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Allbirds CEO on Amazon's copycat strategy

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Re: Allbirds CEO on Amazon's copycat strategy

#71

Post by helen___keller »

dfcagency wrote: post #62
helen___keller wrote: post #7

Allbirds is a luxury brand. Retailers offer cheap versions of luxury brands. There's little surprise here. Should Ray-Bans complain that Walmart offers sunglasses that look nearly identical at a tenth of the price? Amazon has plenty of dodgy business practices, but I don't think this is one of them.

The bigger problem here is that Allbirds ISNT a luxury brand. They've drank the Silicon Valley cool-aid of growth above all else, the "reforge" growth-hack school of tips and tricks to optimize conversion rates and customer retention, without actually building a storied brand - which is what a real luxury brand is (see: LVMH's holdings, Hermes, or more recently Aesop). There's no storied history, hell - their LOGO is…

> The bigger problem here is that Allbirds ISNT a luxury brand.

Sure, perhaps I should have said they price themselves like a luxury brand (or something above commodity pricing but below luxury? I'm not an expert on this stuff)

From their marketing on sustainability, and their prices, it seems to follow to me that they probably have a high markup and don't ruthlessly cut corners to survive on a tiny margin at brutally low prices.

> By the way, your analogy of sunglasses is flawed - those cheap sunglasses look, feel, and function cheaply.

Admittedly I wrote my post under the assumption that Amazon's generic wool runners probably feel cheap in one way or another from having cut some corners to lower production costs. I wouldn't know, though.

Re: Allbirds CEO on Amazon's copycat strategy

#72

Post by peruvian »

I'm not going to defend Amazon or capitalism as much as others in the comments, but Allbirds are fairly cheaply made shoe sold at a high price to well off tech workers or tech-adjacent workers. It was only a matter of time until someone that can eat the margin (Amazon) stepped in.

Re: Allbirds CEO on Amazon's copycat strategy

#73

Post by barbecue_sauce »

readams wrote: post #6
40acres wrote: post #3

Abstractly, the question at hand is this: is a retailer that sells its own in house brand anticompetitive due to the information it has on potential competitor sales? Other large retailers: Target, Walmart, etc. have a higher percentage of in house brands for sale than Amazon. So on this argument going after Amazon means you need to decouple retailers from in house brands across the board. Even the concern about sear…

I think most people don't know that shelf space is actively sold by the stores. They imagine the stores go out and find the best products to display. That's not what happens.

This really depends on the retail methodology of a company. Space allocation in a category planogram (layout) is often ultimately decided by the category manager (corporate person who is responsible for P/L of that category), but can be affected by the heavy hitters in that category using their internal "retail services" department to help said category manager formulate their planograms. This usually results in somewhat biased product assortments and layouts that give preferential treatment to specific brands, but rarely is space outright purchased within the aisles of a store.

End-caps are a different story, but often the "purchase" of an end-cap simply takes the form of wholesale pricing concessions, which allow the store to make more money by promoting those products for a short period of time. Historically, some DSD brands will lease end-caps at stores (speaking specifically about supermarkets in this context), but these are serviced and stocked by external companies. Depending on the marketing strategy of a chain, private label products are often placed on end-caps to drive volume for what are often their highest-margin products (due to heavy control over the whole supply chain) and are not subject to any purchasing.

TL;DR: The extent to which retail stores "sell" shelf-space is often exaggerated, a kind of folk wisdom that may have been more truthful in the past but doesn't reflect modern business practices.

Re: Allbirds CEO on Amazon's copycat strategy

#74

Post by LoSboccacc »

rburhum wrote: post #24
ghaff wrote: post #20

Earlier quoted context omitted.

Serious question. Why is it dodgy?

Because designers spend an entire year designing what they are going to sell as their line for the year and when they show it on the runway, Zara takes a photo and has it mass produced and sent to stores in two weeks. They do this consistently. It is dodgy.

a luxury brand comes together with materials and manufacturing quality.

if Zara or any other generic can compete on these, you never were a luxury brand to begin with.

on the other hand Zara specific strategy of violating copyright deserves flack on its own. but it's unrelated with the problem at hand: a brand selling premium stuff at a quality point that's easily emulated is not premium, it's the equivalent of patent trolling in the digital world: they're trying to get a premium out of owning generic concepts like tote bags or high neck sweaters.

Re: Allbirds CEO on Amazon's copycat strategy

#75

Post by raz32dust »

toasterlovin wrote: post #2

If you can't succeed because somebody made a low effort, low quality copy of your product, then you don't deserve to make money. Especially in light of the fact that Coke has been around for 150 years and is essentially just sugar water.

This is a very simplistic view. (a) Patent litigations can cost a lot of money, and small companies might not be able to fight big ones. (b) Some products are more easily patentable than others. The current situation is definitely not great for innovation or creativity.

Re: Allbirds CEO on Amazon's copycat strategy

#76

Post by dfcagency »

helen___keller wrote: post #71
dfcagency wrote: post #62

Earlier quoted context omitted.

The bigger problem here is that Allbirds ISNT a luxury brand. They've drank the Silicon Valley cool-aid of growth above all else, the "reforge" growth-hack school of tips and tricks to optimize conversion rates and customer retention, without actually building a storied brand - which is what a real luxury brand is (see: LVMH's holdings, Hermes, or more recently Aesop). There's no storied history, hell - their LOGO is…

> The bigger problem here is that Allbirds ISNT a luxury brand. Sure, perhaps I should have said they price themselves like a luxury brand (or something above commodity pricing but below luxury? I'm not an expert on this stuff) From their marketing on sustainability, and their prices, it seems to follow to me that they probably have a high markup and don't ruthlessly cut corners to survive on a tiny margin at brutall…

Luxury isn't necessarily about price (although it's a common component) - it's an ephemeral combination of prestige, exclusivity, quality, and wealth/taste projection.

Re: Allbirds CEO on Amazon's copycat strategy

#77

Post by readams »

sct202 wrote: post #43
criddell wrote: post #26

Earlier quoted context omitted.

That's not always true. I don't think it would matter how much Amazon money offered Apple, they aren't going to install an Echo end cap.

Yeah, the person above you makes it sound like stores just have giant Dutch auctions for space when it's more like negotiating terms to a contract after they've already passed other qualifying steps.

https://en.wikipedia.org/wiki/Slotting_fee

Re: Allbirds CEO on Amazon's copycat strategy

#78

Post by peruvian »

magashna wrote: post #53
OnlineGladiator wrote: post #35

Earlier quoted context omitted.

You're comparing work boots to what are effectively wool slippers with rubber soles - of course there's a difference in quality because they're not even the same market segment. I agree with you they're overpriced, but not for the reasons you stated.

Maybe they should aim for a different market segment then. Common Projects, a plain but very well made luxury sneaker seems to be doing well. I'd imagine fighting for scraps against Amazon/Walmart isn't going to go well.

Their market is well off techies/tech adjacent people that don't care about fashion and just want to be comfy (Allbirds are the butt of jokes in any men's style community).

They can't price their shoes too high because their market would scoff at paying more than $~150 for shoes. This market also won't care about where the material is sourced from or who makes it.

Allbirds made a cheap product people can easily copy, so they did. Shrug.

Re: Allbirds CEO on Amazon's copycat strategy

#79

Post by ApolloFortyNine »

sdan wrote: post #69
ajhurliman wrote: post #52

Earlier quoted context omitted.

Source?

AWS

Licenses to stop 'software as a service' from being able to make changes without publishing them back have been around since 2002 [1].

You can hardly develop open source software and then be shocked when someone goes ahead and uses it within their rights.

[1] https://en.wikipedia.org/wiki/Affero_General_Public_License

Re: Allbirds CEO on Amazon's copycat strategy

#80

Post by dkarl »

ghaff wrote: post #20
kadoban wrote: post #18

Earlier quoted context omitted.

Just because it's common doesn't mean it's not also dodgy.

Serious question. Why is it dodgy?

It's dodgy for the same reason it's dodgy to print and sell a new novel without paying the author, for the same reason it's dodgy to clone a successful app and sell it without any attempt to improve on it. On one hand you have a system where companies support the creation of new designs so that they can profit from the reproduction of them, and on the other you have companies operating parasitically so they can get a share of the profits without providing any support to the designers.
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