https://medium.com/@joeyzwillinger/dear-mr-bezos-e691f6d6d705

Two weeks ago Nike pulled their shoes off Amazon in response to knock-offs. Allbirds responded to the same threat by offering up the technologies and processes to make their shoes.

I love this. The most popular Allbirds shoe, a wool runner, sells for $95 and the Amazon knock-off is $30. The shoes look (and probably perform) very similarly and the Amazon version even has 150 four-star ratings. We see this situation played out across categories. So how do you defend?

Allbirds pioneered the use of sustainable materials and processes in shoe manufacturing and have openly shared the technology. If adopted broadly, this works out for the environment and probably works out for them in driving down costs.

All the wonderful things they are doing for the environment aside, it's great marketing. Allbirds started with functional benefits - the wool material provided better comfort and moisture control than synthetics. Functional benefits are easily copied. Style is easily copied. When that happens, brands move up the benefit ladder to own less tangible/less easily copied benefits. It does not always have to be "save the world" environmental benefits, but I use the Patagonia vs. North Face example in class. Same jacket functionally. Patagonia stands for something higher order and meaningful to their target audience and gets to charge $200 more.

I am not advocating the higher-order “purpose” route for every brand. (Yes, please be ethical and do more good than harm, but you can do that privately and not make it your brand positioning). Brands can successfully compete by owning a "lower-order" functional benefit when it is different, better, and compelling to their target…at least until that space is overrun by competition.

The Allbirds brand has fantastic functional benefits and is now leveraging a powerful advantage that creates differentiating value for their target. So, they have competitive protection, can charge a premium, and can extend the brand beyond shoes.

One could argue that Nike has been playing in this space as well. Laddering up to empowerment with powerful advertising. The difference is that Nike is competing with Nike’s (albeit unauthorized Nike’s and fakes) on Amazon. Their choice to leave makes sense given that environment.

For Allbirds, the Amazon knock-off could have been a threat they fought, but instead it is an opportunity they leveraged build their brand. Tip of the cap to Tim and Joey.