This fashion social media case study shows how the disruption of the product based economy is at hand and how CMOs can move to use it to their advantage. This is another wake-up call for brands, most of which are based on mass production (e.g. scale and “efficiency”) principles. As this case suggests, mass customization is changing customers’ definitions of “products,” so they will increasingly reject mass-produced products and services. To put it mildly, this will challenge marketing, merchandising, and distribution profoundly, and brands that don’t react in time will disappear. On the other hand, those that tap into customer experience and personalization will thrive.
Have you heard of Lolly Wolly Doodle? It’s the first company to enjoy a smashing success selling millions on Facebook.
Lolly Wolly Doodle (LWD) is a classic example of the disruptive innovation story I described in The CMO’s Guide to the Disruption of Products and Brands in 2012, here in MENGonline. LWD posts models of kids’ clothes on its Facebook page, offers them for sale, and makes them to order after customers pay. Today, customers receive their clothes within two weeks, but the company is working to cut that in half. Here’s the kicker: clothes are made to order and priced below most mass-produced clothes in LWD’s category.
As described in The Startup That Conquered Facebook Sales, LWD’s operation is simple:
- Analyze product sales trends and social data, make a design, photograph it, and offer it for sale via a Facebook page post.
- To buy it, customers merely comment, say they want one, specify sizes and other customizations, and leave their email addresses (see image, right).
- The company sends an e-invoice, and customers pay, which enters orders into the production stream.
- The garment is made and shipped.
- This is happening on the Facebook Page Wall, not in any custom app, so all interactions between LWD, customers, and their friends spread to customers’ news feeds. Obviously, Facebook’s algorithms weight these interactions more highly when friends interact with friends and themselves become customers.
- The more interaction on the Wall, the more news feeds. Keep in mind, this is not “marketing,” it’s customers talking about the cute designs and ordering clothes.
- So-called F-commerce (subsequently called the effed commerce ;^) failed because it tried to make Facebook fans go somewhere else to buy. LWD’s approach works because it doesn’t interrupt customers’ Facebook habits; they just comment on the Wall by entering their email and order info.
- Since there’s no inventory, there are no markdowns or promotions to “move it.”
- Customers discuss designs among themselves and LWD, giving great ideas for new products.
- LWD analyzes sales data and is investing in predictive analytics to anticipate hits (like every other human endeavor, most designs sell in small quantities and are discontinued). LWD has created the concept of a “product pod,” a design template that enables rapid manufacturing and customization. The company introduces 15 SKUs per day.
- Local manufacturing in Charlotte, North Carolina is organized to minimize the people required to touch a garment, not size or other common specifications.
- LWD is a step beyond “fast fashion” like Zara, which still makes to inventory (albeit faster, smaller).
- Mass customization is not an all-or-nothing proposition; LWD is venturing into “premade blanks” of popular items. Roughly 30% of blanks are outsourced to China and Latin America.
Digital social makes a huge difference. It’s well known that most people love shopping while socializing, from moms and clothes to Harley-riding physicians customizing their bikes. They brainstorm ideas, and this process is strengthened tremendously online. Let’s have a look at how it works.
- Customers see each others’ orders and customizations, so it’s automatically viral (“Great idea, that’s so cute, I’ve got to order one for my…”). This validates the first customer, and thousands of other customers see the interaction and are drawn into it.
- Customers seamlessly include use cases in their discussions (“I’m dressing my daughter in this for her first formal!”). I have constantly seen in client work that use case (how the customer is using the product to create joy or minimize frustration) is the root of the product’s value. When customers are among themselves, they naturally talk about their joys and frustrations first and products second. Brands like LWD that dial into this will thrive in the Knowledge Economy, which is all about customer experience, not products or services.
- LWD designers gain instant access to customer use cases, so they rapidly incorporate them into new designs; LWD “marketers” use the insights when describing designs, automatically resonating with customers.
- Customers have the chance to share their creativity in their purchase experience, which is one of the highest order social actions and extremely engaging. Most customers see others creating (customizing) and just piggyback on creators’ ideas, which adds efficiency. But all customers know they can create when they want, so vicarious experience is engaging.
- Today, customer “co-creation” is innovative, but, very soon, it will be the default. Not to sound like a kindergarten teacher, but I have seen in client work that people’s creativity is their secret love and most precious gift. When providers tap into customers’ creativity, they form strong relationships and a new level of commitment with customers, something of which product companies can only dream.
- Socially powered mass customization has been bubbling for a long time. I have been writing about it for a long time (for one, see Rebooting Kraft).
CMO Action Steps for 2014
- Most important, think of this trend outside your current situation. Although CMOs have significant influence, operational and financial realities limit what they can do. Don’t let yourself be limited by your current organization because your customers won’t. A huge portion of mass-produced brands will not survive.
- Socially driven mass customization will accelerate. Note in the Inc. post that tech startups like Soldsie are already automating platforms to replicate Lolly Wolly Doodle’s model; in effect, they are atomizing parts of the social commerce infrastructure and creating platforms that make it easier for companies in all product categories to use the model.
- Beware the conventional objection, “People don’t want to customize toilet paper (fill in other commoditized product name). Wrong! Such objections are based on mass produced product assumptions that are no longer true. True, it’s hard to imagine customers getting excited about technical aspects of toilet paper weaving and fiber content. But, how about getting it printed with the logo of your home team’s arch rival? Social experiences are a new S-curve of value.
- Don’t get fixated by Facebook or any other platform. Use any platform in which your customers are already gathering and interacting about the social use cases of your product or service. Note that LWD is extending its process to Pinterest and Instagram. Any many-to-many social platform is a candidate as long as customers like it.
- Study The CMO’s Guide to the Disruption of Products and Brands, which details front end and back end processes for adopting mass customization. Get in front of this while you still can. It is poised for accelerated adoption.
- Get additive manufacturing (“3D printing”) on your radar screen. Read my report, Knowledge Economy Products and the Future of Manufacturing, to come up to speed quickly.
- Don’t let the perfect be the enemy of the good. Start small. Observe how LWD founder Brandi Temple started very humbly. Start by studying your customers’ social use cases for your products and services and talking about them in different platforms. Use a process like the Ecosystem Audit to discover and reveal the most heated customer conversations which are rarely about buying or brand. They’re about use cases.
- Mass customization and social commerce will apply in B2B as well as B2C even though the details will vary. Don’t be lulled by conventional wisdom that says, “Social is only a factor in consumer businesses.” A good rule of thumb for B2B social adoption is look at how diverse the market is. If it’s a very small, specialized universe, expect customers to be less forthcoming because they fear competitors guessing what they’re up to. In larger, more dynamic markets, they’ll be more open.
- For a deeper dive into how people are repersonalizing the economy, see Digital Transformation’s Personal Issue.
MENG is the indispensable community of executive level marketers who share their passion and expertise to ensure each member’s success.