One of the “worst inventions” in the world? Here’s how this brand embraced its “ugly” self and gained more customers! [Monday: Marketing Marvels]
Crocs, an American company that manufactures foam clogs, is one of the most controversial brands in the market.
[Foam Clogs: A type of footwear that covers the whole of the foot to near the ankle.]
According to the company’s CEO Andrew Rees, the difference between the opinions of fans and haters of the brand is so extreme that the debate often feels more appropriate for politics rather than fashion.
… and the press hasn’t been any kinder either.
Over the years, the Crocs clogs have been featured on Time Magazine’s “50 Worst Inventions” list, described as “vermin,” and associated with the “ugly” fashion movement.
Thankfully, these sticks and stones didn’t easily break the company’s bones!
Here’s what happened instead:
In 2019, Crocs took advantage of the tension between fans and haters and embraced the “Ugly Fashion” movement to win the hearts of more people!
“Our goal is not to make the haters love the brand. It’s to exploit that intrinsic tension because it creates opportunity, it creates PR, it creates media, it creates interest. It creates a whole lot that would cost you a fortune to buy in other ways.” – Andrew Rees, Crocs’ CEO
This strategy manifested in Crocs’ collaborations with various brands and artists like Balenciaga, Christopher Kane, Drew by Justin Bieber, and Post Malone―brands and famous personalities who created their own wacky takes on the clogs.
As a result of these partnerships, the company gained greater exposure that turned the Crocs clogs into a high fashion statement!
Aside from that, Crocs also looked for ways to drive long-term sustainable growth and keep its target market engaged.
How?
By rolling out more elegant styles to broaden the company’s reach!
This included the LiteRide collection, which targeted millennials and featured sleeker versions of Crocs’ clogs and sandals.
According to Michelle Poole, Crocs’ Senior Vice President of Product and Merchandising, the LiteRide collection is the “most contemporary-looking clog” the brand has ever had and is the “antithesis of ugly fashion.”
Talk about combining comfort and a unique sense of style in one pair of shoes!
Doing the Right Thing for Fans during Trying Times
When the COVID-19 pandemic hit different parts of the world in 2020, Crocs was one of those brands that stepped up to help individuals in need.
Through the “Free Pair for Healthcare” initiative, the company donated 860,000 pairs of clogs―valued at USD 40 million―to healthcare workers. The initiative became a hit and those who received a pair of Crocs clogs showed off their shoes on social media.
While the “Free Pair for Healthcare” was a goodwill initiative by Crocs, the move created lots of attention and interest for the brand. In fact, showcasing genuine commitment to serve consumers contributed to the company’s 52.4% growth in e-commerce revenue in Q2 2020!
This shows that it never hurts to do the right thing… especially the right thing for consumers!
According to Kya Sainsbury-Carter, Microsoft Advertising’s Vice President of Global Partner Services, building customer loyalty in the case of Crocs boiled down to nurturing brand love and trust.
She said,
“Companies that lead with purpose are more trusted and more loved. Purpose enables them to endure and even thrive through tough times because it inspires their employees, their communities, and their customers. Purpose allows companies to respond in times of uncertainty with clarity.”
Well done, Crocs… and congratulations for proving that the beauty of a brand isn’t seen in the physical appearance of its products or services, but in its authentic commitment to serve customers!
In the past five years, Crocs, Inc. has recorded revenues of:
- USD 1.0 billion in 2016
- USD 1.0 billion in 2017
- USD 1.1 billion in 2018
- USD 1.2 billion in 2019
- USD 1.4 billion in 2020
The numbers show that Crocs’ strategies of staying true to its core, embracing its “ugly” self, and showing genuine service have positive impacts as the company recorded a steady revenue growth in the past 5 years.
Crocs, Inc.’s Earning Power: Valens Research vs. As-reported numbers
Crocs, Inc. (CROX:USA) makes for a great case study that we come back to regularly. One great reason?
The company has proven itself to be a better earning power generator than investors might think.
So, how well has CROX been growing its business in the past years?
The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results higher on average than what traditional databases show.
The blue bars in the chart above represent CROX’s earning power (Uniform return on assets). Historically, CROX has seen generally robust profitability. Its Uniform ROA ranged from -17% to 42% in the past fifteen years, or an average of 13%. Uniform ROA is at 35% in 2020.
The global ROA is just 6%.
The orange bars are the company’s as-reported financial information. If you relied on these numbers, you will see a company with understated profitability. As-reported ROA (return on assets, a measure of earning power) only ranged from -12% to 32% in the past fifteen years. Its as-reported ROA in 2020 was only at 17%, which is 2 times lower than its Uniform ROA in 2020.
That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.
The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Its returns have been well above the market.
The numbers show that CROX has been doing well and making a profit.
Any true Crocs fan will say that while the brand’s shoes are considered “ugly,” they’re comfortable to wear… and providing casual and comfortable shoes is what the company focuses on.
More than the physical appearance of its shoes, Crocs believes “comfort is the key to happiness.” That’s why the company ensures the comfort its clogs bring makes the world a happier place.
With constant pursuit of new comfort technologies, Crocs only asks customers to do one thing:
“Come as you are.”
As customers do that, Crocs will do its job to make them feel comfortable―one pair of shoes at a time.
Isn’t that one of the most beautiful things an “ugly” shoe company can do?
“Comfort is not a trend, it’s a way of living. People aren’t willing to compromise anymore. So, we’re strengthening our strengths.”
– Stefano Ferniani, Crocs’ Senior Director of Global Innovation
About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”
Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.
…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.
The true ROI in marketing can’t be separated from the business as a whole.
What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?
At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.
Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.
However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).
By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.
We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.
Hope you found this week’s marketing marvel interesting and helpful.
Stay tuned for next week’s Monday Marketing Marvels!
Cheers,
Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
Powered by Valens Research
www.valens-research.com
