Delivering smiles and growing exponentially online
Sometimes you’ve got to know when to fold. Kim Gans had been selling scrumptious cookies from her gourmet retail store Sweet Flour Bake Shop in Toronto's Bloor West Village for six years. She loved her store, and even aspired to open a second, but the time had come to close its doors.
Source: Sweet Flour Bake Shop
Sweet Flour had put itself on the map with its trademark 2-minute cookie — a customizable concoction baked at high-speed to perfection. But Gans' business had long since outgrown its retail presence, which was burdened by hefty rental costs.
“When we finally realized our store was slowing down we spent more time on the online side of the business. The more we spent online, the more it grew. (Closing the store) allowed us to take the exorbitant rent and re-invest it into supporting the growth of our online business. That helped accelerate our growth significantly, not just from a financial perspective but from a resource perspective.”
Gans closed her store in fall of 2015. Sweet Flour's tasty treats are now baked and shipped from its production kitchen a few kilometres away. “When we opened our production kitchen (in 2012), we were growing a lot,. The question was ‘Do I open a second store or do I open a production kitchen? While my passion was to open another retail concept, the business economics said ‘No, you have to support your demand of your current customers with another kitchen.' Trying to do that out of high-rent retail in another store didn't make sense.”
Gans never expected to sell her products solely online. She'd always loved the idea of creating a cafe experience for her customers, where she could enjoy their reactions as they bit into one of her freshly baked goodies.
Source: Sweet Flour Bake Shop
“My passion has always been about directly interacting with customers. Part of the reason I got into this was the way cookies make people smile, how it allows those connections. It's the nostalgia.”
She misses her walk-in clients buts social media keeps her connected to her customers.
“It took me a while to realize you can interact with your customer in a more meaningful way online than in years past. It gives you that one-on-one dialogue, it gives you instant feedback. There's nothing better than a customer posting a photo of the cookie cake that just arrived at their door. We have always listened to customer feedback and used that to our guide for changes and new product development. “
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Gans has great insights for those looking to move their business online:
The numbers don’t lie
“It's important to constantly be evaluating your numbers,” said Gans, a former economics major and MBA. Walk-in traffic once made up 100% of her business but shrank to about 35% by the time the store closed. Gans forecast a 10 to 15% drop in sales without a brick and mortar location but growth in online and wholesale “far outweighed” any loss. Sweet Flour's production kitchen is four times the size of the old store kitchen and costs 80% less to rent.
Change can be good
Gans' passion for retail made her reluctant to close the physical store. However, the move has led to such rapid growth in other parts of her business that she expects to reach $1 million in annual sales for the first time this year.
“Don't look at change as failure,” Gans said. “For us, change ended up being growth. People will say ‘You're shutting down, you're getting smaller.' In fact, we took a step back to take a step forward and grow. But it takes courage to do that.”
Let go of past mistakes
Gans had made a considerable financial commitment to renovating her store but realized it wasn't smart to be tied to those sunk costs.
“I completely gutted the store,” Gans said. “I remodelled it and bought brand new equipment. You can't get that money back, and it's not a reason to stay if your growth is somewhere else.”
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A great shipping partner is key
Kim partnered with Canada Post because shipping is a big priority now.
“For us, getting fresh baked cookies to our customers as soon as possible is critical. Canada Post has never let us down doing that”.
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