Lolly Wolly Doodle Shows How to Profit From Social: Tech
Brandi Temple, a 39-year-old mother of four, transformed a living-room hobby into a retailer that ships 30,000 kids’ garments a month using online social tools that giant competitors haven’t mastered.
Lolly Wolly Doodle Inc., the retailer founded by Temple in 2010, makes most of its sales through Facebook Inc., using the social network to set prices, take orders, forecast production and even market and design clothes.
“I just snapped a picture and put it on Facebook,” said Temple, chief executive officer of Lolly Wolly Doodle, which is based in Lexington, North Carolina. “I said, ‘I have these 25 dresses, here’s how much I want for them.’ Within 30 seconds, they sold out.”
Clothes retailers, from Gap Inc. to Saks Inc. (SKS) and Macy’s Inc. (M), have been seeking ways to profit through sites such as Facebook (FB) and Pinterest Inc., which offer access to more than a billion consumers. While many big companies have brand pages and let users “like” items, few sell directly through social networks. That threatens to keep the clothing industry from profiting from the annual $30 billion of goods that Booz & Co. predicts will be sold through social media by 2015.
“Large retailers still have a long way to go in making the most out of social commerce and social networks,” Clark Fredricksen, vice president at researcher EMarketer Inc., said in an interview.
Lolly Wolly Doodle is pioneering the use of social media, generating 80 percent of sales through Facebook. To place an order, users “like” the retailer’s page and comment on an item, expressing an intent to buy. The company then e-mails an invoice and ships the product. Two weeks of sales via Facebook brought in as much revenue as two months on EBay Inc. (EBAY)’s site, Temple said.
“On EBay, sometimes you’ll get feedback and questions, but you don’t have that immediate reaction that says, ‘Maybe you can make this in zebra,’” Temple said in an interview. “You’re able to see what sells, why it sells, hear directly from them and engage with them. We don’t plan two seasons ahead.”
Temple’s company isn’t alone -- Combatant Gentlemen LLC and Southern Tots have also won sales by engaging customers through the direct link afforded by social media. These startups can interact personally with buyers, who can order directly from the seller through e-mails, social-network postings and messages.
For bigger retailers, social networks have remained a place where products are discussed -- often more than on merchants’ own sites -- yet aren’t directly for sale. While Macy’s, Saks and Gap have popular Facebook pages, they mostly use photos of products and coupons to entice users to visit their websites to browse and buy. There’s little personal interaction, which would be difficult to manage because of their larger scale.
“We do not view social as a platform for hard selling but more of a means to provide engaging content to those customers that want to enhance their shopping experience with us,” Kinjil Parikh, Saks’s vice president of digital marketing, said in an e-mailed statement.
Saks provides Web links to individual product pages, offers coupons and lists phone numbers users can call to buy a shoe or ring. Gap’s Facebook page connects to product pages for new styles and merchandise. While company postings can garner thousands of likes, and retailers such as Macy’s and Gap do sometimes converse with customers through Facebook comments, turning that interaction into a sale ultimately depends on the user clicking through to the company’s website or visiting a store.
Facebook has been “working very hard to show that people who like Gap’s page are people who like to buy something from Gap, which is something that hasn’t always been clear,” EMarketer’s Fredricksen said. “At the same time, there are many examples of large retailers that are using social to develop loyalty to improve engagement with the customer, all of which ultimately benefits them.”
Macy’s is trying to key in on conversations consumers want to have with friends while shopping, and to capitalize on increased browsing time that computers and mobile phones have created, said Jennifer Kasper, vice president of digital media and multicultural marketing at Macy’s. The point is to make the store’s content more findable and relevant, she said in an e-mail.
On Pinterest -- an online photo-sharing site that’s estimated to have more than 40 million users -- only 11 percent of items mention brand names, according to Curalate, which helps 325 brands track trending merchandise. And about half of brands’ top 10 most-discussed products on San Francisco-based Pinterest’s site are out of stock or no longer sold by the retailer.
“The consumer is let down when they get to a company’s site,” Curalate CEO Apu Gupta said in an interview. “If brands know someone is looking at a blue sweater, they may be able to suggest one that’s in stock when someone actually gets to the site.”
For example, a pair of pink flats sold by Hennes & Mauritz AB (HMB), or H&M, was briefly one of the company’s most-shared items on Pinterest. The photo that more than 50,000 consumers were sharing featured the shoes from the top down, while H&M’s website pictured the footwear in a different color -- yellow -- and from the side, Gupta said.
That’s the moment a store should aim to clinch more sales by featuring the shoes prominently on its home page, changing the camera angle or sending out an e-mail to customers that shows the product, he said. By comparison, the photo of the yellow version of the shoe was shared 3,000 times.
Andrea Hicklin, a spokeswoman for Gap, declined to comment. H&M representatives didn’t respond to a request for comment.
Other firms that help retailers harness social media include BloomReach Inc. and Pinfluencer Inc.
Combatant Gentlemen, a direct-to-consumer clothing seller that caters to young professional men, was started by a team of cousins -- Vishaal and Mohit Melwani -- who design patterns, cut samples and handle fulfillment with one other employee in a Los Angeles warehouse.
Ideas for new merchandise -- shirts with French cuffs, slim-fit suits and a casual-Friday section -- have come primarily from Facebookers. The feedback has prompted the company to create an area on its website where users can say whether they love or hate prospective designs, and suggest changes.
Using Facebook as a primary sales and marketing channel has kept costs low, Mohit Melwani said. Combat Gent projects about $3 million in revenue this year, compared with $570,000 at an 86 percent gross margin in 2012. The social networks themselves don’t receive any commission, since their sites are only the medium the retailers use -- the transactions aren’t processed through the sites.
The success that Combat Gent and Lolly Wolly Doodle have found on Facebook has been on a relatively modest scale. Lolly Wolly Doodle’s sales have been small enough to manage through the comment section on posts, and supply is limited, prompting users to act fast to snap up available inventory. Combat Gent directs users to its website to complete each transaction, while Lolly Wolly Doodle invites users to post their e-mail addresses on Facebook, a tactic that could invite inappropriate use of the information.
Daily Grommet, an online retailer that features hand-picked manufacturers with compelling back stories, focuses more on Pinterest. In November, the company invited users to pin products they’d like to buy on Daily Grommet. The retailer ended up adding items to its inventory, said Tori Tait, senior community manager at the retailer. That included a to-go lid for mason jars, called Cuppow, which was the fifth-best-selling product on the site last year and the most-pinned as of Jan. 30.
The promotion was part of an experiment created by Daily Grommet and Curalate to increase the amount of images shared on Pinterest from the retailer’s site by 10 percent over two weeks. The end result was an increase in pinning of more than 600 percent, and the level of activity didn’t slump when the trial ended, Tait said. Daily Grommet also increased its Pinterest follower base by 14 percent, more than its goal of 5 percent, she said.
“People were digging into the catalog -- a product on page four was one of the most-pinned products,” said Tait, adding that about 80 percent of users coming from Pinterest have never shopped on Daily Grommet before. “We think the traffic and revenue this year coming from Pinterest will exceed that coming from Facebook.”
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