Post-pandemic, Crocs is Still Winning
It’s undeniable that the Crocs brand was a massive pandemic winner. As people stayed indoors and demand for its comfortable clogs skyrocketed. From 2019 to 2021, Crocs’ revenue doubled and its net profit increased five-fold. Accordingly, from its trough in March 2020 to its peak in November 2021, Crocs’ stock ballooned 16-fold.
But the pandemic is now largely over. A cursory glance at its stock performance since its 2021 high may lead one to think that Crocs was just a pandemic fad. But this is untrue. Since current-CEO Andrew Rees took over the company in 2017, it has undergone a genuine business transformation. Factoring out Crocs’ acquisition of HEYDUDE, the Crocs brand increased sales by 15% in 2022, and management is expecting Crocs brand sales to increase by another 12–13% in 2023. Clearly not the stuff of a pandemic fad.
Crocs’ History
To understand how this transformation took place, we first need to understand Crocs’ history. The company was founded in 2002, with the same iconic clog that remains today. The name was inspired by crocodiles that live on both land and water. As such, they were designed as a functional shoe for consumers like gardeners and people that worked on boats, as well as people that worked on their feet like nurses and chefs.
This unique functionality was due to the distinctive material of crocs, Croslite. Croslite is a proprietary closed-cell resin that has distinct advantages like being slip resistant, lightweight. odour resistant and easy to clean.
Crocs’ sales exploded. In 2006, it hit $354 million in revenue. The next year that doubled to $847 million, with a net income of $168 million.
Along the way, Crocs also acquired Jibbitz for $20 million. Jibbitz sells accessories for people to customise their Crocs with. (Trust me, this will be important later on).
This initial success was due to two main factors. First, its design was compelling. The Croslite material and the distinctive design of the shoe attracted the public. Second, sales locations expanded rapidly. Within the first few years of its founding, it had expanded to many malls and retail stores, allowing for easy access to the shoes.
But in the midst of the financial crisis in 2008, the company suffered from declining sales and a net loss of $185 million. Though the brand eventually eclipsed its sales peak by 2011, the company still struggled. From 2009 to 2016, it never recovered to its net profit peaks of 2007, and was unprofitable for 4 of the 8 years. Due to rapid overexpansion, it had to close dozens of stores in 2014. It began shifting sales from retail to online.
New Leadership
Enter Andrew Rees. He had joined Crocs earlier in 2014, but became CEO and joined the Board of Directors in 2017. Under Rees’ leadership, Crocs has continued to close underperforming stores and focus on profitable ones. It’s also refocused on the iconic clogs and cut back on varied designs that were not working out. Further, Rees’ operational leadership has led to manufacturing and supply chain capabilities being expanded significantly, leading to a smoother company operations process.
But Rees’ key success has been focusing on two main areas, which has allowed the company to undergo a dramatic turnaround. These two areas are: marketing and Jibbitz.
Marketing
Since becoming CEO in 2017, Rees has implemented a multifaceted marketing strategy that has propelled the brand to new heights, reviving its image and driving substantial growth.
One of the pivotal elements of Crocs’ marketing resurgence lies in their strategic collaborations and partnerships. The brand strategically teamed up with various high-profile celebrities, fashion designers, and brands to leverage their influence and expand their reach.
Crocs hasn’t just been collaborating with random celebrities either. Unlike other companies that simply take money and throw it at whatever celebrity seems the most famous right now, Crocs often chooses celebrities that are legitimate fans of the brand. This approach is exemplified by its partnership with Justin Bieber, who has been seen wearing Crocs on numerous occasions. When fans acknowledge that Bieber is engaging in these collaborations not just for the sake of money but because he genuinely likes the brand, the marketing appeal explodes.
Moreover, the sheer breadth of Crocs’ marketing approach has seen it attract a wide variety of fans. Below is a list of just some of the influencers and brands Crocs has partnered with:
- Salehe Bembury
- Levi’s
- Pixar Cars
- 7-Eleven
- Lazy Oaf
- Nongshim
- Diplo
- Little Big
- Justin Bieber
- Post Malone
- Bad Bunny
- KFC
- PSY
- Christopher Kane
- Palace
- Takashi Murakami
- Balenciaga
Pretty big names.
Apart from engaging with celebrities who genuinely love the brand, Crocs’ collaborations with fashion designers and brands also position itself as a trendy and fashionable choice. Partnerships with designers such as Christopher Kane and Balenciaga transformed the perception of Crocs from merely functional footwear to high-fashion statements. These collaborations enabled Crocs to tap into new markets, attracting fashion-forward consumers who previously may not have considered the brand.
The bizarreness of Crocs’ collaborations with high fashion is also part of their success. For example, its $850 high heel Croc with Balenciaga understandably created much buzz. That’s clear from the fact that this high heel Balenciaga Croc sold out within hours. But more importantly, this buzz and tension creates much free PR for Crocs, something that’s always welcome. Outlandish collaborations keep Crocs relevant in the news cycle and further consumers’ engagement with the brand.
Also, Crocs has been expanding past high-profile collaborations to those with smaller influencers too. Look at what President Michelle Poole has said about Crocs’ marketing strategy on the Modern Retail Podcast:
“Influencer strategy is a really critical part of our marketing playbook. And it has evolved. Several years ago, when Crocs was really trying to get back on the radar be perceived as a more aspirational brand, we leveraged some big name celebrities to really be ambassadors for our brand — people like Drew Barrymore. We continue to do some partnerships and have some partnerships with some broader well known names like Priyanka Chopra, for example. But I would say, we’ve also now evolved to really focus on a tapestry of micro-influencers. Some of these influences have such dedicated followers; they might have a smaller number of followers, but they have a really devoted — almost obsessed — group of followers. So we think about our influencer strategy as a rich tapestry of interests and affinities and geographies — and we stitch it together like a quilt.”
By focusing on micro-influencers, Crocs can also appeal to more diverse and engaged followings, at a lower cost. This mix of collaborations with both famous and not-so-famous influencers allows Crocs to further drive engagement amongst consumers.
Also, in tandem with collaborations, Crocs’ marketing strategy has focused on engaging storytelling and user-generated content. The brand capitalised on social media platforms, encouraging customers to share their unique experiences with Crocs using dedicated hashtags. This user-generated content not only served as authentic testimonials but also fostered a sense of community among Crocs enthusiasts. This is encapsulated in the brand’s “Come As You Are” campaign, which has involved buzzy commercials like this flashy 2018 musical-esque commercial with Drew Barrymore. The campaign emphasises inclusivity and individuality, sending a wholesome message that no one is perfect but that’s okay. Unsurprisingly, this resonated strongly with consumers, aligning with evolving societal values and garnering widespread attention.
In this way, Crocs’ outlandish (and seemingly ugly) design has become its strength. Crocs markets its clogs as a unique way to express consumers’ acceptance that they may not be perfect, but they’re proud of their own uniqueness and individuality. In the trend-focused fashion industry, this has been pivotal for its sustained appeal with consumers.
Furthermore, Crocs has expertly limited distributions for its high-profile collaborations. As many may know, limiting supply is a key tactic to drive hype for collaborations. It’s been popularised by high profile collaborations between designers and major footwear brands like Adidas. This strategy emphasises on the power of FOMO (fear of missing out), driving customers to buy products before they run out. The adept Crocs brand has used this too. For example, Bad Bunny’s crocs sold out within minutes, driving 1300 fans to sign a petition for Crocs to release more. By deliberately constraining product supply, Crocs can leverage the power of FOMO while also driving more hype around its collaborations.
Jibbitz
Apart from marketing, Crocs’ ingenious Jibbitz strategy has also played a pivotal role in revolutionising the brand’s appeal and consumer engagement.
Jibbitz are small, detachable decorative charms that customers can easily insert into the holes of their Crocs shoes. There is a wide array of Jibbitz designs ranging from iconic characters, symbols, letters, and a multitude of themes spanning pop culture, hobbies, and fashion trends.
This extensive selection empowers customers to curate their Crocs footwear in a way that aligns perfectly with their personal style, passions, or moods. This customization perfectly complements Crocs’ campaign of “Come As You Are,” resonating with its values of individuality and diversity. By providing a platform for self-expression, Crocs has fostered a sense of belonging and inclusivity among its diverse customer base.
With global culture generally trending toward hyper-personalisation, consumers seek products that allow them to stand out and express their unique identities. Jibbitz does just this. By offering a simple yet effective way for customers to personalise their Crocs, it transforms Crocs from a functional item of clothing into a form of self-expression and art, driving brand engagement and loyalty.
Crocs has also leveraged partnerships and collaborations to enhance the appeal of Jibbitz, collaborating with popular brands, artists, and franchises to create exclusive and limited-edition charm designs. For instance, Crocs has collaborated with Disney to design Jibbitz featuring beloved characters like Mickey Mouse and Minnie Mouse, appealing to both children and adults alike. Collaborations with renowned artists and influencers further expanded the range of Jibbitz designs, catering to diverse tastes and preferences.
Furthermore, the interactive and engaging nature of Jibbitz has contributed significantly to its success. Crocs actively encourages customers to share their customised designs on social media using designated hashtags, fostering a community of Crocs enthusiasts who showcase their creativity and inspire others. This user-generated content not only serves as free marketing but also reinforces the brand’s message of individuality and inclusivity.
Conclusion
These two factors, marketing and Jibbitz charms, have created a formidable competitive advantage for the Crocs brand. By creating a brand narrative of personalisation and customisation, while at the same time embracing its shoes’ distinctive design, Crocs has created a uniquely powerful brand image that competitors just don’t have.
This allows Crocs to charge exorbitant prices for products that are extremely cheap to produce. The clogs regularly cost $50–70 per pair, despite estimates that they only cost around $3 to $9 per pair. Also, Jibbitz typically cost about $5-$10 each, even though they’re just small charms that can easily be mass-produced for way less than a dollar.
In essence, Crocs’ marketing and Jibbitz approach have driven a dramatic business turnaround. Crocs has managed to create a strong niche in the saturated and highly competitive footwear industry, affording it massive branding and selling power.
It’s true that fashion is a cyclical industry, with trends going in and out of style on a regular basis. And it’s anyone’s guess when Crocs will once again go out of style as an ugly and wacky shoe. But even with the pandemic over, it’s not done just yet.
