Guest Opinion: How Crocs got their bite

The views expressed in Guest Opinions represent only those of the author and are in no way endorsed by Richmond BizSense or any BizSense staff member.

Last weekend I wore a pair of “U-Va. orange” Crocs to a football game. I got laughed at, but I learned a valuable business lesson, as well.

A longtime friend sitting nearby looked at the shoes on my feet and broke into a grin. Pleased that she seemed to appreciate my fashion and fan statement, I told her I was glad she liked them. As her smile turned into a series of giggles that attracted the attention of nearby fans, she said “Oh, I don’t like them. I’m just always amazed that anyone has the nerve to wear Crocs in public.”

Half of the people around us nodded their agreement — and they aren’t alone. Crocs are the shoes that people love to hate. More than 1.5 million people are fans of an anti-Crocs group on Facebook.

But a doctor sitting behind us proudly raised his feet — encased in big blue Crocs — and said, “I’ve got three pairs.” A very well dressed 30-something woman in front of us added, “I have 10 or 12 different styles. I love them.”

It turns out that Croc lovers aren’t alone, either. In its first eight years, the company sold 120 million pairs of shoes and, after a rocky couple of years, is making a strong comeback. Sales are growing, and with a gross margin approaching 57 percent, the net income for the last quarter rebounded to $32 million.

So how can a shoe manufacturer succeed with a product that most people seem to hate?

They recognized that changes in the business environment and in the way consumers get their information are combining to create opportunities to build a competitive advantage in targeted markets.

Traditional methods of distribution in the shoe industry require large inventories, long lead times and limited selections. Forced to limit their selection of styles to those that appeal to a broad base of customers, there is limited opportunity to build brand awareness and loyalty.

The founders of Crocs were new to the shoe industry and took a different approach. They lowered costs by introducing new materials. They reduced lead times and inventory requirements by skipping the traditional shoe store distribution channel, and they reduced costs by hanging the shoes on store fixtures instead of using expensive boxes.

Without the need for sales help to try on shoes, Crocs became almost an impulse purchase.

Bright colors and quirky styles attracted the eye of shoppers and could even be tied into affinity groups (red for Valentine’s Day, orange for U-Va. alumni, etc.).

The result has been strong initial sales to a significant market segment and, perhaps more importantly, a loyal customer base that keeps coming back. Crocs now has scores of styles for men, women and kids, and, like the fan with 10 to 12 styles, customers buy multiple styles.

Keep an eye out for me at the game tomorrow. It’s getting cooler, so I will probably be wearing my fleece-lined Crocs.

The views expressed in Guest Opinions represent only those of the author and are in no way endorsed by Richmond BizSense or any BizSense staff member.

Last weekend I wore a pair of “U-Va. orange” Crocs to a football game. I got laughed at, but I learned a valuable business lesson, as well.

A longtime friend sitting nearby looked at the shoes on my feet and broke into a grin. Pleased that she seemed to appreciate my fashion and fan statement, I told her I was glad she liked them. As her smile turned into a series of giggles that attracted the attention of nearby fans, she said “Oh, I don’t like them. I’m just always amazed that anyone has the nerve to wear Crocs in public.”

Half of the people around us nodded their agreement — and they aren’t alone. Crocs are the shoes that people love to hate. More than 1.5 million people are fans of an anti-Crocs group on Facebook.

But a doctor sitting behind us proudly raised his feet — encased in big blue Crocs — and said, “I’ve got three pairs.” A very well dressed 30-something woman in front of us added, “I have 10 or 12 different styles. I love them.”

It turns out that Croc lovers aren’t alone, either. In its first eight years, the company sold 120 million pairs of shoes and, after a rocky couple of years, is making a strong comeback. Sales are growing, and with a gross margin approaching 57 percent, the net income for the last quarter rebounded to $32 million.

So how can a shoe manufacturer succeed with a product that most people seem to hate?

They recognized that changes in the business environment and in the way consumers get their information are combining to create opportunities to build a competitive advantage in targeted markets.

Traditional methods of distribution in the shoe industry require large inventories, long lead times and limited selections. Forced to limit their selection of styles to those that appeal to a broad base of customers, there is limited opportunity to build brand awareness and loyalty.

The founders of Crocs were new to the shoe industry and took a different approach. They lowered costs by introducing new materials. They reduced lead times and inventory requirements by skipping the traditional shoe store distribution channel, and they reduced costs by hanging the shoes on store fixtures instead of using expensive boxes.

Without the need for sales help to try on shoes, Crocs became almost an impulse purchase.

Bright colors and quirky styles attracted the eye of shoppers and could even be tied into affinity groups (red for Valentine’s Day, orange for U-Va. alumni, etc.).

The result has been strong initial sales to a significant market segment and, perhaps more importantly, a loyal customer base that keeps coming back. Crocs now has scores of styles for men, women and kids, and, like the fan with 10 to 12 styles, customers buy multiple styles.

Keep an eye out for me at the game tomorrow. It’s getting cooler, so I will probably be wearing my fleece-lined Crocs.

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Cindy
Cindy
11 years ago

I can’t believe that snarky lady has! the nerve to drive an SUV in public. See, we all have different values and beliefs and have the freedom to follow them. I choose not to be smug about other people’s shoes. With some foot surgery behind me, I can tell you that Crocs have been a godsend for me. Be careful who you feel superior to, you do not know their probelms. If that lady looks down her nose at me, I hope she apologizes for her judgement and snobbery and hypocrisy. And I will not be rude to her for… Read more »

John Anderson
John Anderson
11 years ago

Stan, I am a fellow Croc wearer and have the same Wahoo orange pair, as well as lime green and Carolina blue pairs. Folks like Tim Gunn (Project Runway) who say they “don’t get it” about Crocs have apparently not taken the time to actually wear a pair of these incredibly comfortable footwear items. They are great for wet weather and timing swim meets! Keep the faith!

Tim Kirk
Tim Kirk
11 years ago

Crocs are the best shoes ever for children, easy on, easy off, easy to clean. My son loves his crocs.

I’m not sure about UVA Orange, I actually feel sorry for your football team that you have fans that wear those shoes to a football game and then on top of that they wear shirts and ties, and guys hug each other and sway after a field goal. Notice I said field goal

Go Crocs! UVA??

Cynical_Dude
Cynical_Dude
11 years ago

“…with a gross margin approaching 57 percent…”

Sounds like we’re paying too much!

Tim Jenkins
Tim Jenkins
11 years ago

Thanks for the story. Oh what I tail I could tell. Crocs is more than the brightly colored or black holey potatoes which are on my peds (actually an good knock off that I was forced to buy last week in Daytona Beach) as I type. I have owned at least 3?pairs and worn them all out. Crocs makes other great looking Sanford like the Patricia. They are a fashion WOW even Tim Gumn would love. The former company stuffed the channel and knock-offs hit. The company and stock got truly hammered. I ought to know, I made and lost… Read more »

Stan Maupin
Stan Maupin
11 years ago

Cindy: The “snarky lady” was just pulling my chain. I think she was secretly jealous!

John
John
11 years ago

Like Time Gunn I don’t “get” Crocs. I think they’re ugly and I could never understand their appeal. However if someone likes them and likes wearing them, I say to each their own. To start a Facebook group about how much you hate a pair of shoes is ridiculous and a waste of time. Remember its just a pair of shoes, there are worse things in the world to worry about.

bob
bob
11 years ago

Crocs are for kids. Period. Have you seen what your feet look like after you wear them for a while. Dirt like you wouldn’t believe! They are great dirt collectors, but I love for them for the kids. Add socks for a real fashion statement.

LT
LT
11 years ago

Feeling sorry for people like Tim Kirk who don’t understand traditions and fun and pride in a school….but feeling glad to know others wear their Wahoowa orange Crocs because of their school pride, the shoe’s comfort and practicality, etc.

Wishing I had a pair of purple ones to wear to my son’s JMU football game tomorrow. Bet Tim wouldn’t appreciate that since he sort of sounds like a Hokie fan!

Mike
Mike
11 years ago

I’m indifferent to Crocs but I think it makes a good case study. Earlier this year I heard the stock had taken a beating because, of all things, the product was too well made! So,while loyalty is great, you need to expand your market and/or have repeat purchases and with such a polarizing product it hasn’t happened.

I guess line extensions and additional colors will have to save them. Time will tell.

Patrick Lira
Patrick Lira
11 years ago

I’ve never tried on a pair of crocs…

Joe
Joe
11 years ago

Crocs are VERY popular right now in the United Arab Emirates. A huge international footprint, pardon the pun.