Crocs – the slip-on plastic clogs and flipflops – have become a niche trend. They are cool, the in-thing, shoes for all occasions. Founded by Scott Seamans, Lyndon ‘Duke’ Hanson, and George Boedecker, Jr., Crocs were originally developed as boating shoes. The first model produced by Crocs, the Beach, was unveiled in 2002 at the Ft. Lauderdale Boat Show in Florida, and sold out 200 pairs produced at that time. Crocs came to India in 2007 in a joint venture with Chogori India. Today, it is hoping to earn at least one-third of its overall revenue from the casual footwear category by 2019. The brand operates in over 90 countries around the world. Talking exclusively with IMAGES Retail, E-commerce and Marketing Head, Crocs, Bhavna Tewari divulges brand’s future plans.
What is Crocs’ current market share in India? Is there are a target you have set your eyes on in the future?
We are growing at over 35 per cent year-on-year. In terms of outlook, we will be doubling our India business in three years and to achieve this, we will be widening our product portfolio and going in for geographic expansion. We are also looking at expanding beyond our core beachwear offerings. We plan to expand our brand to a pure casual footwear brand. Over four-five years, we want to be a larger player in the casual footwear category and capture 10 per cent market share.
Globally, we have sold 55 million pairs in 2016, out of which we sold 1.5 million pairs in India. At present, the company has 1,000 points of sales including over 52 exclusive stores. Our standalone stores will be an important channel of growth for us, going forward.
What is your reach in terms of the total number of outlets and cities?
In India, we are present in six metro cities with 52 stores that contribute to 50 per cent of our total revenue. We plan to open 50 more stores by the end of December 2017, across the same metros and in Pune, Ahmedabad, Chandigarh, plus four to five new cities.
Besides geographical expansion, we believe that the future of e-commerce lies in the brand’s own store rather than other online marketplaces. This calendar year we are adding over 300 point of sales (POS) and in the long run we will have close to 2,500 POS, out of which 250 will be our exclusive stores.
How big is the market for your products in India and what is the growth rate? What are the factors propelling the industry’s growth? Please tell us about some of the trends you have been witnessing in your industry in India over the past few years.
India is a growth engine for our brand. In fact, our product launch (we launch new designs and silhouettes every season) happens in sync with our global markets. Crocs is known to offer a wide variety of options to customers, roughly 500 new styles every season. Add to these styles various colours and every season we have over 1,000-plus designs. Roughly 60 per cent of the global styles are brought to India.
What is your market positioning and customer profile?
Crocs as a brand is loved by every kid, though the percentage of contribution from kidswear sales is around 20 per cent. Kids are the main decision makers in a family for impulse buying, and that helps us get into every household possible. Half of our business comes from men, 30 per cent of the brand’s business comes from women and 20 per cent is from kids. Given the socio-economic demography of India, our target group is largely between 18-30 years, men and women. We are progressively and steadily growing our business in the women’s category – in the last two years, we have grown this segment from 18 per cent to 30 per cent. We see it growing to 35 per cent further.
For kids, the demand is largely led by the need for light-weight comfortable shoes. The 35-plus age group also buys Crocs for comfort. There were some gaps in the 16-28-year-old segment. We looked at what was missing. Crocs are known for clogs, flips (V shaped) and slide, but you can’t wear them to work or parties, so it becomes ‘glorified home wear’ or travel wear. That’s where the innovation started.
In 2013, our entire product segmentation changed. We got into boots, shoes, wedges, flats and booties. We still don’t call ourselves a fashion brand. We call ourselves a fun, casual brand, with a fashion orientation. Designer Christopher Kane in London Fashion Week had a whole line on Crocs. In India, we will develop something on the same lines.
Over 44 per cent of our business comes from loyal customers. Generally, a customer will own one pair of Crocs. The product is durable and lasts for three to four years, after which you get bored, and give it away. So, increasing the penetration in each household is important.
Give details about the product range available at your stores.
Our footwear are made of the Crocs patented technology called CrosliteTM. We have our basic product – clogs, as well as gender-specific products ranging from block heels, wedges, sandals for women and leather shoes, canvas sneakers, and loafers for men. The price range varies from Rs 1,500 and goes upto Rs 8,000.
What is the average size of your stores? What are your various store formats?
The average size of a store is 350 feet. However, as a brand we don’t invest in opening stores, since we operate out of a franchise model. We have two store formats EBO and MBO, they both differ in the products that are stocked, which can be only exclusive to an EBO or an MBO, the pricing will be the same and the kind of customer flowing in will always be diff erent – an EBO in all likelihood will have a brand loyalist walking in and at an MBO, we would have customers who are exploring other brands as well.
What is your marketing strategy?
We have identified that adding more physical stores so that people can actually experience Crocs will be the growth engine for us. This will also allow us to have a relatively larger control on what we sell, how we sell and ensuring customer satisfaction.
Globally, the brand, which till now didn’t have celebrity endorsement, has signed actor Drew Barrymore and WWE champion John Cena. For the Indian market, we will roll out our mass media activation this year, something that hasn’t happened in our ten years of existence in India. We don’t want to confuse the customer with Indian celebrity endorsement. We will, however, do activation on television and films for our brand to reach out further among our customers.
Are there any interesting concepts or innovations you have introduced at your stores?
The brand is investing heavily in the Visual Merchandizing space to enhance the overall look and feel of stores.
How focused are you on e-commerce? Explain your online strategy in detail? What percentage of revenues comes from e-commerce currently, and how high do you expect these numbers to go in the next few years?
Digital media is absolutely relevant for all brands and the growth of brands. For the last three years, we were only investing in digital media. Those investments will grow. Though we will invest in mass media advertising, our digital media investments will double this year. We will continue being active on platforms. Since investing in celeb endorsements, we feel that investments will complemented 2017. We intend six per cent of business plan on marketing activities as a percentage this figure may not up but as dollar it certainly will.