Lolly Wolly Doodle

Lolly Wolly Doodle
Private
Industry Children's and women's clothing
Founded Lexington, North Carolina, US, (2008)
Founder Brandi Tysinger-Temple
Headquarters Lexington, North Carolina, US
Number of locations
 4[1]
Area served
 US
Key people
Revenue $11 million
Number of employees
 250[1]
Website lollywollydoodle.com

Lolly Wolly Doodle is an American company that manufactures women's and children's clothing for sale online. It was founded in 2008 by Brandi Temple in her hometown of Lexington, North Carolina, where it is headquartered. After investments by venture capitalists such as Revolution Growth, it has expanded to include production facilities in New York City; some business is outsourced to China and Latin America.

While it is not its only channel, Lolly Wolly Doodle sells most of its products through its Facebook page. Temple claims the company is the largest business on that site.[2] It is considered to have succeeded in using Facebook as a sales platform where many larger, established retailers had failed.

The company takes a fast fashion approach to product development and production. Since it offers custom services like monogramming, it uses just-in-time production; its workers have been compared to short-order cooks. The network effects of distributing through a prominent social media site eliminate the need to spend money on marketing or advertising.

History

2003–06: Brandi Temple

Although throughout her childhood she had often made things such as friendship bracelets and tried to sell them to others, Temple describes herself as an "accidental entrepreneur". A native of Lexington, North Carolina, centrally located in that state's Piedmont Triad region, she reached adulthood with no ambition greater than to become a trophy wife. "I wanted to support a great husband and look cute," she recalled in 2014.[1]

After a failed first marriage that produced one son, she moved to Central Florida. She met Fran Papasedero, coach of the Orlando Predators Arena Football League team, and began a relationship with him that produced a daughter. They were engaged at the time of his 2003 death in a car accident, after which she returned to Lexington.[1]

There she met and married Will Temple, who also had a son from a previous marriage. To their three children they added a daughter of their own. Brandi finally seemed to have realized her dream, staying at home with the children while her husband sold heavy equipment to local construction companies. She briefly ran a day spa in downtown Lexington.[1]

2006–08: eBay

During that time, frustrated with the styles of clothing on offer for young girls at retailers, and unwilling to pay higher prices for boutiques that sold what she was looking for, she began sewing clothes on her own for her daughters as her mother and grandmother had done for her. "I wanted something that was cute for church that didn't cost an arm and a leg, and I wanted to be able to monogram it," she explained later.[1] "I couldn't find anything in stores that matched and was tasteful and fun."[2]

Finding a large amount of fabric left over after one session, she decided to make more clothing in the same style and offer them for sale on eBay rather than let it go to waste. "I figured there had to be others just like me searching for the same, fun dresses," so she made some more and offered them for sale on eBay. Eventually that grew into a regular practice, and her family and friends began to help her in any way they could. "Within a matter of months, we had turned our bedroom and garage into a mini-factory," she writes on the company's website. She named it Lolly Wolly Doodle (LWD), a play on the children's song "Polly Wolly Doodle" that was her nickname for a niece of hers named Lolly.[2]

In 2008, as the eBay store was bringing regular extra income into the household, Will's business began to decline as the housing bubble collapsed, slowing new-home construction. Lolly Wolly Doodle was formally incorporated.[2] Temple realized she needed to scale it up.[1]

2008–10: Move to Facebook

Two years later[2] she sent some patterns to a Chinese company she had located through Alibaba.com to see if they could meet her standards of quality. The resulting dresses did not, and rather than sell them on eBay and risk negative customer feedback, she decided to post them on the company's Facebook page, which it rarely used (at the time the company had 153 friends on the site, mostly women Temple knew from Junior League). If they left a comment on the posting with their email address, she wrote, she would send a PayPal invoice and they could have the item at a discount.[1]

This impulsive move changed the company completely. "I just snapped a picture and put it on Facebook," she told Bloomberg News in 2013. "I said, 'I have these 25 dresses, here's how much I want for them.' Within 30 seconds, they sold out."[3] That was more business in one day than she had done on eBay in a month. As a result of this epiphany, she moved her online store from eBay to Facebook within weeks. Her family continued helping her meet demand, with her father cooking meals and Will learning to monogram[1] and sew buttonholes.[2]

2010–12: Expansion

As the company's fortunes grew, the economy did not. By the middle of 2010 Will let Brandi know he was about to be laid off. With the day spa her only real business experience, she did not think she could handle the continued growth of her own company, and decided to sell it for a million dollars, an amount she believed would be enough money to support the family through her husband's unemployment. Through connections, she was introduced to a banker in Charlotte, who in turn put her in touch with Shana Fisher, a New York venture capitalist who had started her own firm, High Line Venture Partners, that had been an early funder of successful startups like MakerBot, Vine and Pinterest.[1]

Fisher told Temple she had significantly undervalued LWD. ""Don't you dare sell [it]," the venture capitalist told Temple on the phone. "Let me invest, and let's grow this business. You don't realize what you've done." If the company were able to keep expanding its customer community, Fisher believed it could be worth as much as $100 million. She invested $100,000, and arranged a seed round of financing several months later that raised $1.4 million, enough for Fisher to move production from her house and garage to a 4,000-square-foot (370 m2) former tire warehouse in Lexington.[1]

Temple had the capital and the facilities to handle the company's growth, but she still needed extra help. One of her first hires was an elderly woman who knocked on the door of the tire warehouse shortly after LWD moved in. She and her husband could no longer afford the medication for his heart condition, and she had heard Temple needed workers. Although the woman had no relevant experience or skills, Temple hired her and personally trained her. At that time Lexington, which had seen many of its traditional jobs in the textile and furniture industries relocate to China, had an unemployment rate well over 10%, and news that LWD was hiring prompted many more people, in similarly dire economic straits, to seek jobs at the new factory.[1] Temple hired all of them, increasing her staff nearly tenfold over the next two years.[4]

New hiring was not limited to the company's shop floor. In the executive suite, Emily Hickey, formerly of HotJobs, became LWD's chief operating officer. She has subsequently brought even more veterans of e-commerce into the company.[1] Growth continued to the point that it was necessary to expand from the old tire warehouse to a 19,000-square-foot (1,800 m2) facility by September 2012 (the State of North Carolina shared the costs with the company). By that time, the company had achieved 300,000 Facebook fans.[2]

2013–present: Revolution investment

Business and tech media began to take notice of not only Lolly Wolly Doodle's success but how it had accomplished it, succeeding on Facebook when larger, older companies like JCPenney had quietly withdrawn highly touted but unprofitable sales operations from the site during the same time LWD had taken off. Kara Swisher wrote about Temple and LWD a few months after the move. "Essentially, Temple is doing a modified version of a flash sale, but with just-in-time retail elements," she observed.[5] At the beginning of 2013, Business Insider named Temple and Hicks to its list of "30 Startup People To Watch This Year." By the end of the year, the writers suggested, "we bet a lot more people will know about Temple and her company."[6]

In June, that prediction was borne out when Steve Case, founder of America Online (AOL), invested $20 million in LWD through his venture capital firm, Revolution LLC. He called the company "a classic viral brand that resonated with its audience." He and another former AOL executive, Donn Young, took positions on LWD's board of directors. As Fisher's investment had two years earlier, the money primarily enabled an expansion to yet another larger production facility later that summer, this time a 100,000-square-foot (9,300 m2) building that had been vacant for many years. The company also released a mobile app and began selling its clothing through Instagram and Pinterest as well.[7]

For that year the company's revenues were $11 million. By the time Inc. ran a cover story on Temple and Lolly Wolly Doodle in mid-2014, the company had grown to four facilities, including one in New York City that handles the company's technology, and 250 employees. It had 900,000 Facebook fans. The company's main project for the year is the coding and implementation of customized software to improve the structure of design and sales data and better integrate the supply chain, production and warehouse operations.[1]

Business model

While it sells product through several online channels, including its own website and other social networks, LWD by some estimates does 80% of its business through its Facebook page.[3] Temple claims her company does more business on the site than any other, and no independent analysis has suggested otherwise. Its 900,000 fans are not the most of any retailer—Zappos counts 1.5 million—but are disproportionately large compared to its overall size. Since larger, established retailers have mostly been unable to generate significant sales from their Facebook presence, e-commerce analysts have studied Lolly Wolly Doodle's business model in detail to understand how it has come to work.[3][5][8]

Sales on Facebook are still handled the way Temple first did. Around 15 times a day, the company posts pictures of a limited run of product, usually a new design, on its wall. The images then show up in customers' news feeds, and if they are interested in buying, they post a comment with the desired size, any customizable aspect LWD offers (usually a monogram of the intended wearer's name), an email address to which a PayPal invoice is sent.[1][8] The customer then has 72 hours to pay.[7] In the meantime the comments and the photo of the clothing appear on the news feeds of customers' Facebook friends, serving as free advertising for LWD.[1]

This is in contrast to the approach taken by retailers such as JCPenney when they opened Facebook stores in 2010. The site provided an extra tab for users to click if they wanted to buy something. Sucharita Mulpuru, an analyst at Forrester Research likened this to "trying to sell stuff to people while they're hanging out with their friends at the bar." However, Inc. later noted, Penney, which quietly closed its Facebook store within a year and returned to simply using its page for marketing purposes, was in fact "[not] asking people to shop at the bar; it was asking people to leave the bar and go to another tab, whereas Temple was essentially setting up trunk shows in the bar."[1]

Once the order is processed, the garment is actually manufactured. The company uses the just-in-time production method:

If traditional garment manufacturing is a pretty straightforward assembly-line affair, the seamstresses at Lolly work more like short-order cooks in a diner where the menu changes daily. In one room, a dozen people cut fabric according to order tickets that flow through in real time—15 size-2 aqua chevron Charlotte dresses here, a single size-6 salmon Ruffle dress there. On the sewing floor, efficiency comes from how the orders are bundled (not necessarily by garment or size but, because many items share attributes, by the type of sewing required) and minimizing how many people or machines have to touch a garment.[1]

Donn Davis, a former America Online executive now on LWD's board, says that Temple has "reinvent[ed] apparel much as Dell reinvented the PC industry. It's affordable custom [manufacturing] in real time with little inventory risk."[1]

The real advantage to LWD from Facebook, analysts believe, is not in order processing or production, although those do benefit from the use of the site. Instead it is the effects of the social feedback loop it creates on the company's marketing and inventory management,[3] a practice that dates to the company's origins as Temple's hobby. When she first started selling on Facebook, she focused less on growing sales and more on building relationships with her customers that included listening to them closely about what they wanted. This, Inc. says, "eliminated much of the guesswork of merchandising." According to Temple, "[w]hen something went crazy, I would go really deep into that style and those colors," she says. "And if it didn't [sell], then forget it. I didn't make it again. We would fill whatever orders we got and move on to something else." This practice continues today.[1]

This almost-instant feedback eliminates the need for the company to spend money on market research. "You're able to see what sells, why it sells, hear directly from [customers] and engage with them," Temple told Bloomberg News in 2013.[3] New designs that sell quickly are moved into larger-scale production and displayed on the company's website,[8] with pre-customized versions of proven long-term successes outsourced to plants in China and Latin America. This, the company's only overseas production, accounts for 30% of its output. It is unlikely to increase as the company's success has resulted from being close to its primary market. "It's no coincidence that Lolly Wolly Doodle is made in the U.S.", observes Mulpuru.[1]

As a result of this feedback loop and short supply chain, LWD does not have the overstock problems that beset larger, traditional clothing retailers, with accumulations of unsold product on shelves and in warehouses. While warning that LWD's system isn't perfect—"[t]here are all kinds of early demand indicators that could be wrong"—Mulpuru sees lots of upside. "[Y]our chances of picking a hit are going to be better, and you will have fewer markdowns."[1]

The experience also informs future design choices, making the company smarter.[1] "We don't plan two seasons ahead," Temple says.[3] It also limits the possible variations it might make on an item—a "pod", in company parlance—to keep manufacturing complexity down. Hicks, Temple's chief operating officer, says this puts the company alongside European fast fashion successes like H&M and Zara.[1]

Davis believes LWD's business model can be applied to many other products besides children's clothing. "[T]he first step is to become the leading company there," he told Inc. "And the second step is ... to add new brands on top of it that go into other segments" such as clothing for adults, which the company is beginning to do, and home goods. Other companies have begun to imitate it,[1] such as Combatant Gentleman, whose business clothing for young men has found a Facebook following.[3] A San Francisco startup called Soldsie, whose founder was inspired by Temple and Lolly Wolly Doodle, does over a million dollars worth of transactions each month for similarly small businesses online.[1]

Outside observers have high praise for what Temple and LWD have done. ""I have an e-commerce crush on Lolly Wolly Doodle,", Will Young, the director of Zappos Labs, told Inc. "[They have] been able to do something that no big brand has been able to do, which is to convince people to actually buy on Facebook." Mulpuru suggests other companies should "[get] their heads out of their asses" and at the very least emulate the way the company has tapped the ability of social media to help it understand its audience and make products less likely to fail in the marketplace.[1]

There have been some reservations expressed, however. Bloomberg notes that it works because "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." She suggests that it has worked due to LWD's "relatively modest" scale. The company's requirement that customers post their email addresses in comments to order "could invite inappropriate use of the information."[3]

Brands

The company uses the Lolly Wolly Doodle name for most of its lines. For girls, it makes primarily dresses and capri sets, with a few swimwear pieces.[9] Boys' clothing from LWD is primarily shortalls, T-shirt sets and bathing trunks.[10] An extensive babywear line[11] is complemented with tops, skirts and dresses (primarily maxi length) for adult women.[12]

The only other label LWD puts out is Designed by Me, for customized clothing. Users of the website choose details of a girls' dress; it is then made and shipped to them within three weeks. A Facebook login is required.[13]

Philanthropy

As Lolly Wolly Doodle has grown, the company has begun some charitable work. It has two programs, both of which are administered in-house. One has a local focus, the other is international.[14]

The first, Moms in a Jam, provides checks for members of the company's employee and customer families who need some extra financial help during the winter holidays. The money is intended to be spent on things like holiday meals, clothing, and gifts. Recipients are nominated and chosen by the LWD Facebook community.[14]

LWD also donates to help communities in Africa secure clean drinking water. In 2012 a village in Burkina Faso was able to drill a well with support from the company. Money is also spent on clothing and other supplies needed by the villagers.[14]

See also

References

  1. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Foster, Tom (June 2014). "The Startup That Conquered Facebook Sales". Inc. Retrieved June 11, 2014.
  2. 1 2 3 4 5 6 7 Tysinger-Temple, Brandi (2014). "What a Journey". Lolly Wolly Doodle. Retrieved June 11, 2014.
  3. 1 2 3 4 5 6 7 8 Kucera, Danielle (March 5, 2013). "Lolly Wolly Doodle Shows How to Profit From Social: Tech". Bloomberg News. Retrieved June 13, 2014.
  4. ↑ Cansler McGee, Rebecca (August 30, 2012). "Lolly Wolly Doodle celebrates exponential growth". The Dispatch. Lexington, NC: Halifax Media Group. Retrieved June 13, 2014.
  5. 1 2 Swisher, Kara (October 30, 2012). "Lolly Wolly Doodle's Brandi Temple Talks Facebook-Fueled, Real-Time Retail". All Things Digital. Retrieved June 13, 2014.
  6. ↑ Shontell, Alyson; Dickey, Megan Rose (January 17, 2013). "30 Startup People To Watch This Year". Business Insider. Retrieved June 13, 2014.
  7. 1 2 Eha, Brian Patrick (June 19, 2013). "Why Steve Case Is Betting Millions on Lolly Wolly Doodle". Entrepreneur. Retrieved June 13, 2014.
  8. 1 2 3 Foster, Tom (June 2014). "How a Small-Town Manufacturer Predicts Hits With Facebook". Inc. Retrieved June 16, 2014.
  9. ↑ "Girls Dresses & Clothing". Lolly Wolly Doodle. 2014. Retrieved June 19, 2014.
  10. ↑ "Girls Dresses & Clothing". Lolly Wolly Doodle. 2014. Retrieved June 19, 2014.
  11. ↑ "Girls Dresses & Clothing". Lolly Wolly Doodle. 2014. Retrieved June 19, 2014.
  12. ↑ "Girls Dresses & Clothing". Lolly Wolly Doodle. 2014. Retrieved June 19, 2014.
  13. ↑ "Designed by Me". Lolly Wolly Doodle. 2014. Retrieved June 19, 2014.
  14. 1 2 3 "Why We Do It". Lolly Wolly Doodle. 2014. Retrieved June 20, 2014.
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