Business model
Despite selling through various online platforms, including its own website and other social networks, it is estimated that Lolly Wolly Doodle conducts about 80 percent of its business via its Facebook page.[3] 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 to understand its success.[3][4][9]
Once an order is processed, the garment is manufactured using 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 Lolly Wolly Doodle'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]
Analysts suggest that Lolly Wolly Doodle primarily benefits from the social feedback loop on Facebook, which significantly informs its marketing and inventory management strategies.[3] The feedback from customers eliminates the need for traditional market research and informs the design choices, helping to identify successful designs and discard less popular ones. Popular designs move into larger-scale production, with some outsourced overseas. This approach minimizes overstock issues often faced by traditional retailers.
However, some observers[3] note potential limitations. The model largely works due to Lolly Wolly Doodle's manageable scale, and the requirement for customers to post their email addresses in comments for orders could potentially invite inappropriate use of information. Despite these reservations, some other companies have adopted similar business models, demonstrating the potential broader application of this strategy.
