A Retail Spin on the Food-Truck Model
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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.
New York City artist Luz Azul
New York City artist Luz Azul also took his show on the road this year; his colorful Marco Art Truck is both a "point of sale" and a rolling billboard advertising his availability to do painting events--he can roll up with a big canvas with the outline of a painting that children can color in or he can sell coupons good for one of his own limited-edition pieces to be auctioned for charity. "It's a great vehicle, literally, for my creativity," he says.
Marco, as he is known, owned galleries on the Lower East Side of Manhattan for 15 years until he felt driven out by development. He bought an old ice cream truck on Craigslist last November "for a couple of grand" and then put it together piece by piece, bartering and calling in favors to acquire new tires, suspension and electrical systems and to cut in a new window before launching May 1. The exterior features his design done in weatherproof vinyl by a sign company. He refuses to say how much he spent beyond describing it as "G money" (that is, thousands).
Still, he describes the process of getting the truck ready to roll as painful, because of the level of detail involved and, now, the uncertainties. "You have no idea what you're getting into--it's like buying a house," he says. "Would I do it again? Probably not." Sales "really depend upon the day, the crowd, the weather, the time of day, whether it's a weekday or weekend, but on a good day it might be a couple of Gs, on a bad, 100 bucks." He sells small prints and silkscreens from the truck, but his paintings generally command $2,500 to $10,000, depending on the size and complexity.
Coincidentally, Marco started selling his work on the street, back in the late 1980s, just down the block from where the Cookies-n-Cream truck now parks. But now Marco is on the move, two to three days a week. He does not have a vendor's license because the city does not require one for street sales of paintings (or, for that matter, for photographs or sculptures). He intends to run through the holidays, then either put the truck in "dry dock" or take it on the road to Miami.
Like any mobile vendor, Marco could not succeed without social media. He tweets his location, from Lincoln Center to Park Slope, and is on Facebook. "You gotta hustle," he says. "Unlike a store, where you sit and hope someone comes in, you can go to the people." So he parks, throws open the side window, sets up paintings on the sidewalk and soon lures over "people walking by who go, ‘Whoa--art! cool!'"
He also notes that he is selling more than an object, especially if he is painting: "It's interactive--I get as much from my customers as they do from me."
And that is part of the allure for the Cookies-n-Cream team, too.
"We go to the people as opposed to the people coming to us," says Ladejobi, a twentysomething who goes by Scrills and works in commodities during the day. "People enjoy creativity; it's like we're giving an experience, not like a mall T-shirt."
The truck's name comes from the partners' fondness for sweets and their goal of having fun while running their sideline business. Johnathan Sinclair is a producer for BBC documentaries while Peterson (P Loch) Lochard is studying for law school in the spring. Their last enterprise, a hip-hop television station on the Internet, failed for lack of backing.
By contrast, they have customers offering to invest in the truck. Not only that, they can afford to decline, having recouped 70 percent of their startup costs in the first two months of business.
Their online store, BakedinNY.com, sells tees and collectible toys designed by artists for $35 to $200. And they stage a networking party every Friday night on the Lower East Side, with free admission and music.
"We sell cool," says Sinclair, who wants to a build a Cookies-n-Cream culture like Google's or Starbucks'.
Along with giving every buyer Internet fame with a photograph on their website, they throw in a bottle of water, juice or energy drink. They boast that most of their products are made in the U.S., which helps with sales, and that they have turned down offers to sell their tees in stores.
"You can't find them with 30 or 40 brands in a store. This is cooler," Scrills says.
Doing business on the street on weekends feels more like a party, they say, than an extension of the workweek. Sinclair, a DJ who goes by Jon Blak, puts together the soundtrack and hopes to build a franchise with trucks in Miami, Los Angeles, Vancouver, Quebec or Toronto. "People ask when the truck's coming to their town," he says. But for now, they're holding out because they're enjoying having total control.
And, of course, as Scrills says: "If we took a dollar from every tourist who takes a picture of the truck, we'd be millionaires by now."
A 21st Century Farm Stand
There are food trucks and then there are food trucks. Holton Farms, an eighth-generation spread that produces everything from herbs to lamb to eggs in Westminster, Vt., has started what is essentially a farm stand on wheels--a 21st century strategy for catering to urban clients without being limited to competing in a crowded Greenmarket.
The white truck with bucolic barn scenes painted on the sides is out seven days a week in New York City through November, having just acquired a permit to sell retail. It began by delivering ordered produce and has expanded to sell produce on the spot as well as items such as maple syrup and coffee--"Anything you could find at a farmers market in one place," says Bradley Fleming, one of the young team members helping to run the truck. (Members have no titles, he proudly notes.)
The farm has been in the same family since the 1700s. But the latest generation--Seth Holton, who took over from his father, and Jurrien Swarts, a cousin who grew up on the farm--decided to go mobile to expand sales beyond local farm stands and restaurants and specialty shops. Their mobile mission is heavily philanthropic, too: Swarts left a finance job in July, wanting to service "food deserts," parts of the city without access to great fresh produce.
The pair partnered with other local farms to source meats, dairy and prepared products like sauerkraut, and found the truck on eBay in Connecticut. Fleming painted the inside. A stereo system to play reggae was installed to add a good vibe, and a small walk-in refrigerator was built in. All told, Fleming says, it cost more than $15,000 to turn the truck into a store on wheels.
A truck permit and mobile vendor permit were also acquired, the latter with great difficulty because so few food permits are available. The truck parks outside residential buildings in Battery Park City and the Upper West Side as well as on Roosevelt Island, but it travels to office buildings as well, sending to its fans via Twitter information on its location and stock.
Swarts says this pilot season has been rough, given that one $150 parking ticket can eat a day's profits. But considering "there are so many things going on with a startup, I'm happy, our investor is happy." --R.S.