Are Millennials’ Favorite Brands Losing Momentum?

The analysis by The Economist was prompted by the example of Allbirds, the wool sneaker brand that won over millennials in Silicon Valley about a decade ago. The company recently announced plans to transform itself into a provider of infrastructure for AI computing, sparking enormous investor interest and once again confirming the irrational scale of enthusiasm surrounding AI. The company’s stock, which will be renamed NewBird AI, briefly surged by more than 800%. It later stabilized at roughly four times its value prior to the transformation announcement.

Focus on Millennials as a Success Factor

In the early 2010s, Allbirds, together with brands such as the cosmetics company Glossier, eyewear brand Warby Parker, and Dollar Shave Club, achieved remarkable success by focusing on a single generation — millennials — and tailoring their entire business models to them.

These companies fully embraced the internet and social media, building strong businesses through direct-to-consumer online sales. At their peak, the value of these brands reached billions of dollars. But time was not on their side. Since peaking in November 2021, shortly after going public, Allbirds has lost 99% of its market value. And it is not alone. Brands that flourished during the 2010s thanks to the enthusiasm of younger consumers have faced steep declines in recent years.

Two Foundations of Rapid Growth

These once hugely popular brands were guided by two core ideas.

The first was that many products traditionally believed to require in-person inspection before purchase could actually be sold successfully online. This eliminated the costs associated with physical stores. Warby Parker mailed eyeglass frames to customers for home try-ons, while Casper concluded that shoppers did not need to test a mattress in-store before buying it.

The second idea was that skillful use of social media could generate interest without expensive advertising campaigns. Glossier, for example, encouraged customers to share unboxing content through its colorful packaging, thereby gaining organic visibility.

How the Advantage Melted Away

At first, this model enabled rapid growth. Over time, however, it became clear that the real challenge was long-term sustainability. Favorable conditions such as low interest rates and inexpensive customer acquisition through social media significantly contributed to early-stage growth.

Today, those conditions no longer apply. Rising interest rates have made financing more difficult, while investor attention has shifted toward artificial intelligence. At the same time, digital advertising has become saturated, and customer acquisition costs have risen sharply. In response, many brands have opened physical stores in recent years after all.

Competition in the market has also intensified considerably. Large, established players improved their digital channels by learning directly from the millennial-favorite brands. A new generation of influencer-led and celebrity-backed brands has also emerged, using the same growth tools from the very beginning.

A Strategy of Adaptation

Allbirds, the brand mentioned at the start of the story, may be the most extreme example because it is completely changing its business direction. But other companies have also gone through various stages of development and their own crises, from delistings to attempted sales.

The era of rapid growth for millennial brands has clearly come to an end, and what comes next requires a different focus.

The goal is no longer simply to attract customers, but to retain them. In an environment where distribution channels are accessible to everyone, long-term differentiation depends less on visibility itself and increasingly on trust, consistency, and brand reputation.

The story of Allbirds and similar brands shows that rapid growth in the digital age does not guarantee long-term sustainability if companies fail to adapt to market cycles.