Can the Crocs brand step out beyond footwear?

When a business launches with an iconic product, it may discover, sometime down the road, that the product is on the verge of icon wear-out. Business growth slows. It’s in these situations that the brand must come to the rescue. That’s because the brand (when properly conceived) includes the customer in the icon. This is a critical step, because customers are infinitely protean, proactive and (self) sustainable. They never wear out.

When your iconic product falters, it’s time to tap into your iconic customer—the one created by your brand.

The Crocs brand in transition

We can see elements of this brand transition taking shape in Crocs, the highly successful, breakout brand of colorful foam clogs. Crocs has the daunting challenge of building (and sustaining) the Crocs brand beyond its original comfy beachwear cachet. As pointed out by the Wall Street Journal, Crocs is rapidly diversifying, and none too soon. The brand is under particular pressure from short sellers who are betting that Crocs is a fad—and not a sustainable brand.

Short sellers vs. the brand

Short sellers currently hold about 20% of CROX shares. According to the Journal, holders of short positions believe that Crocs is a one-trick pony, a fashion craze that will soon crash as customers lose interest and move on. In the short seller view, Crocs are Krispy Kreme for the feet.

In essence, short sellers believe that a company’s share price has overshot its brand. They profit when a stock price falls. A typical short-seller assessment is here. (Investors with short positions can lose their shirts when a stock price rises, so short seller assessments have a vested interest in being negative.)

And Crocs imitators everywhere

The Crocs brand challenge is even more difficult because there are scads of Crocs clog imitators in the market, selling at one-third the price—around $10 in the SF Bay Area. They may lack the segment-leading Crocs design and engineering, but their ubiquity testifies to a market for inexpensive foam-clog “fun shoes.” (Crocs has aggressively protected its brand in court.)

Where does a brand go for its second act?

So, what does a company do when 20% of its shares are visibly being bet against the brand, and low-price icon-imitators are everywhere? Where does a brand go for its second act?

It usually has two choices:

  1. Reach back into its marketing bag of tricks to keep its head above water.
  2. Reach out to customers to change the game, and get back on dry land—in a space it can own.

Call in the Ansoff Matrix

A first marketing step is usually to fill the whiteboards with some version of the Ansoff Matrix, so a company can systematically probe opportunities in Market Penetration, Market Development, Product Development and Diversification.

Crocs seems to be doing just that.

As the WSJ article notes, Crocs is diversifying into apparel, with Crocs branded shirts, pants and jackets. (The immediate brand connection is apparently that croslite, the plastic resin from which Crocs footwear is made, will somehow be incorporated into the apparel. From the Crocs site it’s not yet clear how this will be done, or how it will add new value.)

Crocs is also doing sponsorships (Pro Beach Volleyball), folk/rock campus tours, segment licensing deals (Disney, NBA, MLB, NFL, NHL), moving ahead with customized shoe add-ons via an acquisition, and developing new footwear lines, including mammoth, a fleecy Crocs made for cold climes. There is also CroxRx for pediatric purposes, Crocs work shoes (potential markets for nurses, waiters and other service personnel), a substantial kid’s line, and new leather and canvas shoes (with croslite soles).

Limits of the Ansoff Matrix

Of course, the critical element that’s missing from the Ansoff Matrix is “brand.” By forging special connections with customers, brands can create separate value streams over and above the Ansoff quadrants. The Ansoff Matrix is a great tool, but it’s not enough to lay the basis for a brand. It reflects an industrial perspective, predicated on Company A selling stuff to Customer B. It lacks a brand dimension, and most critically, a customer dimension (where the customer is not a “target”).

At some point you have to set the Ansoff Matrix aside, and ask the question: How can we create the customers that will drive our business forward? This is a brand question, best answered by brand solutions. It’s at the core of the brand builder’s mission: Grow the customer, grow the brand, grow the business.

A key test for Crocs is how it advances beyond the linear marketing framework of the Ansoff Matrix. To do so, its challenge is to embed the Crocs brand in the nonlinear, dynamic element of customers. That’s the territory where brands can flourish, and where brand-building begins.

About half the posts in this weblog point out ways that companies can make this happen.

Fad, or game-changer?

The best way for Crocs to free itself from the “fad” label, is to change the game—so it no longer swims (or treads water) in a fad business. Changing the game is a function of brand, and as I’ve noted previously, to change the game you have to change the customer.

In this transformation, the customer ceases being a “target” of a selling process. Instead, the customer is re-defined and re-created with new cultural roots, emerging on a richer and more proactive cultural plane—and one that’s beyond the reach of competitors. This is a cultural process more than a marketing process. It’s one reason brand builders are cut from Dionysian cloth, rather than from spreadsheets.

Some thoughts on Crocs going forward

Croslite, for all its value, can’t be the defining element of Crocs going forward. The defining element has to be the Crocs customer.

Brands are best worn on the inside. You can try to place them there by drilling customers with brand messages, but a better method is to create customers with the brand at their core, ab ovo. “Creating customers” is the Crocs brand priority.

The Crocs brand can learn from Absolut. The Swedish distiller transformed an industrial chemical process into a work of art (thanks to TBWA, of course).

Brands are an element of culture, not commerce. When Crocs anchors its brand strategy in cultural values, rather than in the product, whole new dimensions of products can arise for new classes of customers. For example, the Crocs scutes is currently positioned as an “apr├Ęs sports slide.” I’m sure it functions well in that regard, but that kind of “positioning” really seems right out of an Ansoff Matrix exercise where the question was: What can we possibly do with this one? That’s not building a brand. That’s more like filling out a form.

In a new cultural context, the scutes, or something like it, could be every bit as powerful as the original Crocs clog.

Photo: The Jamoker — Flickr

3 Responses to “Can the Crocs brand step out beyond footwear?”

  1. Kid Product » Blog Archive » Can the Crocs brand step out beyond footwear? Says:

    […] Can the Crocs brand step out beyond footwear? When a business launches with an iconic product, it may discover, sometime down the road, that the product is on the verge of icon wear-out. Business growth slows. It’s in these situations that the brand must come to the rescue. That’s because the brand (when properly conceived) includes… […]

  2. Ben Bacon Says:

    Honestly, why must nearly every strong brand line-extend itself? Crocs has made a strong niche for themselves by being first in their category (whatever it exactly is), and by appealing to smaller venues (like volleyball and folk artists).

    Crocs are the categorical generic for spongy flip-flops (or whatever they would call them). If I say “what are Crocs?” they response will come back, 100 times out of 100, “those crazy, ugly flip-flop things.” By expanding their line, they are weakening their core. The idea of Mammoth Crocs could be a winner, but moving north of the foot is uncharted (and frankly unwelcome) territory.

    By expanding their base to include the major four sports (baseball, basketball, football, and hockey), they are abandoning the very crowd which has made them into a cultural phenomenon.

    Brands die. If Crocs are indeed a pair of Zubaz for your feet, then they will die their natural death. Crocs needs to realize that, and instead of fighting it, pour their money into their next innovation, and into their next brand name.

    What should Crocs do? Slow down everything! Feed a fad, it will explode. Starve a fad, and it will stay for a long, long time. Beanie Babies are one of the greatest examples of starving a fad. The “shortage” of Beanie Babies was nothing more than clever marketing, after all! Alas, one can buy Crocs at every turn. They have brought the crash of the fad upon themselves, all in the name of greed and growth! Shame on a brand!

  3. Brian Phipps Says:

    Ben —
    Thanks for your comment (and sorry for this belated response). I agree with you that one of Crocs major hurdles is to fuse innovation into the brand. The problem they face is that they are starting with a product—a funky foam shoe—that has a limited innovation upside. There are only so many ways you can slice and dice the permutations of such a product. My point would be that ultimately it’s fruitless (brandwise) to approach the customer through the shoe. Being a “fun” product also limits their brand horizon.

    As I see it, the Crocs brand needs customer innovation more than it needs product innovation. Instead of being a brand of “footwear,” or “croslite,” Crocs has to become the brand of a new kind of customer.

    I say this even as a lot of my friends love their Crocs and wear them year around, everywhere. Of course, in San Francisco that’s not too hard.