Why Crocs Waited Until 2021 To Launch An App That Will Help the Company Reach $2.5 Billion in Digital Sales By 2026
It may have taken Crocs until 2021 to launch an app. But the company still has high hopes for the new digital channel’s ability to bolster overall revenue.
“Over the past several years, we’ve really spent a lot of time building out [Crocs‘ digital] ecosystem beyond just dot com,” said Crocs SVP and chief digital officer Adam Michaels in an interview with FN. “And I think an app is a natural extension of that strategy and another touch point for us to create direct connections and engage with our customers.”
The clog maker, which will take home shoe of the year at next week’s FNAAs, announced in September it plans to achieve $5 billion in sales by 2026, which would represent a compound annual growth rate above 17% with 2021 as a base year. Digital sales are a key part of this plan, with a goal to have 50% of its total revenues to come from digital channels by 2026.
In Q3, digital sales grew 68.9% and now make up 36.8% of total revenue, compared to 37.7% in 2020 and 32.2% in 2019.
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Michaels said that he expects the Crocs app to be a “meaningful contributor” the this sales goal by boosting Crocs’ digital and DTC sales. But it will also will help elevate certain in-store shopping experiences as well. The app currently utilizes VR technology to offer a “try-before-you-buy” feature and also includes influencer content such as style tips and videos.
“It’s also going to be an important piece of our omnichannel strategy going forward, really connecting our digital world with our physical stores,” Michaels said. For example, the new app will help facilitate the company’s reserve online and pick up in store capabilities, which will ultimately expand to buy online pick up in store.
“We really see the app also as a critical piece of connecting and bridging those two environments, as well as [creating] some unique in-store experiences,” Michaels added.
Like other footwear brands, Crocs has recently focused on sharpening its direct-to-consumer business and slimming down on certain wholesale partnerships. In April, Crocs said it was ending business relationships with some of its long-time wholesalers to prioritize key partners that can elevate the brand’s position in the marketplace. This came shortly after Nike made similar moves to terminate wholesale accounts with Zappos, Dillard’s, DSW, Urban Outfitters, Shoe Show and more retailers.
In line with this DTC push, Crocs will eventually use the app to exclusively drop products, such as high-heat footwear collaborations.
So why did Crocs wait until now to launch an app? According to Michaels, the brand’s digital evolution only just reached a point where a mobile app could succeed in the most meaningful way.
“It’s a very competitive landscape,” Michaels said. “We really thought that for an app to be successful and to really stand out, it had to be more than just transactional. We had to find ways to make it something people want to engage with.”
