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When Local Biz Attends Your Holiday Party

Young start-ups skip storefronts in favour of events, markets and sweet collaborations.

Jesse Donaldson 4 Dec 2015TheTyee.ca

Jesse Donaldson is an author, journalist, photographer and one of the founding members of The Dependent Magazine. His first book, This Day in Vancouver, was shortlisted for a 2014 B.C. Book Prize. Find his previous articles published in The Tyee here.

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'Tis the season for handcrafted nog-mallows.

Kyle Archibald gleefully refers to his business as "a crafting project gone completely bananas."

Founded back in 2012, Archimallows -- which sells custom-made, flavoured marshmallow treats -- is already enjoying considerable success, as much thanks to its sugary creations as to its innovative, multi-channel business model -- one which combines events, online sales, corporate partnerships, and a pop-up shop on Pacific Centre's Holt-Renfrew.

"One thing leads to another," he notes. A stall at a craft market may drum up interest in a few wedding contracts, for example, or a seasonal pop-up shop may drive new web orders. With this ever-shifting model, Archibald sold a record 35,000 marshmallows last Christmas. "It was completely insane."

Employing a staff of between three and six (depending on demand), Archimallows also operates without a brick-and-mortar storefront, significantly reducing overhead -- particularly in a city like Vancouver, where rents are high, and there are no rent control provisions on commercial space.

"Anyone I've talked to about a brick-and-mortar location is like, 'Don't do it,'" says Archibald. "The nature of my product is seasonal, so I can go set up somewhere, shut down for three or four weeks, and go back at the next busy time. I don't have to worry about overhead, or walk-by traffic."

Instead, the Holt-Renfrew pop-up shop appears six times per year, supplemented by "smores bar" contracts at special events (he averages one wedding per week between June and October), and a number of what Archibald calls "thoughtful collaborations" -- specialized items or stores-within-a-store developed specifically for local partners, including Kitsilano's Rebecca Bree Boutique.

"I can run all the aspects of my business more easily this way," he says. "I've got my commercial kitchen. I've got avenues to ship my product online. So it allows me to do whatever I want. I'm not strapped in by 'Oh, how am I going to make rent?'"

Recipe for success

Archibald's multi-channel approach has been part of his business since the beginning; after making flavoured marshmallows as a Christmas offering at his partner's workplace ("He came home with 24 orders," he laughs), Archibald began exploring the concept in earnest, embarking on a small-scale collaboration with Rebecca Bree, and later opening up a stall at the Whistler Farmer's Market.

"I kind of fell into weddings, and became the 'smores bar' at weddings," he recalls of Archimallows' early days. "I'd come with flavours of marshmallows, regular and gluten-free crackers, and strawberry, caramel, and chocolate sauce. Plus, Baileys and Kahlua to dip the toasted marshmallows in. And then, from there, I went up to Whistler for the summer, and sort of fell into the Whistler Farmer's Market."

The Holt-Renfrew pop-up began in February 2014; continuing a lifelong association with the fashion world (he worked in the industry for close to a decade) Archibald made a pitch to the store, and was on site selling Archimallows in time for Valentine's Day. Rather than paying a flat fee or rental charge, pop-up shops on the skywalk typically fork over a percentage of sales, making it an attractive option for entrepreneurs like Archibald, who are entering the business world without substantial startup capital.

"It's a low-cost way to have that customer experience," says Amy Robinson, founder of local business alliance LOCO BC. "It gives you a small chance to interact with consumers. That's what we hear from businesses that start out at Farmer's Markets, or Portobello West, or pop-up shops in town. They get that direct customer feedback that can be so helpful when launching."

Sweeten the deal

Archimallows is hardly unique in its omni-channel approach; a number of Canadian businesses have recently begun extending their operations into multiple marketplaces: The grocery delivery service SPUD, after more than a decade of online sales, opened its first physical location this past summer at the corner of 1st Avenue and Cypress. And local vintage retailer Hey Jude took a slightly different angle before they opened their first retail space in 2015, using more than two years of pop-up shops to determine demand.

A recent LOCO BC report suggests these multi-channel approaches are proving effective across the retail landscape -- not just for business, but for customer engagement. The study found that every dollar spent online translates to $10 spent in a physical location, and that the average amount spent by "three-channel shoppers" is more than twice that of shoppers who only engage with one. As online sales climb over time, this sort of integration will prove increasingly beneficial for all aspects of a business, say the report's authors.

"I think the future is going to involve more of a seamless connection between the online and the offline worlds," explains Robinson. "People will have to do both. We'll see online retailers supporting offline activity -- getting in front of customers at trade shows, or partnering with local businesses to get their products seen -- and then, businesses with bricks and mortar stores will be moving online, and learning to navigate. The customer wants a seamless experience."

And what does the future hold for Archibald? For starters, his pop-up shop has returned to Holt-Renfrew, featuring flavours like Red Velvet, Gingersnap, and Cherry Cheesecake (as well as a custom box designed by fashion illustrator Monica Smiley). He is currently collaborating with Lori Joyce of the local sweet shop Cupcakes (who he jokingly refers to as his "sugar mentor") on expansion possibilities, including pop-up shops in other Holt-Renfrew locations, franchising, and eventually, moving into the U.S. market.

"I didn't sit down with a business plan when I started making marshmallows," he laughs. "So I'm at a point where I could use some help from people who have navigated these waters before. It could be more pop-ups within stores. It could be a really strategic wholesale distribution." Though unsure what his next innovation will look like, Archibald is confident he can figure it out. "I know what I'm doing is working, and I'm learning now how to scale that business."

For now, though, Archibald is focused on the coming season (Christmas and Valentine's Day being the business' busiest time of year), expanding into a few more select business partnerships, and above all, remaining Vancouver's self-proclaimed "unapologetic candy guy."

"I'm not going the natural route," he grins. "You can't put blue sprinkles and little white snowflakes on something that's 'natural.' It's delicious, really bloody cute candy. It's the kind of gift you give somebody when you want something."  [Tyee]

Read more: Food

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