The Hippocratic oath “do no harm” was Lilly Pulitzer’s unofficial motto when the brand launched an online store in November 2008. In fact, the company has exceeded expectations by increasing business for its retail partners.
Lilly Pulitzer knew social media was heating up and thought its customer wanted to shop online, but didn’t want to alienate its distribution network of mom-and-pop boutiques in resort towns scattered through the U.S. For many of these accounts, Lilly Pulitzer is 80 percent or more of the merchandise mix. They are the brand’s best ambassadors because they are tapped into the local scene and understand nuances like the timing of Daffodil Week, said chief executive officer Scott Beaumont.
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“When you’re in wholesale and you do e-commerce, the account base wonders if you’re for or against them,” he said.
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The company had moved online fairly early with a non-transactional Web site in 1998, the purpose of which was to drive foot traffic into the local stores. Visitors were spending an average of seven-and-a-half minutes on the site. “We felt they were looking to shop and frustrated by the inability to shop,” Beaumont said.
Plus, the company wanted to stay relevant to younger customers. “We also were seeing other things that were going on in social media and online marketing. We didn’t want to be like the rotary phone guys, which can happen,” he said.
By looking out for the needs of the small stores, the brand created a win-win for both, according to Beaumont. If a local store mails out a catalogue, and someone at that address makes an online purchase, the store gets a revenue share. If a customer can’t find what she is looking for online, and comes into the local store to complete an outfit, the store gets a “very meaningful revenue share” of the online purchase. If a customer returns something she has purchased online to her local store, the store helps process the credit and gets to keep the merchandise for free. In 45 percent of cases, the customer buys an additional item while she’s there. And if the online store is out of stock, it will fulfill the item from an independently owned store and give that store a cut of the revenue.
“In most cases, this is found money for them. It generates traffic, lifts the brand, and they get additional income from it,” said Beaumont. “The store loves it. The customer loves it. And we end up getting an additional sale as well.”
The Lilly Pulitzer customer spans a range of age groups and lifestyles, from singles in college on up. She travels a lot, and 28 percent own a second home, so Lilly Pulitzer’s multichannel approach is convenient for her.
The company’s Facebook page has more than 56,000 fans. “Having the e-commerce site has made us more relevant in terms of being able to participate well in social media,” Beaumont said. “We are a social brand, it’s easy.”
Future plans include iPhone applications, shoppable videos, international shipping and stores on Facebook. But none of those are immediate, Beaumont stressed.
The online store doesn’t discount, and rarely holds sales. “You either get it and you love it and you think it’s a tremendous value at the price, or you have no idea why anybody would want it,” Beaumont said. “Better to be the first choice of some than the third choice of many.”