👋 Welcome back to Growthnotes!

Welcome to the DTC Report, where we analyze some of the best high-growth brands out there & tell you how they grew.

This week, we’re analyzing Crocs, one of the top DTC brands in the world. To give some perspective, Crocs has sold 103 million pairs of footwear in 2021.

💫 Mentions

• The Bainbridge DTC Index is a great way to get a pulse on the DTC industry as a whole.

• Distasteful use of SMS marketing by Fashion Nova?

• Twitter might become a viable advertising channel (that was quick, Elon)

🤔 Interesting News

• Etsy marketplace sellers going on strike.

• TikTok partners with GIFY for the future of content? (vertical videos + GIFs = 🤔)

• Lululemon passes Under Armour in revenues

👀 This week you’ll find

• An analysis of some top-performing ads by some leading DTC brands

• A brand study of Crocs, a DTC behemoth 🐊

🔍 Ad 1 - Why it’s great

✅ It starts with a bold statement.
75% of Americans are dehydrated.

✅ It positions Hydrant as a solution to problems that we can all relate to:

• Midday Burnout

• Brain Fog

• Fatigue

• ✅ They compare their product to a competitor that we all know. 🐊🩹

🔍 Ad 2 - Why it’s great

✅ The ad starts with an “I LOVE THIS!
I would give this a 6 trillion out of 10.” This is an authentic scroll stopper that works wonders.

✅ UGC at its finest
It’s a perfect execution of a UGC-type testimonial with a decent level of video production. It feels like a homegrown testimonial with good lighting and consistency.

✅ They alternate between two different customers,
hammering home all of the USPs from two stand points. You have everything you expect from SKIMS:

• Fabric is amazing

• Feels like a second skin

• They are stretchy and form with your natural body shape

• Beautiful detailing

🐊 Crocs, the self-aware behemoth

Crocs, really? You may ask with a raised brow. Yes. Crocs.

Before we dive in, let’s take a second to appreciate this DTC empire:

• Crocs made 2.3 billion dollars in revenues in the last twelve months (that’s 8x Allbird’s, 4x Casper’s, or 5x Figs’, however, you want to look at it).

• 58% of that revenue comes from DTC.

• They have an EBITDA margin of 31%, which is higher than Lululemon’s 28%.

Crocs own the category. They are the keyword for an identity-defining space. Their true fans, just like their haters, have strong opinions about the iconic shoe (shoe?) and they make sure those opinions are voiced.

💞 Love your haters

"Our goal is not to make the haters love the brand," says Andrew Rees, Crocs’ CEO. "It's to exploit that extrinsic tension because it creates opportunity, it creates PR, it creates media, it creates interest. It creates a whole lot that would cost you a fortune to buy in other ways."

The polarization creates a “cool kid” aura for the people that rock their Crocs.

👁 The art of the stunt

Cognitive dissonance is the edge. Crocs understands how to drive eyeballs to their collaborations. The bigger the dissociation between two product lines (KFC + Crocs?), the more coverage you will get. Crocs has captured pop culture through this playbook. Here are a few examples:

1. KFC partnership

The playbook is easy. (1) Launch a brand partnership with another brand from the left field. (2) Make a media splash. (3) Sell out. (4) Make a second media splash. (5) Have us talking about it two years late, giving them some additional awareness.

2. Balenciaga ($625 Crocs)

Another way for their true fans like Justin Bieber to flash his love for Crocs, creating that Aura of “I’m over that.”

As an indicator, the keyword “Balenciaga Crocs” has 97,000 monthly searches on a global scale:

Here’s a few more iconic collaborations:
Pizzaslime, Chinatown Market, Takashi Murakami, Salehe Bembury

👉 Master the drop

Crocs took a page out of Supreme’s book and embraced a drop model. They are currently running 60+ limited-edition collaborations with different brands, artists, and personalities. More than 80% of these collections are sold out. Disney’s Hocus Pocus, Hidden Valley’s ranch sauce (that’s right), and KISS all have a Crocs collaboration to their name. This is the definition of an identity-driven purchase.

🤔 Jibbitz?

Category expansion is a key component of a winning DTC brand. So how does Crocs increase their LTV? There's a thing called Jibbitz AKA Crocs charms.

If you’re unaware, Jibbitz are the ornaments that go onto your Crocs if you’re in the know. It’s the social currency that gets people talking.

These Crocs ornament represent 7% of Crocs total sales ($161,000,000), up from $60,000,000 last year. To put that into perspective, that’s about 60% of Allbirds revenues.

And customizing your Crocs is a trend that keeps on giving.

🤓 Pro-tips by inBeat Agency

• Leverage micro-influencers to create winning ads.
  Make these creators fall in love with your product (talk with them, send them new products before they are released to the public, brainstorm new ideas with them, etc.)

• Onboard your A-listers (low CPAs, easy communication, and low amount of edits) as long-term partners, and make whitelisting/spark ads an ongoing part of your deal.

• Scale your ads by scaling your creators. For instance, if you want to target an older demographic, work with older micro-influencers to create content.

• Ask your top creators if they have any creator friends they would recommend.

• Always ask your creators for ideas and advice. They understand social media at a deeper level, and you should make that an advantage.

• Don’t be fancy, straight to the point works well.

If you want to work with inBeat to scale your ads, feel free to book a free consultation. We help brands manage over $1,000,000 per month in paid advertising and UGC is at the center of our growth playbook.