In a highly competitive and crowded category such as sportswear, it is extremely hard for any new player to break in. Understanding new market needs and creating differentiation in response to these needs requires fresh insights and viewpoints.
From its earliest days as a pilot project on Kickstarter, Allbirds Inc. positioned itself as a challenger brand by identifying sustainability as the core differentiator. This would help it appeal to an emerging class of consumers who were increasingly environmentally, economically, and socially conscious.
But putting this differentiation into practice is easier said than done. It required a revolutionary approach in the entire shoe-making value chain. This could help ensure a superior product that delivered on sought-after attributes such as quality, comfort, fit, reliability, and price, yet made fully with eco-friendly practices.
Allbirds co-founders and co-CEOs Tim Brown and Joey Zwillinger both like to say, “Mother nature made us do it.” Brown was an all-star athlete and footballer from New Zealand that was familiar with the unique qualities of merino wool. Zwillinger was an engineer and an expert in renewables – both unlikely entrepreneurs but with a clear vision.
Less than a year after officially launching, Allbirds became a certified B Corporation, dedicated from its inception to making the most sustainable footwear possible while actively working to minimize its environmental impact. The California-based company crafts running shoes, and now even apparel and accessories, using planet-friendly natural materials such as merino wool and eucalyptus tree fibers – forsaking the synthetic materials commonly used in competing products.
Innovating a quality running shoe that is comfortable to wear and treads lightly on the planet has made Allbirds something of a runaway success. In its first two years, the company sold more than one million pairs of its green sneakers and expanded its e-commerce operations into brick-and-mortar stores.
Today, several factories feed into Allbirds’ nine distribution centers around the world, which supply its 25 physical retail stores, with the potential to reach 2.5 billion customers through digital commerce. To ensure that consumers can gain full visibility into the environmental impact across the supply chain, the company labels every product it makes with its individual carbon footprint, holding themselves accountable to their mantra to “create better things in a better way.”
This kind of rapid success requires a strategic and thoughtful approach to managing the complexity of building a socially responsible global supply value chain. Allbirds confronts the challenge head on by developing meaningful, multi-year relationships with its suppliers to ensure ethical and humane manufacturing practices and demanding full transparency into its partners’ supply chains. This safeguards social responsibility across sourcing and procurement.
With a long-term outlook from the beginning, Allbirds’ founders made the decision early on to invest in a single software platform. Allbirds wanted to invest in an enterprise resource planning (ERP) system that could help the company manage the entirety of its business in the present and continue to do so as it evolved and grew, all while keeping its commitment to sustainability at the forefront.
“We were really deliberate in making technology investments that would scale with our business,” said Zwillinger. “We needed to recognize how customers want to be served and offer an immersive cross-channel experience on mobile, Web, and in the store. To do this, we needed robust and connected real-time digital technologies, giving us visibility into our inventory. We also needed to personalize that experience for our customers, whether it’s online, pick-up in store, or ship-from-store, as well as be able to merchandize our products in a personalized way on our digital platforms.”
Meeting these wide-ranging needs and more, Allbirds adopted SAP S/4HANA as the foundational business infrastructure to help underpin its fast-growing business, track its inventory in real time, and trim waste.
In addition to supporting sales growth, managing marketing, and engaging customers through social media, Allbirds relies on SAP solutions to help it achieve specific business goals. This includes creating one financial system of record for all transactions throughout its global operations and embracing new cloud technologies to help it become a more diverse, capable, and responsible global employer.
And with connected technologies across its operations, Allbirds can calculate and monitor its carbon footprint from design and delivery to supporting ongoing innovation to deliver new products and services that delight customers everywhere.
By avoiding shortcuts and sticking to its values, Allbirds’ success story shows that what’s good for the planet is also good for business.
To learn more about how Allbirds created a niche in the sportswear category by focusing on sustainability, watch the interview between Zwillinger and Julia White, SAP Chief Marketing and Solutions Officer, or read this business transformation study.
Vivek Bapat is part of Purpose and Sustainability Marketing at SAP.
This story originally appeared on SAP BrandVoice on Forbes.
