Going Direct…Globally

Jay Custard, Global Online Marketing Director

Regarding Forward Looking Statements:

This presentation may contain forward-looking statements,

estimates or projections that are based on our current
expectations. Any such statements, estimates or projections
are subject to risks and uncertainties that could cause the
actual results and outcomes to vary materially from these
statements, estimates and projections. These risks and
uncertainties are discussed in our filing with the Securities
and Exchange Commission (SEC) including, without limitation,
the Crocs, Inc. Annual Report on From 10-K for the year ended
December 31, 2009 and subsequent filings with the SEC prior
to the date hereof. Crocs, Inc. undertakes no obligation to
update its forward-looking statements upon the receipt of new
information, future events or otherwise.
History
The Crocs Story

 Started as a "one shoe" company

 First meaningful sales in 2002

 Public offering February 8, 2006

 Quickly established a well-recognized global

brand
The Crocs Story
The Crocs Story
The Crocs Story
The Crocs Story | What Happened?

 A "Perfect Storm" - Crocs experiencing dramatic growth

as recession hits

 Growth outpaced supporting infrastructure, stressing

service levels

 Sudden economic downturn triggers decline in demand

and increase in inventories

 Downturn in business triggers need for cost and

inventory realignment

 Increasing number of imitators impacts sales in some

markets

 Brand dismissed by some as a fad

The Crocs Story | What Happened?

 A "Perfect Storm" - Crocs experiencing dramatic growth

as recession hits

 Growth outpaced supporting infrastructure, stressing

service levels

 Sudden economic downturn triggers decline in demand

and increase in inventories

 Downturn in business triggers need for cost and

inventory realignment

 Increasing number of imitators impacts sales in some

markets

 Brand dismissed by some as a fad

The Crocs Story | THE AFTERMATH

 Large, loyal and passionate consumer base

 Iconic brand status and high brand recognition

 Worldwide distribution - 128 countries

 Industry leader in injection-molded footwear design and

production – Croslite

 Love 'em or hate 'em, they are in the conversation!

 Lack of Demand

 Lack of access to the consumer through shrinking wholesale

business
The Crocs Story | MAIN CHALLENGES
The Way Forward
The Crocs Story | THE WAY FORWARD

 Get Access to the Consumer

 Display the full breadth and depth of the product

 Take it to the World

Re-enter the Conversation
Change the conversation…Make some Noise

One shoe phenomenon Enduring footwear brand

Reinvigorate core business

Re-introduce innovative view on footwear

Rejuvenate expressive brand personality

Leverage our unique technology story

Past Advertising Efforts

Heavy on sponsorships

Event focus

Predictable

Indicative of “Supply-side” mentality

Conversation happened with us on the sidelines looking in

Video
Marketing Overview
Be More Direct…
Why Go Direct?

• Control our own destiny

• Guaranteed access to the consumer

• Display the full range of the product

• Huge opportunity across the globe

• Quick to market

• Close to the consumer

• Endless aisle
• Standardize systems

• Ecommerce Platform
• Analytics
• Reporting
Standardize Operations and Marketing

• Built an internal digital ‘agency’

• Extremely efficient structure
• Regions become sales and marketing hubs
• Leverage strategic vendor partnerships

Linkshare
• Our customers don’t think of their lives in terms of ‘channels’,
neither should we.

• Blur the line between online and offline…the customer doesn’t

care how you do it, but they expect it.
Traditional Channel Structure

Online

Wholesale
Retail
Go Forward Strategy

Online

Retail Wholesale
Go Forward
Strategy…Battles are won
where there are points of
intersection.
Online

Retail Wholesale
Buy Online,
Pick up in
store
Online

Retail Wholesale
Buy Online, Drop ship
Pick up in programs
store
Online

Retail Wholesale
Buy Online, Drop ship
Pick up in programs
store
Online

Retail Wholesale

Pay on Scan
Sell thru Data
The New Customer Paradigm

 Customers are empowered as never before

 They enjoy the lowest switching costs in the history of

commerce

 They have more options than ever before

Switching Gears
What we learned along the way
1. Listen to the consumer

• Analytics provides:
• What
• Where
• When
• How

• But what about the Why?

– Surveys
– Testing
– Experimentation
2. Performance Based Marketing

• Are you leaving money on the table?

• Understand your margins, determine your ROI/CPA and spend

to your target.

• Best pay-for-performance online tactics:

– PPC
– Affiliates
– Pay-for-performance ad networks
3. Have a defined role for your website

• Is it a flagship store?

• Is it a place to locate hard to find colors & sizes?

• Is it a discount channel?

• Is it MSRP only?
4. Build a robust customer database, capture at all
touch points

• Events
• Newsletters
• Contests
• Promotions
• Point of Sale
5. Product is king. Treat your web store like a brick
and mortar.

• Buy & forecast sales.

• Utilize one of your retail buyers or hire your own.

• Determine how you will dispose of excess inventory.

• Inventory Turns, Out of Stock metrics.

6. Find ways to partner with your wholesalers and/or
vendors.

• Share sell-through data

• Analytical data by geography, etc.

• Email templates/graphics/product imagery

• Drop ship program

7. Consider outsourcing aspects of your ecommerce
business.

• Fulfillment

• Customer Service

• Returns
8. Establish a pricing and promotions committee.

• Representatives from all channels.

• Clear/defined process & escalation paths.

• Rules of engagement.
9. Social Media isn’t a place for corporate PR.

• Be an active part of the conversation

• Don’t act like a corporation…be authentic to the tool

• Social is messy, and people are okay with it.

10. Mobile is the next great opportunity…that no one
has figured out.

• Don’t wait on the sidelines

• Look for opportunities now and test, test, test

• Start small with a simple SMS program to understand your

market
CHANNEL2010—Use it!

jcustard@crocs.com
@jay_custard