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Rizen is introducing a new installment, "Phoenix Profiles," and will be regularly profiling several companies that found new life by making smart marketing decisions.
Like a phoenix, Rizen's logo, these companies have "risen from the ashes."
Initially developed as a boat shoe, Crocs first unveiled at the Fort Lauderdale Boat Show in 2002. They're the creative child of innovators Scott Seamans, Lyndon Hanson, and George Boedbecker Jr. They came up with the idea on a boating trip.
Believing that comfort is the key to happiness, they wanted to establish the shoe as a bold and comfortable brand. They quickly succeeded by becoming a staple in households and professions. Albeit lacking the aesthetic appeal, Crocs are easily recognizable internationally.
They saw a full and passionate embrace from healthcare professionals, chefs, and any others who have to work on their feet for hours.
They officially launched as a public company on February 13, 2006 (Money CNN), raising over 200 million dollars.
During the financial crisis of 2008, Croc stock dropped majorly. They went from seeing about $70 a share to just $3 per share. Their image dropped. Their overall appeal waned and became synonymous with an unprofessional worker. More than 100 new styles of Crocs had launched, but the fad was no longer held favorable by the public.
Sales had skyrocketed in the 2000s, reaching $847 million in revenue in 2007 (Washington Post). Production struggled to keep up with the demand initially. When manufacturing finally caught up, the company created an oversupply of shoes to markets that didn't embrace them in the same way healthcare and culinary markets had.
This poor planning left the company with tens of thousands of shoes and no one to purchase them.
By 2008 Crocs were $185 million in debt, forcing them to close down about 75 to 100 stores and slash a third of their workforce. Buried in shareholder lawsuits and adverse auditor's notes, Crocs was inching towards bankruptcy.
Crocs had lost sight of their core market and expanded too far, with little customer support to show for their investments. A new strategy was sorely needed.
In 2009, Crocs hired John Duerden, a turnaround expert who used to run Reebok. He helped them wean off excess inventory and stick to their original recognizable product. By 2010, the company was stabilized and expanding again.
Following a $200 million investment by Blackstone Group, a private-entity giant, Crocs has closed hundreds of underperforming stores and rid themselves of low-selling, unpopular styles. They reopened retail stores in key markets and launched new products to their core customers.
- They've spoken loudly to their most loyal base, healthcare, with giveaways and focused marketing campaigns. Crocs most recently showed support for nurses and doctors during the coronavirus pandemic, giving away free shoes to hospitals in need.
- The company also smartly leaned into their "unprofessional" stigma by unveiling a new line of casual footwear - perfect for pairing with robes and sweatpants. The reception - and sales - have been positive thus far.
- They've shifted their focus back to their classic foam clog, which accounts for almost half of their sales. Their clog revenue went up by 12.7 percent, fueling an unbelievable comeback.
- They've regained the public's favor by strategically collaborating with well-loved celebrities, iconic designer names, and philanthropists (High on Sobriety).
Crocs still treads lightly, focusing only on their core buyer personas and keeping inventory within tight margins. Crocs finally got their big break in 2018. Their stock had become the most virile on the market (Inc.).
As they move into a stable (and bright) future, the company has instilled a restructuring plan aimed at streamlining Croc's operations. They moved their Global commercial center to Boston, Massachusetts.
What was once seen as "just a fad" is now associated with big names, from prominent physicians to models in high fashion. Last year, Crocs was rated the 13th most popular shoe among teenage girls (CNBC), and their popularity shows no sign of slowing down.
What Can We Learn
We can learn several points from Crocs' resurgence as marketers:
- Never forget your core customers. They should always be at the forefront of your content efforts. Even when launching campaigns to new markets, make sure to continue speaking to those already supporting your brand too!
- The public's perception of your brand isn't going anywhere. Embrace and find a way to capitalize. Just as Crocs learned to adopt their negative stereotype, your company must pay attention to the perceptions you can change for the better.
- Never grow too quickly. Make sure the foundation is there before rapid expansion takes place.
- Team up with other people and companies the public already trusts - especially if they do not trust you completely.
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