How Amazon knocks off Allbirds

Monday, November 25, 2019 by Robinhood Snacks | Disclosures

Amazon's inspo for Allbirds knockoff: "We'll call it, McDowell's"

Last Week’s Market Moves
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10-Yr US Treasury

Hey Snackers,

Our go-to Thanksgiving dinner kick-off conversation starter: Before kale became big around 2013, its largest purchaser in the US was Pizza Hut (not for food — for salad bar decorations).

The market's 4-week win streak just ended as investors worry that Phase 1 of the US/China trade deal may not happen by the end of the year.

1. Amazon creates Allbirds look-alike wool shoe, plus hundreds of other knockoffs

Most concerning holiday gift ever... AmazonBasics — the low-cost versions of simple stuff, from dorm-worthy extension cords to half-price iPhone chargers. Now Amazon has taken its cheaper private label brands to a new level: Ripping off name-brand innovators and their top products. The latest victim is Allbirds.

Behold, the "206 Collection" wool sneakers... They look just like these iconic Allbirds wool shoes — they're straight-up copycat kicks made by Amazon, meant to capture Allbirds fans who want to pay half the price. Here's how Amazon tries to steal sales from Allbirds, the startup specializing in sustainably-made, simply-designed wool shoes.

  • Buy "Allbirds" Google search: Allbirds CEO Joey Zwillinger complained to Axios that Amazon's 206 Collection is sometimes the top result when you search "Allbirds" on Google — because Amazon pays for an ad to show up there.
  • "Equivalent" product, half price: Amazon defended its $45 knockoffs of $95 Allibirds as "saving customers money by offering a private label equivalent.” But Allbirds uses sustainable sourcing and recycled materials. Amazon's don't.
  • PS: Amazon is 1,000x bigger than Allbirds: That's based on their valuations — Allbirds' is $1.4B, Amazon's is close to $1T.

Amazon search is how Amazon nails knockoffs... Allbirds doesn't sell on Amazon because it would be awkwardly placed next to cheaper/identical shoes like "Urban Fox Wool Runner". Amazon claimed this summer that its 100+ private label brands make up just 1% of its sales, but that's a lot. And it's growing. Here's their 4-step algorithmically-informed knockoff strategy:

  1. Search: Shoe-hungry humans still search for Allbirds on Amazon.
  2. Signal: Amazon interprets the high search volume as a signal of customer demand.
  3. Solution: Its retail team can quickly create a knockoff of their own to meet that demand with a freshly fake brand name.
  4. Repeat...

Let's see the bling... After weeks of flirting, LVMH reached a deal to acquire Tiffany for over $16B — the biggest luxury acquisition ever. The couple has chemistry: LVMH owns Bulgari, Dior, Dom Pérignon, and other ultra-luxury everything, but its luxe lineup is missing out on one of the top luxury segments last year: Jewelry. Meanwhile, Tiffany is searching for itself as it loses touch with Millennial shoppers ($9,270 for "Silver Yarn" doesn't help). Classy match.

Shipping nirvana... Target achieved it. Shares jumped 15% after the department store's 31% rise in online sales last quarter, but here's what fascinated us: 80% of that growth was from same-day delivery/pickup. Even wilder, same-day delivery squeezes Walmart's and Amazon's profits hard, but same-day delivery magically cut Target's shipping costs by 90%. Spoiler: It manages that by shipping your emergency deodorant stick from the closest Target store (miles away), not a fulfillment center (time zones away).


Honey wants every second to be Black Friday... The startup that harvests online shopping promo codes for you was just acquired by PayPal for $4B (the biggest LA-based tech company to get acquired). It feels like Honey's service is boderline illegal, saving online shoppers $2B since it launched. But it's both legal and profitable — and PayPal wants Honey to help its 300M users buy more online. One problem: Investors (ironically) think PayPal overpaid, so they downgraded PayPal stock after the $4B splurge.

Looks like RoboCop and a steak knife had a baby... Tesla's new trapezoid-inspired pickup truck goes by Cybertruck, starts at $39.9K, and was designed (how do we put this?) from scratch. Tesla shares fell 6% the day after the announcement because investors are concerned the unothodox look won't sell. But in just 3 days since the Thursday night freaky unveil, Cybertruck has already snagged 200K pre-orders (fully-refundable $100 deposits) and most are for its more expensive options.

What else we’re Snackin’
  • Work: 5 questions that'll help figure out your productivity style (we're "Morning/Deadline/Loud/No/Impact")
  • Life: In case you're bored of baking but terrified of deep-frying, here's how to smoke a turkey
  • Invest: A roundtable of investing experts share their best advice for 2020
  • Venture: Legendary Venture Capitalist Ben Horowitz now asks job candidates what they think about WeWork (hint: empathize)
  • Minnovations: "Anti-Ads" — 8 best ad campaigns that sold you a product by telling you not to buy it
Snacks Daily Podcast

Tesla's new Cybertruck was supposed to be bulletproof. But when Elon asked a colleague to test that out live on stage, the window broke. Twice. More on "break-gate" in our 15-minute Snacks Daily pod.

This Week

Disclosure: Authors of this Snacks own shares of Tesla and Amazon

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