When you hear of major investments, say $20 million ones, that huge internet leaders, for example AOL founder Steve Case, make, you definitely wouldn’t think it was for a small North Carolina children’s clothing company. Especially one you’ve probably never even heard of, like Lolly Wolly Doodle.
But surprisingly, that is the exactly what Case’s investment company did and are making huge profits from social commerce and … Facebook.
“Our strategy is really to invest in companies most people haven’t heard of yet and make them into household brands,” Case told Venture Beat. “We like finding things off the beaten path – that’s what we did with AOL — and we think the category they’re targeting is a $50 billion business that hasn’t really changed much in centuries.”
A recent report by Monetate found social commerce doesn’t result in profits, so what is Lolly Wolly Doodle doing differently to gain such big investors?
For starters, they use Facebook as their main marketing tool. Brandi Temple founded the kid’s clothing company when her husband was laid off and only had word of mouth and Facebook friends to gain popularity. Now, the business has 584,000 Facebook fans and still uses the social networking site almost exclusively.
“Most of what happens in social commerce is that the larger companies are looking at social opportunities through the prism of the past,” Case explained. “They have the view that it’s ancillary, a curiosity, an extra.”
Another success factor is Lolly Wolly Doodle’s local process. After drawing up the designs, sharing them on Facebook and getting orders, the company custom makes them in North Carolina and sends them to customers. The whole process takes a little more than a week and they typically post more than 10 designs a day.
“It’s the audience of moms and girls, they feel part of the community,” Case said. “It’s like a personal seamstress in North Carolina building clothes to spec.”
The social aspect is a huge key to Temple’s success. Customers can add on to each design prior to purchase and build accessories too, making them part of the process and better connected to the company.
“Ninety percent of our employees in Lexington,” Case said. “It’s the core of the company. We’ll continue to expand there and will grow to other cities as well. It’s a ‘Made in America’ manufacturing play.”
Lolly Wolly Doodle is a true social company — born on the internet and gaining popularity and success through word-of-mouth, without any costs related to marketing or inventory.
“Traditional retailers generally do social commerce in an accidental or a fringe way,” Case said. “But their core business really is manufacturing offshore and selling in malls.”