Why Crocs customers don't need an omni-channel experience
- Summary:
- Iconic footwear brand Crocs has discovered some of the conventional wisdom about omni-channel experience and digital commerce doesn't apply to its customers
Mobile app? No point, says Harvey Bierman, VP of global ecommerce technology and operations.
Our customer purchase lifecycle is two per year. That's why we don't have an app.
That's not to say the brand can't increase sales by engaging with customers. It's just that its customers aren't buying frequently enough to be kept engaged with an app. The company has to find other ways to connect with them.
Crocs is best known for its colorful and distinctively shaped plastic clogs, first launched in 2002. Molded from a proprietary compound, the clogs are still the mainstay of what is now a global, $1 billion-a-year business, sold in 90 countries.
The brand has also diversified into sandals, sneakers, boots and even leather shoes, while offering variants on the original design, including special treatments and embellishments. But the expanded range is not what the general public thinks of when they think of Crocs, says Bierman.
Not everyone knows a lot about Crocs. What we call classic, most people call Crocs. You'd be surprised how many people come to our website and then search for 'crocs'.
People often buy Crocs on impulse, and many of the brand's own stores are in popular vacation destinations. The challenge for Crocs is, how does it turn that impulse into a regular habit? Opportunities to extend the relationship include getting parents to come back for new Crocs as their children grow older, getting mums to buy for their partners as well as themselves, and generating interest in different styles and formats.
Buying on impulse
Collect from store is another multi-channel mantra that isn't so important in the Crocs universe. Customers are either buying on impulse when they walk past the store, or they're making a planned purchase online from home, says Bierman.
Store-based fulfilment doesn't make a lot sense for us. It's about having them walk out the store wearing the shoes on their feet.
The company does operate an 'endless aisle' capability, which lets shoppers check in store whether out-of-stock items are available from other locations. In fact, Crocs was an early adopter five years ago, rolling out broadband connections to make the function available in stores on consumer-facing tablets. That did help salvage sales that were being lost because of a replenishment issues, says Bierman.
Now that replenishment is better managed, usage of the endless aisle function has stabilized. And with stores just 800-1,200 sq ft in size, there simply isn't much room to hold stock for collection. 80% of the space has to be dedicated to sales.
Vacation vibe
Although important, Crocs' own stores are not the main channel. Most sales — upwards of 85% — are through retail partners rather than direct. Therefore the digital strategy, which runs on the Demandware digital commerce platform, is centered on building up both indirect and direct sales, says Bierman.
How does our digital presence drive sales of Crocs through all channels?
How do we market our products to your customers is how we think of omni-channel. You're finding large retailers almost becoming media partners. They're almost publishers.
This realization led to the launch last year of the #findyourfun advertising and social media campaign, designed to reinforce the brand's association with an informal weekend and vacation vibe. It is the brand's first global campaign, says Bierman.
What we found through data was our customers are very much the same around the world.
After growing to a billion dollar turnover in just a decade, the business has recently restructured after investment from private equity investor Blackstone. That led the number of websites to go from 22 to 12 as the brand converged its global marketing. Some pruning was in order after earlier rapid growth, says Bierman.
When you build a brand that's a fad, you chase it aggressively. But at some time it becomes about the fundamentals.
Getting to know its customers better has been one of the fundamentals. The company has launched a points-based loyalty scheme so that it can gather data about behavior and drive higher lifetime value. It's using the Custora e-commerce analytics platform to find insights and understand what works best for customers.
It's allowed us to learn how little overlap there is between our e-commerce and our store volumes. That frees us up from some of these external pressures to chase some of these omnichannel issues. It doesn't apply to us.
My take
The Crocs story is a useful reminder that every retail brand is different. Rather than slavishly following all the omni-channel fads, it's important to study customer behavior and find out what's going to work for a specific cohort. For Crocs, mobile sales are really important — Bierman is enthusiastic about the potential impact of Apple Pay because of how much it simplifies the mobile checkout process — but a mobile app isn't worth the investment because purchases are so infrequent.
Similarly, the in-store experience is focused on grabbing your Crocs and heading out, not lingering on the premises. So there's no benefit in driving consumers to visit stores through functions such as click-and-collect.
A multi-channel strategy is still important to Crocs, but what matters most is keeping the brand front of mind so that consumers go on to purchase through whatever channel suits them best. That requires a different emphasis from other brands. Digital commerce isn't a one-size-fits-all proposition.