A Retail Spin on the Food-Truck Model

A new fleet of entrepreneurs are creating their own spin on the food-truck model some with seriously cool mobile retail.
A Retail Spin on the Food-Truck Model
Image credit: Photography by David Johnson
Movin': Johnathan Sinclair, from left, Peterson Lochard and Ganiu LadeJobi.

On weekends, one of the hippest places to shop in SoHo In New York sits at the corner of Broadway and Prince, with street artists to the west, trendy stores all around and an endless stream of tourists and shoppers flowing past on the sidewalk. Danceable music pulses out of speakers to stop the human stream long enough for it to notice a show window with graphic T-shirts and collectible toys on display. And every few minutes, a passer-by becomes a patron, handing over $35 in cash for a tee and providing a smiling photo op--everyone who buys is snapped with a Canon digital camera, his/her visage to be posted on a website.

But this is no ordinary boutique: It's on wheels, and that window is cut into the side of a converted DHL truck. Despite the name emblazoned on either side--Cookies-n-Cream--it sells nothing edible. The three entrepreneurs behind it are focusing instead on tees and toys pushed to a hip-hop soundtrack while scheming to take boutique trucks to more cities.

As the startup's creative director, Ganiu Ladejobi, says: "We're at the intersection of cool and cooler."

Already food trucks have shaken up the restaurant world, with ambitious cooks no longer confined to kitchens and committed to crippling rents and problematic locations. Now the mobile phenomenon is entering its second phase: retail. A small group of cutting-edge entrepreneurs, often from the art and design worlds on both coasts, is skipping the brick-and-mortar boutique for highly stylized sets of wheels. The movement is literally fashion-forward.

National companies have been sending their wares out on wheels. Designer Cynthia Rowley has a "mobile fashion unit" traveling the country, stocked with her latest styles and equipped with a changing room. Armani Exchange has sold jeans from trucks in Los Angeles, and the Olsen Twins did a similar stunt for their line for JCPenney last fall.

It's not hard to see why vendors would want to hit the streets; the "for rent" signs plastered everywhere are testament to how hard it is to keep a traditional business afloat. Consider the rent advertised on a ready-to-move-in store on Prince Street near the Cookies-n-Cream location: $53,000 a month. Just the rent. A truck can get rolling for only a few thousand. Add in texting plus social media like Facebook and Twitter to keep the clientele posted on whereabouts, and the marketing plan and the cool factor are both covered.

Trucks, whether selling food or fashion, offer "uniqueness and urgency," says Patricia Norins, a specialty retail expert and magazine publisher based in Hanover, Mass. "There's an immediacy factor," she says. "The customer is not sure you're going to be back. And there's a certain level of uniqueness that's important. There's a certain level of homogeneousness in the standardized mix of shops you see other places."

More important, Norins notes, is that "it feels trendy, like the hip new thing--people are interested in different types of shopping experiences and are looking for new venues. Maybe they don't want to go inside, maybe they don't think they're going shopping until they see something that creates an impulse buy."

Anatomy of a Retail Truck

With a "real" store, you need months of rent up front, a showroom, a stockroom and a full-time staff. Go the truck route and the startup costs drop fast. Consider the Cookies-n-Cream tab:

Used DHL truck - $3,600
Vinyl wrap printing costs - $1,865
Van wrap - $600
Lights installation - $300
Windows installation - $1,600
Audio installation - $500
Audio equipment - $400
Cutting out windows - 350
Commercial registration - $568
Painting - $650

Total costs = $10,433

Beyond the fashion-forward element, mobile merchandise vendors have other advantages. Unlike the ubiquitous food trucksters, they do not need licensing by the health department, their stock is not time-sensitive and at this point the competition is almost nonexistent--even the clothing stores on Broadway where the Cookies-n-Cream partners park are happy to have them, they say, because the truck and the hip-hop make potential buyers slow down to window shop and maybe venture inside.

Vending licenses can be hard to come by, though: New York City approves only 853 permits each year for sellers of general merchandise who are not veterans. (Fortunately, they cost only $100 to $200 a year.) Some cities, such as New Orleans, do not allow the sale of anything except food from a truck.

But with the bar for entry set so low, it's easy to see the allure. The Cookies-n-Cream partners got their showroom rolling for all of $10,000: the cost of the used truck plus refitting it with a sales window, stereo system and vinyl exterior in a design echoed by one of their T-shirts, which are designed by a cadre of artists. For now, the trio doesn't even pay for parking; they store the truck at one partner's grandmother's place in Brooklyn. On a good day, they might sell $1,000 worth of T-shirts and collectible toys; on a slow one, it's more like $300.

Mitra Khayyam, whose Los Angeles company Blood is the New Black sells artist-designed T-shirts both online and wholesale, was buying a taco outside an art gallery in April when she thought "What about selling T-shirts from a truck?" Despite her company's gross sales of $780,000 in 2009, she says she wasn't sure she wanted a brick-and-mortar presence, so "this is a way to test the waters to make sure we want to take a leap into permanency."

Within the month she found an old Aramark delivery truck on Craigslist for $12,000. She soon had two other companies signed on as partners, and by June 6 her Summer Fling truck was on the road around the city. It was even simpler than the pop-up stores she had tried in the past for a month or week or couple of days.

A truck basically needs an eye-catching design--hers is wrapped in wild pink with stripes and dubbed "the party zebra"--and, in most cases, a window either to display merchandise or to handle transactions. Just as with a Mister Softee truck, music is a draw, so an audio system is also useful.

Khayyam's truck carries ice cream sandwiches made by Coolhaus, a high-profile mobile vendor in Los Angeles and New York, because local laws prohibit trucks selling only merchandise. "It has a food truck vibe but mixes it up," she says. "If people are expecting food, they're not disappointed. If not, they might buy T-shirts." Or accessories for BlackBerrys and iPhones manufactured by Case-Mate, her second partner. The truck has a computer monitor on which customers can customize their I Make My Case cases on the Case-Mate website.

The truck parks outside schools, record stores and art galleries in hip areas such as Echo Park, Venice and downtown Los Angeles. "We try to go after the creatives, with like-minded customers who like having us outside their store."

T-shirts sell for $20 to $30 and ice cream for $3 to $5--"at the end of the day we make more with the tees but the margin is better on the ice cream." Her biggest expenses are the (undisclosed) wages for a part-time driver and salespeople and the cost of the truck itself.

Khayyam, who has a degree in design marketing and management from Parsons The New School for Design in New York, intended the truck to stay on the streets only through the summer because "I like the idea of doing something temporary, with a greater sense of urgency." She hopes to sell it after October, and if she doesn't recoup her investment, plans to write it off as a marketing expense.

"Everything I do is a brand extension," she said. "I'm not there just to sell tees; the point of the line is to teach people about the artists" who design them.

 

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Regina Schrambling is a writer in New York City.

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This article was originally published in the November 2010 print edition of Entrepreneur with the headline: Four Wheels and Style to Burn.

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