wool t-shirts and $120 jackets — but that stretched the brand thin. The interest stage requires you to deepen the narrative, not just broaden it. Allbirds kind of plateaued. They had the initial curiosity, but then what? Luna: Which brings us to the decision stage. This is where I think the metrics tell the real story. Lucas: Yeah. pre ipo, Allbirds had a conversion rate around twelve point seven percent — very high for DTC. By late 2024, that had dropped to roughly eight point two percent. That's a thirty-five percent relative decline. Why? Because in the decision stage, shoppers compare. They read reviews. They look for durability, comfort for running, things like that. And Allbirds started getting hit on performance. The shoes were comfortable for walking, but not great for sports. The soles wore out faster than competitors. Once the sustainability halo faded, the product itself had to carry the decision — and it didn't. Luna: So the funnel broke. But they're still around. What are they doing to fix the action stage? Lucas: They're pivoting hard to wholesale and retail. In 2025, they opened twenty new stores in the US and started selling through Nordstrom and REI. The idea is that physical touchpoints rebuild trust and let customers feel the product. It's a classic 'if you can't convert online, put the product in front of people' move. But it's expensive. Their cost of acquisition actually went up because retail leases and staffing are pricey. Luna: Interesting. So the action stage now is about literally putting shoes in people's hands. But is that enough to revive the funnel? Lucas: I think the jury's out. They reported a net loss of eighty-two million dollars in 2025. Revenue was flat at about two hundred fifty million. The wholesale channel grew fifteen percent, but online direct to consumer dropped twelve. So they're trading one problem for another. The real question is whether they can rebuild the interest stage around a new story — maybe performance innovation, maybe a sub-brand for athletes. They tried a 'M0.0NShot' running shoe in 2024, but it got mixed reviews. Luna: It sounds like the classic DTC trap: great at getting attention, not great at keeping it. And once the novelty wears off, you need a deeper moat. Lucas: Exactly. And that's the lesson for any marketer listening. The awareness stage can get you funded and hyped. But if the interest and decision stages aren't fortified with real product differentiation and a compelling narrative beyond the initial hook, the funnel collapses. Allbirds isn't dead — they have a loyal base, maybe a hundred thousand repeat customers — but they're a cautionary tale. Luna: And a reminder that sustainability alone isn't a strategy. It's a value. You need the product and the experience to back it up. Lucas: Right. I think their best move now is to lean into the wholesale data. If they can figure out which products sell best in-store and iterate from there, they might find a new groove. But it's a long recovery. Luna: Quick honest thing — a handful of listeners chip in monthly through buy me a coffee dot com slash fexingo, and that's literally what funds making this many episodes ad-free. If these marketing deep dives have sparked something you've actually used at work or just found interesting, that support is what keeps the lights on. No pressure, but it's real. Lucas: Yeah, it's a small group, and we're grateful. It lets us stay independent and dig into stories like this one without worrying about ad revenue. Luna: So back to Allbirds — one thing I'm watching is whether they double down on their core footwear or try another apparel pivot. What do you think? Lucas: I think they have to double down on footwear. Their apparel line never broke ten percent of revenue. They need to own one category before expanding. Maybe a performance sub-brand, like 'Allbirds Sport,' with proper cushioning and durability claims. That could reignite interest and give the decision stage something new to evaluate. Luna: That would be a big bet. But if they can nail it, they might rebuild the funnel from the middle out. Lucas: Exactly. It's not impossible. But it requires admitting the old story isn't enough.