The company started as an online retailer and only recently began opening stores, serving as a place for shoppers to try on the sneakers before buying and helping create more buzz around the brand. The company has since launched a new sneaker made out of tree fibers and flip-flops made out of sugar, along with a kids line called Smallbirds .

At more than 4,800 square feet, the new flagship location in New York's SoHo neighborhood on Spring Street will include a "service bar" for finding the right size, along with more room for customers to lounge. It will replace its temporary home on Prince Street, which was about 900 square feet and is closing later this week.

Allbirds, the shoe brand that won over Silicon Valley with its wool sneakers, has begun gaining momentum on the East Coast and is opening a massive new store in New York on Tuesday.

"Given how tactile our product and brand story is, it's important that we continue to create these opportunities to interact with customers," Allbirds co-founder Joey Zwillinger said. "Our goal is to continue to create retail spaces that allow customers to truly engage with the brand in an authentic off-line experience that embodies Allbirds' unique comfort and thoughtful design."

Allbirds plans to open eight more stores in the U.S. over the next year, including in Chicago, Boston, Los Angeles and Washington, D.C. The company also said it's thinking about adding two locations overseas.

"There is and has been incredible pent-up demand for Allbirds around the world," Zwillinger said. "When we launched the brand, we were thoughtful to keep our distribution limited to the regions we felt we could service impeccably — the U.S. and New Zealand, our home countries."

Since then, Allbirds has grown into Australia and Canada.

As department stores and established retailers like Sears and J Crew begin to scale back their real estate footprints, e-tailers like Allbirds, Warby Parker, Casper, Everlane, Untuckit and Bonobos are really starting to grow. All of these brands are moving into much smaller spaces than have been the norm in retail, but they're succeeding in amassing loyal shoppers through social media, pop-up shops and sponsoring events or classes inside their stores.

Allbirds has raised $27.5 million, which has helped the company research and develop new, sustainable materials for its shoes, according to Zwillinger. It will also help the company move forward with its plans to open more stores, he said.