Dollars & Sense

We Got Sole 🩴

About 15 years ago, I bought a pair of Crocs sandals in Myrtle Beach, SC. Not only were they hot pink, but the insole was traffic cone orange. My buddies hated them, but oddly others loved them. The sandals were affordable (maybe $20), comfortable, and a conversation starter.

According to last week’s The New York Times' profile on Crocs, I’m one of tens of millions of happy Crocs owners. This happiness is profitable:

• Crocs’ sales have almost doubled since 2019.
• It’s on track to do more than $1b in revenue this year.
• In three years time, it hopes to do $5b in revenue.

Oh, and it has 26% margins. I recently read that companies are considered successful if the sum of their margin and their annual growth exceeds the number 40. Using this approach, Crocs may score a 61 (26% margin + 35%+ growth). Many people considered the brand a pandemic flash in the pan like Peloton and Robinhood, but Crocs is a success story.

What can we learn from Crocs? I’m happy to share that there are some common principles between what we follow and what is propelling Crocs. And there are some strategies we're not following and maybe should.

Upgrades: Take the Customer Up the Ladder
Crocs' CEO, Andy Rees, shares that they seek to get sandal customers to become clog buyers. Crocs recently bought Hey Dude footwear and hopes to get these clog customers to buy even one more brand from them. We have a similar goal: we want brands that use the Syncing service to become wholesale ordering clients. We want retailers using the Gift Registry service to adopt the Online Store to sell to the general public. The first upgrade retailers often make is accepting credit cards online. That’s the customer buying the 'sandal' and then the 'clog.' 

Community
The Times' article shares that buyers come for the shoe but stay for the community around it (i.e. compliments on pink sandals). In the Times article, Ms. Alleyne, a Crocs fan, confesses, “You go in for the shoe, then stay for the community.” This feeling echoes Andrew Chen’s observation about coming for the tool and staying for the network.

But we shouldn't confuse upgrading clients for a 'community.' We're getting clients to come for X and stay for Y, but that Y may not be the community. Whereas a community is often a network,  a network may not be a community. We want our community interactions (member-to-member, non-commercial integrations) on the Shop Local platform to be higher. We want more members to:

• Friend and follow other members.
• See friends’ news posts.
• Give likes. 
• Share marketing ideas and files.
• Overall, interact with other members.

When a member has a record sales day, we want their friends on the platform to know and congratulate them. 

Branding: Bigger May Be Better
Crocs sandals stand out not only visually, but they are often heavily branded with the Crocs logo. I’ve noticed popular brands often do this. The North Face jackets with their logo on the back of the jacket come to mind. It makes little sense functionally to have it on the back (does it make sense to have a logo anywhere?), but from a branding point of view, it’s super functional. Logos allow a customer to communicate that they are a quality brand’s ambassador. It shows that the consumer has good taste.

A Crocs logo means comfort. A The North Face logo means technically superior clothes. A Shop Local logo means you’re shopping on a site with the right technology for indies shops—and community values. The other sites without our software are just a ‘croc.’  What if we take Crocs’ and The North Face’s branding approach and add more branding to our platform? Instead of our logo and site credit being in small font at the bottom, we make our logo and site credit larger and have it be akin to a jacket's The North Face logo.

We want people to expect and look for our heart logo on a website when shopping. (We make local e-commerce beat!) Our logo shouldn't be larger than our client's logo, but it could be bigger than it currently is. We want a store owner to feel the same way about our logo as they do about the logo on their The North Face jacket or Crocs shoes. 

Crocs is using a variety of qualities to succeed. Let’s follow in their footsteps to success. 

Homework:
If a customer is using your service X, let’s anticipate what they are most likely to need next—and recommend it. What is the next ‘rung’ on the usage or purchase ladder? If there was a ladder or path that a customer would take, what would it be?  Visualize this. When one does this, they can better make the sale, and the customer will be happier. They get up the ladder more quickly and we reduce their friction of climbing. 

Read the full article about Crocs here:
https://www.nytimes.com/2023/03/27/business/crocs-sales.html?unlocked_article_code=FU-0fp61Wk152F8awTN05azw1vBSRjWT3fS04p6QiNiaQk5bZnnT4EyQ3GE57XJx2ZxTePAMDoyiX4YPIjybN_KmNkx-t8MCD1yDV8erlaHW2G95aaqF8JPgOUOrI7Uz6jlGX_DXBHD-9h7ov-pPfqaqRneV-xmbuzNGWB39zqk5zDDQPPNMDUvFxEVEANlxFPaVdUeLVpxMVyrYC4U-Zbe4IwvB8jIteEbNxU9a9hA4wLZlTQmtReV8FAXti468DsAQyv0Muipuy_tUO7PYJbMta4JYdv-S4P3e_b1b3qjD8IIpfOpovcBwKzJ0SaATpdHos3oR&smid=url-share

Tags:
crocs nyt

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