Once-Popular Shoe Brand Reinvents Itself and Expects 50% Growth in 2021
Crocs are back! … and they are an incredibly interesting growth strategy case study.
You might remember Crocs were popular in the early 2000s, but they went out of style as quickly as they came. I know I stopped hearing about them completely. Until last month, when my 15-year-old niece raved about them as her “go to shoes.” I was surprised to hear they were making a comeback, prompting me to take a closer look.
It turns out they didn’t completely go away after all! They did, however, go through a major restructuring effort in 2014, paving the way for their current success.
Below is a deeper look at this growth strategy case study and this company’s incredible journey to an unconventional comeback.
Growth Strategy Case Study: Crocs Background
Crocs launched in footwear in 2002, with a unique foam clog design that was durable, waterproof and surprisingly comfortable. The design was polarizing, creating a lot of media and online discussion; some people loved them, and some people hated them. In fact, Time Magazine ranked Crocs as one of the “worst inventions” ever.
Nonetheless, by 2006, Crocs had gained significant popularity with several high-profile celebrities, including President George W. Bush. The company went public in 2006, and by 2007 had more than doubled its revenues, with $847 million in sales globally.
During this time of rapid expansion, Crocs made a series of acquisitions, including Jibbitz – a manufacturer of accessories that snap into the holes of Croc shoes, enabling it to play in a more fashion-oriented space.
By 2008, however, the hype started to die down. That, coupled with the economic recession, was catastrophic for Crocs, and stock prices plummeted. By 2013, it was clear that Crocs had overextended itself and needed to simplify its increasingly complex operations, triggering a companywide restructuring effort to improve profits.
Growth Strategy Case Study: Well-Planned Growth Strategy
As part of the restructuring effort, Crocs changed leadership and put in place a growth strategy plan focused on reducing cost, winning with core brands and making Crocs relevant again.
Key growth strategy actions included…
- Streamlining operations and distribution model: Crocs eliminated 180 jobs and closed over 100 stores and manufacturing plants over a five-year period. At the same time, Crocs invested heavily in developing direct-to-consumer assets, including high-performing owned retail and e-commerce stores. Today, e-commerce accounts for about 26% of total Crocs’ net revenue.
- Focus on core brands: To streamline operations, the company rationalized its portfolio of over 250 products and stopped product development on non-core brands. All efforts were refocused on winning with the classic clog.
- Repositioning to attract new target: In 2017, Crocs launched the “Come as You Are” brand campaign and partnered with some of the biggest international stars to attract a younger generation and make Crocs “cool” again.
- New campaign: Celebrates the uniqueness of the Crocs’ design, and according to Crocs’ Chief Marketing Officer, Terence Reilly, was an “invitation for people to share their identity, their one-of-a-kindness, which is so important in today’s world.”
- New product collaborations: Recent new product collaboration with Post Malone, Bad Bunny, and Justin Bieber have sold out within hours, generating hype and awareness among Gen Z.
- Emphasize customization: Crocs has also partnered with some of the biggest designers to create custom charms, including Christopher Kane, Demna Gvasalia for Balenciaga, and Rob Cristofaro for streetwear brand Alife. Charms start at $3.99, offering a broad range of options for self-expression and personalization important to their target consumer.
- Embracing social media marketing: According to CEO Andrew Ree, “There is an intrinsic tension within the brand — people either love it or they hate it…we leaned into that and took advantage of that dichotomy. And what we found by doing so is that you can generate a lot of conversation.” And along with online discussion comes free PR and advertising that otherwise would have cost millions.
- Over-communication: While having a strong strategy was necessary, over-communication and internal alignment to that strategy was equality important. According to CEO Andrew Rees, “You can never (over) communicate, especially when it comes to strategy.” After all, if your team does not have a clear understanding of what you are trying to accomplish and why, execution will fall short, despite a well-designed strategic roadmap.
Growth Strategy Case Study: Crocs Results
Growth strategy and repositioning efforts clearly paid off – Crocs are currently a “must have item” among Gen Zers who see endless benefits to this comfortable shoe:
“It’s my go-to shoe because first off it’s pretty cheap, not too expensive, they are quick and slip right on, work almost anywhere, you can use them as water shoes or just sandal-like shoes and I can decorate them with jibbitz- which is cute because you can put whatever you’d like.”– Jocelyn, 15-year-old Crocs’ enthusiast
Crocs’ popularity during the pandemic has further been augmented with their “Free Pair for Healthcare” campaign, which distributed over 850,000 shoes to healthcare works in 2020. In Q1 2021, sales rose 64% versus one year ago, and the company now expects sales to be up 40-50% for the entire year.
Crocs is a great growth strategy case study of a successful turnaround and brand reinvention. Management provided focus by streamlining product offerings and operations, repositioned its core product to be relevant and leveraged social media and celebrity partnerships to generate awareness.