CROCS TO DOU­BLE IN­DIA BUSI­NESS IN THREE YEARS, IN­VEST HEAV­ILY IN DIG­I­TAL ME­DIA

Images Retail - - CONTENTS - – By Shubhra Saini

Crocs – the slip-on plas­tic clogs and flipflops– have be­come a niche trend.

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 the 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, Bhavna Te­wari, E-com­merce and Mar­ket­ing Head, Crocs 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 per­cent 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 per­cent 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 per­cent 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 col­ors and every sea­son we have over 1000-plus de­signs. Roughly 60 per­cent 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 per­cent. 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 per­cent

of the brand’s busi­ness comes from Women and 20 per­cent is from Kids. Given the so­cioe­co­nomic 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 per­cent to 30 per­cent. We see it grow­ing to 35 per­cent fur­ther.

For kids, the de­mand is largely led by the need for light­weight 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 per­cent 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 dif­fer­ent – 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 so­cial me­dia plat­forms. Since we are in­vest­ing in celeb en­dorse­ments, we feel that the dig­i­tal in­vest­ments will have to be com­ple­mented with that in 2017. We in­tend to in­vest six per­cent of our busi­ness plan on mar­ket­ing ac­tiv­i­ties – as a per­cent­age this fig­ure may not go up but as dol­lar value it cer­tainly will.

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