How this marketing director kicked off a viral phenomenon and created an attractive footprint for an 'ugly' brand.
October 08, 2007
It's safe to say Ed Wunsch no longer has to ask people to walk a mile in his shoes.
Earlier in his career, such a plea for empathy might have fallen on deaf ears. After all, Wunsch's challenge since 2005 has been to market Crocs—those clunky, brightly colored shoes filled with holes—to a buying public obsessed with the latest labels and fashion trends. It's not what you'd call a marketer's dream job, yet Wunsch, 32, and his cohorts at the Niwot, Colo., footwear company, have demonstrated a magic touch in turning this frog into a fairy princess. Wielding an unexpected marketing formula that embraces its own product as "ugly," Crocs has ballooned into an estimated $820 million business, with more than 50 designs in a reported 25,000 stores worldwide. Not shabby for a $30 plastic item conceived as a boating shoe.
"We wanted to have something that would make people stop and notice us, and that came from the realization that we could make fun of ourselves," said Wunsch, speaking of the brand's first ad campaign from 2005, tagged "Ugly Can Be Beautiful." The print effort featured the now ubiquitous foam clog being worn by a teenage boy with braces and a slack-joweled pit bull. "We had to find visual elements that would make magazine readers wonder why on earth we'd choose to promote our brand this way."
Like other fashion brands that seemed to arise from nowhere (Von Dutch comes to mind), Crocs owes its cachet less to mass marketing than to star-studded evangelists (everyone from chef Mario Batali to George W. Bush; see right) and good old word of mouth. That, plus selective partnerships such as its AVP [Assn. of Volleyball Professionals] sponsorship and Disney, NHL and NFL licenses, to this point, has given the Crocs brand all the support it needs.
"They don't do a lot of [traditional] advertising, per se. The viral marketing was really what has made Crocs grow," said Angelique Dab, senior analyst at Nollenberger Capital Partners, New York. "Now on a global scale, people are continuing to talk about Crocs."
Richard Polk, owner of the Boulder, Colo.-based Pedestrian Shops, said that he's still selling thousands of pairs of Crocs each month. When he bought a few hundred pairs of the Mammoth—a closed-up, sheepskin-lined style for winter—he sold out within 10 days of receiving the shipment. "It's a real feeding frenzy," he said. "It remains a very impressive business, and we give a lot of space to the Crocs product in our store."
Industry observers note that Crocs' willingness to branch into more fashionable footwear categories—including its "You by Crocs" collection of more upscale high heels and boots, with its $150-300 price points—has been the key to driving the brand's growth of late.
"They acknowledged that the original Croc [clog style], for all its funky heritage with nurses and chefs—and all its endorsements—was still a pretty ugly shoe," said Candace Corlett, partner at WSL Strategic Retail, New York. "Their new styles are making it a bigger business by leveraging the heritage of the brand . . . They've made themselves more acceptable to people who want comfort and fun shoes but also fashion."
By now, the Crocs story in business circles is well known. Founders Lyndon Hanson, Scott Seamans and George Boedecker started the company in 2002 to market a lightweight, foam shoe. The first style, dubbed "Beach," was intended for boating since its slip-resistant material provided support and comfort in wet conditions; it was first sold at the Fort Lauderdale Boat Show in November '02. Ron Snyder, an old college buddy of the founders, joined the company in 2004, eventually taking the CEO position. Snyder made his first move that year by buying out Finproject NA, the Canadian manufacturer that produced the foot-wear and owned the formula for the shoe's Croslite foam technology. The ability to quickly replenish orders, bold colors and a low price were a boon for retailers and value-conscious consumers.
At roughly $1 million in sales for 2003, the company sold 9.9 million shares for $21 apiece in a February 2006 IPO. Last year, Crocs posted $354.7 million in sales. In 2007, Crocs said second-quarter revenue nearly tripled to $224.3 million, from $85.6 million, last year. This, on a minimal marketing budget with a mere $2 million in ad spending in the first six months of this year, per Nielsen Monitor-Plus.
To hear Wunsch tell the story, the fresh approach to selling footwear has its origins far removed from the shoe biz: computer programming. After graduating from the University of Southern California with a marketing degree in 1999, Wunsch joined some schoolmates in a start-up venture. The team used algorithms based on search engine requests to generate profiles of Internet surfers that could better target products to users. The company was acquired in 2001 by an outside firm, and Wunsch went to work on a few other projects back home in Boulder, Colo., where he became interested in a new footwear venture being pursued by family friends.
"I always had an urge to do consumer products," said Wunsch, one of the two original people in a marketing department now in the double digits. "The founders and I all had technology backgrounds, where things are so fast-paced and innovation-oriented. We brought a fresh, new perspective to stagnant footwear marketing. That's definitely translated into success."
Wunsch takes his inspiration from various sources. He was struck as a child by the Spike Lee-directed spots for Nike Air Jordan and Apple's iconic 1984 TV commercial. "I was always looking at advertisements as a kid, and I remember flipping through the magazines and I was always grabbed by the images that got people talking," he remembered.
Years later, he was moved by the New Age marketing touchstone, Alex Wipperfurth's Brand Hijack: Marketing Without Marketing. The book urged marketers to build legions of ambassadors by putting control of the brand in the hands of consumers. It was a lesson well taken by Wunsch, who keeps an eye on what's being said about Crocs in the blogosphere.
"We rely on our consumers to do the blogging for us," said Wunsch. "It's hysterical. If you type in the phrases 'I love Crocs' or 'I hate Crocs' into Google, you get a million responses back and, good or bad, those responses are all people [who] have an interaction with our brand. And I love that."
This year, Crocs has unleashed its most ambitious marketing plans to date. In January, the company picked up licenses from the NHL and NFL to produce their logos on products, and shortly thereafter acquired Fury, a Canadian manufacturer of hockey equipment and apparel.
In February, it inked a licensing deal with Nickelodeon icons Dora the Explorer and Sponge Bob Square Pants, as well as a series of Warner Bros. characters. The brand also scored a pact to use the logos and imagery of Nascar drivers, including Dale Earnhardt Jr. and Jeff Gordon.
A deal with Marvel comics followed in May, alongside an agreement to do a select "Bistro"-style shoe in a partnership with celebrity chef Mario Batali. In August, the company announced that this holiday season it would debut a men's, women's and children's apparel collection, with select men's styles incorporating its Croslite comfort technology.
When Wunsch sat down to reflect on this breakneck year, he'd just returned from one of the six campus tours that Crocs is conducting among its 24 sponsored Division I collegiate athletic departments. The company had done an earlier tour with its Nascar sponsors, in addition to a Honda-branded ski tour, and a smattering of other marathon, biking and concert events across the U.S. Crocs had also just announced that it was extending its official title sponsorship of the AVP Tour for the next five years.
"It gives us a national platform to go around to all of these different U.S. markets and seed our product to the consumers," said Wunsch. "Every area that we came out of, we saw the sales in that market grow, so there were results that we could see tied directly to our marketing activities."
Wunsch acknowledges that the next hurdle for the company will be realizing Crocs' full potential as a global brand.
"We want a consistent message going out over the whole world," he said. "We want to keep the unexpectedness and discovery within our product lines, so that people have that unique experience every time they see our product." b
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