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03/14/2014

Making Millions on Facebook: Apparel Brands Find Success on Social Platforms

In today's world, new fashion brands no longer are beholden to yesterday's business models reliant on banks for, well, bankrolling. Got a winning idea for a new line? Take it to the people on platforms such as Kickstarter, which allows ordinary consumers to help fund everything from social causes to innovative products.

That's how Eva & Paul, an organic, fair-trade denim brand, got its start. Founder and CEO Julia Kastner, speaking at the Social Retail Summit earlier this year, says she launched the social fundraising campaign in May 2013 and exceeded her $20,000 goal in just 32 days. By late summer, Kastner had her handprinted Indian-sourced fabrics in hand and production was underway in New York's garment district, starting with three jeans styles. "Starting small and lean allowed us to take the time to do it right," she says. "People like to see and hear how things are made. Our biggest hits on social media are photos of workers cutting materials by hand."

The brand, now carried in socially responsible outlets such as Brooklyn's Kaight Boutique as well as online, competes with bigger denim labels by using more cost-effective but still high-end organic cotton from an Indian supplier that  provides liveable wages, improved working conditions and access to healthcare and education for its employees. Eva & Paul manages costs by cutting out the expensive wash processes used by most denim labels. "Then my margins start to look more like True Religion's," Kastner explains. "People will accept artisanal prices for artisanal products."

Bayard Winthrop, CEO of San Francisco-based knitwear company American Giant, which also manufactures at five locations in the U.S, says American cut-and-sew companies have been in a "race to the bottom" for years. "There's a huge underutilization in the U.S. cut-and-sew sector but what has been lost is a commitment to quality," he explains.

Instead of prioritizing margins above all, U.S. manufacturers should make quality the focus. "We feel some subsector of consumers is tired of the dumbing down of quality," Winthrop adds.

Serious sales through social commerce
While brands such as Lolly Wolly Doodle may be the posterchild for building successful businesses on Facebook, Soldsie is helping other up-and-coming apparel labels get in on the social commerce action, too. Soldsie co-founder and CEO Chris Bennett says his company enabled $15 million in sales in 2013, up from $750,000 the year prior.

With a focus on Facebook and Instagram, Soldsie allows companies to accept a sale simply by having the customer leave a comment — followed up later by an invoice and payment. According to Bennett, many brands use Soldsie for flash sales and weekly product launches on Facebook. The Polkadot Alley, which sells customizable apparel and gifts, generated $1.5 million in Facebook sales with the social commerce company last year.

Any brand with either 100 likes or 5 percent of its fans actively engaging is ready to launch on Soldsie, Bennett says, which plans to integrate on other social platforms in the future.

Meanwhile, Blipshift, a t-shirt brand for auto enthusiasts that exclusively crowdsources its designs, relies on both Twitter and Facebook to drive sales, with the latter generating 20 percent of transactions. The brand launches two new designs weekly, usually on Monday and Thursday, with each available for about three to four days. "Twitter helps customers to react quickly, especially because items are available for a limited time," says co-founder Joe Oh. The day after launching on social, new products are pushed out to Blipshift's email list, which gets about a 60 percent open rate and generates about 30 percent of sales.

Shoppable content
As print magazines languish and their digital counterparts start to take hold, innovative tech companies are finding ways to better connect consumers to the products they browse in their favorite digital pubs. One such firm, 72Lux provides white label universal checkout and shoppable technology, working with publishers to integrate commerce into their publications so that when a consumer is engaging with her favorite magazines online or via app and comes across a craveable pair of Jimmy Choos, she can buy immediately through a pop-up box right then and there — without leaving the magazine. After all, magazine companies don't want to redirect their readers away from their sites to retail outlets if "they've already spent about $10 getting them there," notes CEO Heather Marie.

Showrooming is so 2013
In a departure from the showrooming hype of 2013, this year will bring a shift to "webrooming" — researching and browsing online and then spending more money in stores through fewer visits, says Dax DaSilva, CEO of point of sale provider LightSpeed. "E-commerce is not something to be afraid of — it will bring more informed consumers into stores," he says. In the age of converged commerce, brick-and-mortar operations will focus on bringing the best of e-commerce into the store environment if they aspire to remain relevant.