In Conversation with Deepak Chhabra
What were some of the concerns you had when you joined Crocs?
When I joined Crocs, I knew the brand well from the outside. There were two immediate concerns I had to address. One, our reach was limited because a large portion of our business was only online. I realised that we hadn’t been able to reach our customers by physical retail. We had to make a shift from being available only online. Availability was a restrictive factor and I saw an opportunity in expanding through physical, brick-and-mortar stores. Two, though Crocs is no longer just clogs and flip-flop brand, this piece of communication wasn’t getting addressed to the consumer. So these two concerns I had to address at the outset.
We expedited 14 new exclusive stores between October 2016 and January 2017 in six cities, including the launch of the first travel store at Mumbai airport. We are a brand associated with travel so the travel store at Mumbai airport was a good fit. We have lined up more stores in that format in the next six months. We also decided to expand our regional distribution, to be able to reach out to a larger set of customers. While taking the brand to customers through these stores, we could communicate more effectively. We have grown year on year by 65 per cent and our overall point of sale has extended to 100 stores. This excludes the new, exclusive stores, which have opened in a four-month period.We have grown year on year by 65 per cent and our overall point of sale has extended to 100 stores.
Was it challenging to expand? Crocs, after all, is a high end brand and not a mass market brand.
Yes, we are a niche brand but the way India is changing, we cannot afford to ignore markets where people are becoming fashion forward and aspirational. Our network thus needs to expand. The challenge is to identify our partners, start from ground zero, allow our business partners to understand the ethos of the brand. The biggest challenge was identifying with the right partner and rolling out an effective, strong marketing plan.
Who is your target customer?
Our brand is loved by children even though the business from this segment is just 20 per cent. That said we use kids as entry point for the brand to get into households. Half of our business comes from men, 30 per cent of the brand’s business comes from women and 20 per cent is from kids. Given the socio-economic demographic of India, our target group is largely between 18-30 years, men and women. We are gradually and steadily growing our business in the women’s category – in the last two years, we have grown this segment from 18 per cent to 30 per cent. We see it growing to 35 per cent further.Our brand is loved by children even though the business from this segment is just 20 per cent. That said we use kids as entry point for the brand to get into households.
How important is an emerging market like India for the brand?
India is a growth engine for the brand. In fact, our launch (we come out with new designs every season) happens in sync with global markets. Crocs is known to offer a wide variety of options to customers, roughly 500 new styles every season. Add to these styles various colours and every season we have over 1000-plus designs. Roughly 60 per cent of the global line is brought to India.
Moving ahead, what will be the marketing strategy for the brand?
We have identified that the growth engine will be adding more physical stores so people can actually experience Crocs. This will also allow us to have a relatively larger control on what we sell, how we sell and ensuring customer satisfaction. Globally, the brand, which till now didn’t have celebrity endorsement, has signed with actor Drew Barrymore and WWE champion John Senner. These two celebrities will come live on April 1, 2017, in new markets so we have a better reach. In the Indian context, though we won’t have a separate tieup with Indian celebrities, we have tied up India Beach Fashion 2017 as associate sponsor. For the Indian market, we will roll out our mass media activation this year, something that hasn’t happened in our ten years of existence in India. We don’t want to confuse the customer with Indian celebrity endorsement. We will, however, do activation on television and films for our brand to reach out further to customers.
How integral is digital media for the brand?
Digital media is absolutely relevant for all brands and the growth of brands. For the last three years, we were only investing in digital media. Those investments will grow. Though we will invest in mass media advertising, our digital media investments will double this year. We will continue being active on social media platforms. Since we are investing in celeb endorsements, we feel that the digital investments will have to be complemented with that in 2017. We intend to invest six per cent of our business plan on marketing activities – as a percentage this figure may not go up but as dollar value it certainly will.
You were recently awarded the CEO of the Year award; you have changed a lot in Crocs for the better in six months flat. How do you maintain the balance between your personal and professional life? Is there a marketing mantra you stand by?
It is a feel good factor, to win this award. That said, there’s a lot more to be done for the brand and it is an incentive for me to work harder. Here’s what I typically do: I stay away from social media in office. I believe in giving time slots for everything. For instance, I have my time to read, respond to, and clear my mails. I delegate time for my meetings and for other office-related work. Since I am just six months old in Crocs, I have worked on weekends too. It’s getting better now.
My professional mantra is that I thoroughly believe in customer relationship management. That is the key to succeed. I believe in giving my customers the best experience. I don’t think Crocs as a brand needs to be sold on a discount proposition on e-commerce platform. We are doing everything in our capacity to ensure that the brand value doesn’t get diluted even as it reaches to a larger set of customers.
My professional mantra is that I thoroughly believe in customer relationship management. I believe in giving my customers the best experience.