Combatting Knockoffs through Sustainable Resale - A Market Analysis on Allbirds

Photo Credit: Fix Photos

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Author's Note:

Hi!

I wrote this case study for an intro to fashion management class in my freshman fall. Based off of an report detailing the struggles that Allbirds was facing in the market, the assignment challenged us to create a plan to combat a problem of our choice. I especially enjoyed the research and critical thinking portions of this assignment. Happy reading.

xoxo

Ana

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Position Statement: By partnering with alternative online seller sites such as Alibaba, Allbirds is able to crack down on the counterfeits being sold on the platform. However, in order to better combat counterfeiting, Allbirds should implement a resale platform to expand their business and cut down on cheaper counterfeits invading their corner of the market.

Argument: Allbirds would benefit from a resale platform for multiple reasons. In terms of limiting counterfeiting, Allbirds has already gone on the offensive. By partnering with vendors such as Alibaba and MarkMonitor (A fraud monitoring company), Allbirds has extended their ability to find and take care of fake sellers. However, these measures are not enough to stop counterfeiting. According to a case study done on Allbirds, “consumers purchasing fake goods fall into two categories: those who know they are purchasing fakes and those that are unaware of the authenticity of their purchase. In the case of Allbirds the most common scenario has been the former due to the price difference: $40–$60 for fake or lookalike Wool Runners versus $95 for authentic product.” (page 10). By cracking down on counterfeiters, they are reducing the supply for fake shoes, not the demand. Selling used shoes at a discounted price will make the brand more accessible to people who can’t justify spending $95+ on a pair of sneakers. A resale market would lower the demand for knockoff shoes by being able to somewhat compete with counterfeits’ discounted prices.

Furthermore, if Allbirds doesn’t take quick action to reduce the counterfeits, their image will suffer. These counterfeits do not share the same sustainability assurances that the company is built on and so it damages both the environment and the brand message as a result. So long as Allbirds don't offer products at a lower price point, they will continue to lose customers to cheaper fake goods. This would also damage their quality reputation if someone unknowingly bought a badly made counterfeit thinking it was the real thing. A recommerce website will give the brand more lifetime value by allowing a wider customer base to access their real product. Being able to resell slightly used goods is beneficial to the brand image because it proves that the products are built to last. It is also a sustainable way to expand their business and is cheaper than most other solutions.

This tactic has also been proven to work by three of the most successful B- Grade Companies: REI, Eileen Fisher, and Patagonia. All three environmentally-conscious companies have implemented donation/resale programs that are highly popular and well regarded. REI opened its online recommerce business in 2018. According to their director of strategy, “In its first 10 months, the beta test has been successful beyond all expectation, which tells us there is an inherent appetite for high-quality, lightly used product at lower price points” (Gugala 2021). Eileen Fisher started her Renew program in 2009 and has since received “over 1.9 million pieces” of used clothing that she has resold, remade, or donated (Renew 2022). Patagonia opened their Worn Wear website in 2017. About 2 years after launch Patagonia had “sold over 120,000 products” that would have been disregarded or thrown away (Salpini 2019). According to Forbes, implementing a resale platform can give a company “additional revenue at a good margin…new customers…brand loyalty…[and brand] momentum” as well as attract followers to their social media accounts, building brand awareness (Danziger 2019). The message and end goals of these companies matches well with Allbirds’ devotion to sustainability. Their success serves as a proof of viability for resale in the apparel and shoe industries. It also proves that there is a strong demand for secondhand goods.