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January 2013 Now including My Local Pool Shop Monthly News.  

‘Pop-up’ and Mobile Stores Add To Pressure On Bricks & Mortar Retailers


Rapid developments in retail operations continue to increase pressure on bricks & mortar retailers. Perhaps this is this an opportunity for forward thinkers?

Selling goods out the back of a truck isn't new. It's been around for eons.Before there were trucks, it was a cart or even a donkey.

Food is sold all over the world by mobile retailers. On the Pittwater in Sydney the greatest coffee is served right to your boat by the Coffee Boat, along with a newspaper and even hot food. Then there are the legendary roasted chestnuts on a cold night in New York. Or the 'slurpee' vendors on the hot streets of a Roman summer, "Cowley's Pie Cart" in Adelaide, and so on.

Back in 1958 Woolworths launched its mobile shop in the main streets of Basildon New Town, Thetford, and Haverhill in the UK. It wans't until around 50 years later in 2009, that retail trucks were seen around New York. By 2011 there were almost 100 mobile traders across the US.

A whole new retail subculture is developing across the USA, where they even have a retail association called the West Coast Mobile Retail Association. Its territory stretches from Los Angeles and San Francisco to Northern California to the Pacific Northwest, San Diego and the South West.

Truck-based retailer This is a new form of retailing that is organised - and growing fast. Most of the retailers are selling fashion, but a host of other products are sold including flowers, school supplies, second hand St. Vincent de Paul clothing, natural organic bath and home spa products, and shoes.

The Retail Association provides advice on how much capital is required to get started, what type of permits and licences are required, what kind of insurance is needed and what the municipal rules for selling from a vehicle are. The association even guides you on where to find a truck, create a newsletter and run webinars.

These mobile retailers say: "High rents and business-savvy creativity are pushing more retailers to take their shops on the road". The inside of each truck is fitted out as if you are shopping in a real store.

And USA Today ran this: 'Trucks could become more mainstream as the go-to business model for all sorts of entrepreneurs, several owners say. Michael Gomez is waiting for approval of his Hairmobile franchise, hair salon trucks he hopes to launch nationwide in 2013.

Owners would pay a franchise fee of less than $200,000 for a fully outfitted truck that includes two salon chairs, two sinks and the option for a nail salon area, designated territory to do business in their respective cities, and customer service and marketing support. "Mobile sites are pretty much the way of the future to decrease overhead and increase profit for a small-business owner," Gomez says. He plans to have more than 2000 trucks within 10 years,' and 2000 trucks would hit a lot of hair salons!

For Australian and New Zealand business owners, the motivation to "go mobile" has come from high rents. Much has been written about high retail rents in Australasia too, but that is only one of the high costs of doing business.

If you have a small store, and employ one or two people, the lower costs of mobile operation mean you can probably do without extra staff as well, and run a very low cost, low margin operation that is highly profitable!

In addition to the threats from mass-merchants with their low transaction cost model, and the internet with its ow cost business model, mainstream bricks and mortar retailers can now look forward to another threat looming.

Or, is this the next big opportunity?

 
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