Brandi Temple, 39, a 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, the retailer Temple founded in 2010, makes most of its sales through Facebook, 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, CEO of Lolly Wolly Doodle, based in Lexington, a city about 100 miles west of Raleigh. “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 to Saks and Macy’s, have been seeking ways to profit through sites such as Facebook and Pinterest, 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.
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“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, 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 emails an invoice and ships the product. Two weeks of sales via Facebook brought in as much revenue as two months on eBay’s site, Temple said.
The company now has 375,000 Facebook fans and works out of a 19,000-square-foot facility and employs more than 100 people in Lexington.
“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 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 emails, 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.
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 media 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 emailed statement.
Cousins sell clothes
Combatant Gentlemen, a direct-to-consumer clothing seller that caters to young professional men, was started by 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.