In its second-largest acquisition, Amazon buys the company for $970 million.
The U.S. shoe brand sets it sights on the Baltic and Russia.
Crocs plans to expand its e-commerce operations from its current 12 sites in Southern and Northern Europe and launch new sites in Eastern and Central Europe, according to Adrian Pritchard, Crocs European e-commerce director.
“The Baltic countries (Estonia, Latvia, Lithuania), are first up in 2012, and Russia is on the roadmap for 2013,” Pritchard told a global e-commerce summit in Barcelona last week.
“In Europe, we have a lot of catching up to do,” Pritchard said. “So there will be a lot of investment and we have a lot of awareness and building up to do with plans to open more stores online and offline.”
The 10-year-old U.S. shoe manufacturer launched its European operations in 2007, and operates its Europe-wide business from its Amsterdam head office.
Europe already accounts for 12 out of Crocs’ 20 global web sites Pritchard says—Germany is the largest European e-commerce market for Crocs, followed by France, the United Kingdom and the Netherlands. The brand’s Polish site went live in March.
Pritchard says Crocs works with a marketing agency that has knowledge in the local markets; the brand also employs regional e-commerce directors. Local-language customer service teams deal with social media, Pritchard says.
However, most of the functionality and testing of Crocs’ European e-commerce sites is controlled from the United States, Pritchard says.
“We use the same creative assets in Europe, but localize product descriptions,” Pritchard says.
One challenge, he says, is balancing Crocs’ e-commerce operations with its business of selling its shoes wholesale to retailers.
“E-commerce is still the youngest in all our channels, so wholesale retail sometimes think we are taking away their business,” Pritchard says. “Zalando, eBay—we are all competing for the same business, and the same goes for pricing. Sometimes I see our products for 10 euros (US$12) cheaper on these other web sites—if that happens we match the price.”
Pritchard says he has learned many lessons from managing multiple e-commerce sites across European borders. “A lot of it relies on understanding the difference in consumer behavior,” he says. “German customers like to order multiple pairs, so there is an 18% return rate, compared to 7% in France where they use the size guide more.”
Crocs has two European warehouses, in the Netherlands and Finland.
“We apply different shipping rates according to the country—a really important factor in the market is delivery costs and deciding when to offer free shipping,” he says. He adds that free shipping works—when he offered it two weeks ago, the conversion rate jumped from 5% to 8%-9%.
France has a higher conversion rate than many Europe sites, averaging 7-8%, because Crocs shoes are not as readily available there. But in Germany and the United Kingdom, where there are more stores selling Crocs, the conversion rate is 4%, he said.