The year was 2007 and Crocs, the hole-filled, orthotic foam shoes, were everywhere. In addition to becoming the it-item for suburban teens (and tweens) across America, they burst the celebrity bubble, gracing the feet of future Duchess Kate Middleton and then President George W. Bush. Indeed, the brand had transformed over a six-year period from a humble, sustainable shoe to a bona-fide member of the cultural zeitgeist raking in over $800M in annual sales.
But the success would be short lived. By 2009, the company was nearly bankrupt, a victim of declining sales, escalating losses, and rapidly shifting consumer sentiment. By all accounts, this should have spelled an end, relegating the brand to a graveyard of consumer trends come and gone.
Yet, remarkably, Crocs pulled off the seemingly impossible. Beginning in 2017, the unassuming shoe began a slow climb, inking partnerships with fashion houses Christopher Kane and Balenciaga. But Croc’s real acceleration came during Covid-19 as its comfortable aesthetic and affordable price point made it the perfect brand to become the “Unofficial Shoe of the Pandemic.” Crocs embodied the vibe (retro, #throwback), the feeling (comfort, individuality), and met the need (glorified slippers for lives lived at home). Over the past three years, the company’s stock has grown almost 550% — equivalent to an 87% CAGR.
Needless to say, I’m both fascinated and obsessed. What can we learn from Crocs — and from other companies that have engineered varying rebirths? And crucially, how does the current environment affect the longevity and resiliency of consumer brands?
Where Are We Now?
Over the past decade, the general trend among venture-backed companies has been towards longer holding periods. Warby Parker is set to IPO 11 years after launching. Sweetgreen will go public after 14 years. Glossier was founded 9 years ago and still has no announced plans for an exit. Between 2000 and 2018, the mean time to exit following a first financing increased by four years. During the same period, the trend cycle has only continued to accelerate, spurred by the rise of social media, fast fashion, and globalization.
If there’s one theme emerging in 2021 it seems to be speed. Teenagers are reaching TikTok stardom overnight. Influencers are no longer posting weekly or daily but hourly, even minute-by-minute. Apps are exploding to the #1 ranking on the App Store less than a week after launching. Our favorite trends seem cool until a 16 year old on the internet declares them cheugy and they become passé overnight.
The Roger’s adoption curve is a helpful framework to understand the pace at which groups may adapt to new behaviors or products. I like Allen Gannett’s take on this framework with what he has named the Creative Curve. Based on this idea, the most opportune time for brands is often in the “sweet spot” as interest is rising but hasn’t yet peaked. Yet, while the creative curve might have previously played out over a period of years (or months, or weeks), in 2021 it is playing out over a matter of days.
Thus we are left with an interesting consumer quandry — if companies are taking as long as twelve years to exit but trends have shortened to less than twelve month periods, how can brands be expected to keep up?
A Framework for Resilience
In light of this seeming conflict, what can we learn from Crocs — and from other brands that have engineered varying rebirths? Are there shared factors across consumer companies that lead to resilience across trend cycles and longer periods of time?
1. Build your bank
It’s interesting to think about brand equity like a bank — a metaphorical pile of coins if you will. Positive attributes like glowing customer reviews, a killer social campaign, or spotting the brand in the background of your favorite TikToker’s collab house all help to grow this pile. But, threats to brands are still and have always been, inevitable. No one needs reminding of the ever present, looming threat of cancel culture.
In the case of Crocs, these moments emerged multiple times throughout the company’s history. After brushing with bankruptcy in 2009, being named to Time’s list of 50 Worst Inventions in 2010, and spawning a blog aptly named “ihatecrocs.com,” the brand appeared to be circling the drain. Further damages came in 2017 when celebrity chef Mario Batalli, one of its most well-known customers, was accused of serious sexual misconduct charges and in 2018, when the company announced the closure of a third of all stores. To say this was a bad look would be an understatement.
In light of this, the past three years were a surprising banner period for Crocs. The brand intentionally sought out collaborations with high-fashion houses Balenciaga and Christopher Kane, helping to build a halo of luxury, quality, and relevance. It welcomed endorsement from VSCO girls across America and built out a full influencer & partnerships team. When images of the iconic shoe on the heels of Justin Bieber, Helen Mirren, and Nicki Minaj went viral, adding shiny coins to the Bank of Croc™, it was not an accident but the result of careful work and foundation setting.
If there’s a lesson here, it’s that strategic building (and replenishment) of brand reserves is crucial. This bank analogy is not meant to endorse coverup schemes and attempts to drown out genuine critical feedback with a slate of positive marketing. Brand equity can’t and shouldn’t gaslight consumers on real issues. But, these positive associations can help rectify historical slights and provide a critical buffer against future superficial damages.
2. Emotions, not trends
One of the most impressive features of Crocs is how well the brand has tied itself to an emotion. The company has managed to make its rubbery clogs synonymous with comfort, relaxation, and nonchalance. “Come as You Are” is its official slogan, a bold proclamation of individuality and authenticity. Perhaps the best place to understand the feelings evoked by Crocs is to visit one of the meme pages devoted to humoring the Croc lifestyle (yes, these exist!).
I’d argue that this success in creating emotional connection with customers was a primary driver behind behind the brand’s resurgence. This is not to say that the company didn’t also take advantage of trends. Certainly, it did (see: high heel Crocs, tie dye, Jibbitz). But, as Crocs dug itself out of its post 2009 hole, the brand’s association with empowerment and comfort allowed it to adapt to and endure a slew of trends: athleisure, streetwear, VSCO girls, WFH fashion.
It’s a helpful exercise to consider: what is the emotion that encompasses your product? Are you selling a hole-filled shoe or a solution for ease and relaxation? Is it just another pair of footwear or a way to empower your customers to be comfortable in their own skin? Perhaps most importantly: how can these feelings transcend a churning cycle, creating a connection that lasts?
One framework I love around this idea was sketched out by Natalie Fratto and based off principles from restauranteur Danny Meyer (reproduced below).
The idea is that it’s easiest to scale a product, harder to scale a service, and most challenging to scale a feeling. Here’s my take: while consumers might buy a product once because of a trend, they’ll buy a product twenty times because of a feeling. Ultimately, it is that ability to evoke a feeling in customers that creates the highest impact and value.
3. Refresh, rebrand, reboot
One of the most impressive features of Crocs has been its ability to rapidly pivot. Over the past five years, these changes have included: fresh leadership, revised manufacturing strategy, a new HQ, refocused product offerings, re-invented social media marketing, and constantly evolving partnerships.
While all these aspects of change are important, I want to narrow in here on Crocs’s social media use and partnerships as a case study (which I originally covered last year if you’d like to read more). Although it’s hard to imagine now, in October 2020, very few mainstream brands had yet to build content on TikTok in a meaningful way.
Crocs was an early TikTok pioneer, producing a campaign that included a custom song (“Strap Back” — a veritable earworm) and tapped some of the platform’s fastest growing influencers to participate. Crocs struck gold: #StrapBack exploded to over 6B views and outlets including Slate and GQ proclaimed Crocs as the fall’s coolest accessory. Most importantly, fourth quarter online sales were up 92% over the prior year.
At the time, other brands had largely stuck to an established playbook of Facebook and Instagram ads, traditional celebrities and influencers, and glamorized content. Yet, Crocs leaned into an emerging platform and took a risk on rising stars with a campaign that felt relatable and fun, rather than slick or aspirational. It worked. What’s the lesson here? As online spaces accelerate and evolve increasingly quickly, the brands that take bets on new figures, platforms, and trends stand to position themselves for outsize upside. As Crocs has shown, it can be worth it.
Looking Toward the Future
The past two years have seen a rapid escalation in the amount of companies being launched. In the U.S. alone, 4.3 billion businesses filed for incorporation in 2020, up 24% over the prior year with 2021 expected to well surpass these figures. Furthermore, we’re in an environment of plentiful capital. This is both a blessing and a curse as an increasing number of venture-backed consumer brands are now beholden to executing on a VC time horizon and its resultant pressures.
Paid ad marketplaces are growing increasingly expensive with less and less effective results, proven out by this summer’s iOS-pocalyspe. Reaching customers both organically and via paid ad spend is becoming more and more challenging.
It’s safe to say that in the face of this escalating competition and marketplace pressures, building resilient, enduring brands is only becoming more crucial.
Additional reading on branding & the changing digital landscape:
Tasha Kim is an investor passionate about early-stage consumer companies and their intersection with cultural trends. The thoughts expressed in this article reflect her personal thoughts only.