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The Lilly Pulitzer Stampede Shows Capitalism Works


If you’re a fan of Target, that Minnesota-based company of bullseye fame, or even if you’re not, by now you’ve heard about the one-day sale it held of designer Lilly Pulitzer’s preppy, tropical-print clothing. Somehow it’s been deemed newsworthy because many customers were unable to purchase their $200 designer dresses at the $40 discount price so somehow came to insist that Target had failed them.

This isn’t so much about fashion as it is about its futility; it’s less about Target and more about the beauty of the free-market enterprise.

It’s Just Clothes

While there is rigorous and snarky debate over whether Lilly Pulitzer clothing is even “real” fashion or just a preppy stand-in for wannabe one-percenters that “stir[s] up scrapbook notions of ancient family trees, summer compounds, boarding school uniforms, and large, granite buildings inscribed with some great-great-grandfather’s name,” I am as concerned about whether Lilly clothing is high-end fashion as I am that my Sperrys will go out of style soon (they won’t).

What is disconcerting, and I mean that in a first-world American problem kind of way, is the lack of discussion—heck, one could say appreciation—over the way capitalism handled this whole thing. Like. A. Boss.

But It’s More Than Clothes

Apparently Lilly Pulitzer clothing is so popular and so darn expensive that when Target announced in January it was holding this collaboration with said designer, fans everywhere went berserk. The day of the sale, folks were waiting in line in the rain just to make out with their own private stash of upscale prep heaven at the nifty French discount Tarjay price.

Some people call it hype, capitalists call it good marketing.

Behold: The first free-market win. This is the calm before the storm. Some people call it hype, capitalists call it good marketing. As Adam Smith said: “Man is an animal that makes bargains: no other animal does this—no dog exchanges bones with another.” He said it. Not me.

Unfortunately, all this excitement created more of a frenzy, according to some media outlets. Surely this headline is in the running for most ridiculous of the year: “Target Could Have Prevented Lilly Pulitzer Frenzy, Experts Say.”

What a strange premise. The designer product sold out entirely within a few hours; many people went home empty-handed. Target’s website purportedly crashed. According to Target’s chief merchandising and supply chain officer, Kathee Tesija, the site didn’t actually crash, but was simply much slower due to the sudden increase in high traffic. Finally, some customers who did purchase Lilly merchandise immediately headed to eBay to resell the items for double the original cost.

I’m not going to be as bold and say this is the second free-market win, because it’s a bit of both. However, Smith did also say, “Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.”

Marketing Lessons Learned

The thing about the free market is, in layman’s terms, it always works itself out. Of course Target’s Tesija blogged the company finds reselling the product they just offered a killer deal for twice the price on eBay “disheartening.” But if you can buy an “original” Lilly Pulitzer for $200 or the eBay Target version for $100-$150, common sense determines that’s a deal, right? So Target should forget it.

If you can buy an ‘original’ Lilly Pulitzer for $200 or the eBay Target version for $100-$150, common sense determines that’s a deal, right?

However, Target should have foreseen the merchandise’s and prepared its website and in-store stock accordingly. On the one hand, “the customer is always right,” right? (Unless you’re an Apple customer, than you are only right when Apple is right because Apple is never wrong.) According to Tesija, they’re aware of their error and “committed to making improvements.”

Diana Harbour is the owner of Red Dress Boutique. You might recognize her because she appeared on Shark Tank and brokered a deal with one of my favorite, most efficient, and most cunning of today’s businessmen, Mark Cuban (holla!). She not only participated in the Lilly sale but anticipated Target’s problems and already had a plan in place for her company to offer a solution to them.

If that concept alone makes your intellectual crush on Milton Friedman that much stronger, you are a fledgling capitalist. In our correspondence, Harbour says the demand for Lilly Pulitzer, combined with a 2011 clothing launch that also went badly, “made for a perfect cocktail of too much demand with too little product.” She said Target’s entire web site was sold out of all Lilly items before dawn.

Savvy and prepared, Harbour realized her company had “tremendous crossover customer base with Lilly Pulitzer and Target and through utilizing the trending hashtags on twitter ‘LillyforTarget,’” so she offered a 20 percent off coupon code to her site, enticing customers further: “Didn’t get anything you wanted from #lillyfortarget? @shopreddress has your back! Take 20% off site wide with code: FAMILY20.” In 12 hours, Harbour made over $100,000 in retail sales.

Harbour says she’s just aware and informed of what her competition is and where the frenzy is, as well. “The frenzy is a great thing. Scarcity does breed demand. But only if you have the product to capitalize on it […] At the end of the day it’s all about getting the customer what they want.”

Next time, Target, the media, and hopeful shoppers should prepare for the frenzy, embrace it, and, at the end of the day, thank the free-market system. Without it, we’d all be stuck wearing Sperrys in Target-brand clothes.