A quick hit on the internet about ‘Crocs are…’ brings forth auto-complete suggestions that range from ‘ugly’ to ‘awesome’, ‘cool’ to ‘back’, or even ‘bad’ to ‘us’. That is quite a spectrum. It is not often that we come across a brand that has people so polarised on their opinion of it — they are either united by their love or their hatred for it. But on the back of the customers that stand by it, Crocs has grown.
Flagged off by the now iconic clogs (shoes with open backs and closed toes), initially developed as a product for the boating community circa 2002, Crocs now aims at being a wholesome ‘athleisure’ company with a product portfolio to boot. Deepak Chhabra, managing director, Crocs India notes that it was not until about five years ago that the company realised that focussing only on travel wear and beach wear will be rather limiting. That’s when the evolution of the brand as true athleisure/casual/lifestyle label happened. BrandWagon looks into the making of this rather unconventional brand and what makes it tick.
The India story
Crocs entered India in 2007 with a representative office and a skeletal team. The initial tie-up was with a local partner Chogori India Retail who was later turned into a master distributor for India. This was the case for about four years. Chhabra notes, “Currently, we operate through partners. Our focus remains on product development, bringing the right product mix to India and marketing it well. As far as distribution and our exclusive store network are concerned, all of that is outsourced to our partner network.”
Crocs, back in 2002, began with a product offering which is very unique in itself. For the longest time, consumers have associated Crocs as the brand that sells the ‘old seeming clogs’ (and the aesthetics of it) despite the portfolio having grown over the years. This is something the company is now looking to address. To help market the new additions in the Crocs portfolio better, the brand has got celebrities like Drew Barrymore, John Cena, Yoona and Henry Lau on board.
A maiden mass media global communication exercise was launched earlier this year. The communication showcases these celebrities encouraging people to be themselves and walk into places comfortably as they are, presumably in Crocs shoes. Communication, for the Indian market, will be targeted at the top four to five cities. Contests are being run on the brand’s Instagram, Facebook and Twitter pages to promote the Come As You Are philosophy.
The company is now looking to get the attention of the young adult population. Overall, the brand is strong in the 1-12 year-old segment, provides Chhabra. However, the biggest consumers are men aged 25 to 40 years. In the same age segment, the brand is making efforts to appeal to women as well and has seen 28% to 29% of business coming in from there. Kids ‘abandon’ Crocs once they reach 12 years of age. “That is the bracket that fuels contribution. That’s the segment we now want to target,” Chhabra says.
Crocs has about 1,000 PoS touchpoints in India, around 42 of which are exclusive stores, run by partners. About 500 would be department/key account stores like Lifestyle, Shoppers Stop, Regal, Metro, etc. The rest are traditional multi-brand footwear outlets across India.
In the e-commerce space, the company is present on major online portals apart from its own website. E-commerce brings in 25% of revenues. Offline, a majority of the revenue comes in from key account stores, followed by exclusive stores. Chhabra sees this changing post the campaign, over the next six months.
“We intend to double our store count in India by the end of the year going from 42 to about 80. Once that happens, our exclusive stores would contribute to our sales,” Chhabra says.
‘But they’re ugly…and expensive’
We may be wrong in our estimation but by the looks of it for every Crocs fan, there are at least three ‘haters’. A perception created by word of mouth, amplified by social media and repeated over a number of years, is what the brand needs to fight. Chhabra states the perception of a clog being ugly is still better in India when compared to the US. “This is mainly because of the clog silhouette. Now with the changing product portfolio, clog is one of the 20 silhouettes that we make. So if somebody doesn’t like clogs, they have 19 more styles to choose from,” he suggests. Crocs is not too worried about the ‘hate’ as 44% of the total business comes in from repeat purchases.
Crocs places itself in the premium category much to the dismay of those consumers who may want to give it a shot — but may not want to pay as much. That’s just what me-toos want to hear. Counterfeits cropped up over the last five years, selling at one-fifth of the price. “We have spent a lot of money and time in cleaning up the market of these counterfeits,” Chhabra admits. “Post this wiping out exercise, we have actually managed to get some users of these copies to now come to us.” In fact even some of Crocs’ erstwhile retail partners used to push their own counterfeits versus the more ‘expensive’ Crocs — almost matching the fake products, logo for logo, name for name. “But that was a long time ago and we are very strong now in our IP protection,” says a relieved Chhabra. There still are some instances of me-toos, mainly from the online space given the difficulty in locating a seller.
‘Come as you are’, and what lies ahead
Not a brand that advertised much, Crocs launched the Find your Fun campaign and positioning in 2015. Earlier this year, the new campaign, Come as you are, was brought to life by its brand ambassadors in the US market. This is a change from the light and fun face of the brand to something more mature.
In India, Crocs has marked out 5% of revenue for communication. In the future, the investment might go up keeping in mind increasing turnover. Looking West, as reported recently, the intention is to close 160 direct-to-consumer stores over the course of the next two years. This, the company maintains, is not about cutting down on retail presence but about going from the company owned company operated (COCO) model to the franchisee owned company operated (FOCO) model. The US is a market where 12-13% of revenue comes in from online channels. The same is the case, more or less, for Europe.
Armed with a new positioning and campaign, a plan to thwart counterfeits, a positive market sentiment and a game plan for the next few years, Crocs is all set to play to its size and strength. Haters can hate!
The origin story
1999 Crocs, originally Western Brands LLC, formed in Colorado
2002 The Crocs clog makes its debut at the Ft Lauderdale International Boat Show with its first model, ‘The Beach’
Marks its first full year on the market, with 76,000 pairs of Crocs sold, clocking in $1.2 million in sales
Early 2005: The company prepares to go public; Ronald R Snyder appointed as CEO
Spring 2005: Crocs prepares for an IPO; unveils plans for a new line of apparel and accessories. By the end of the year, Crocs has nine models and 17 colours
Launches its first national marketing campaign
2006: The company goes public. Crocs increases its asking price to $21 a share when the offering is conducted in the first week of February 2006
After going public, Crocs launches a new women’s shoe model and its first children’s style