TWO years ago, architect and former hospitality worker Zenta Ganaka wanted to create something different.
He had ideas about a shared architectural office where people could walk in off the street, then he hit on the notion of combining a lifestyle retail store with a cafe.
After all, he’d worked in design and had an interest in designer objects and furniture, and had worked in hospitality. And cafes nowadays are community spaces.
He set up his store and cafe, Cibi, in a warehouse in Melbourne’s fashionable but grungy Collingwood.
The idea was to offer great coffee and food (with a Japanese spin) as well as up-market Japanese designer goods, contemporary Danish design and rustic Australian objects. What he did was marry a cafe with proper retail nous to create an attractive retail store using lessons learned from design retailers, with goods displayed and laid out properly separate from the cafe.
The Cibi case is unusual. Ken Burgin, chief executive of restaurant management website www.profitable hospitality.com, says that many cafes handle retail badly.
“If you are going to do retail you have to think like a retailer and think about placement and displays,” Burgin says. “Have shelf takers to tell people what products are for.
“Go and look at and learn from clever retailers.”
Also, list retail items on the menu to help sell them.
“A lot of people come into the shop now, but in the early days people came for the cafe,” Ganaka says.
People have begun to understand the concept, he says. Some people just come in for coffee and browse the store, while others come in especially to shop and stay for coffee or a meal while they are waiting to pay or have their goods gift-wrapped.
“Sometimes people come in for takeaway coffee and start browsing around. And they come back later to buy something,” he says.
“Then we are really happy because the customer has engaged with both parts of the store.
“Both sides of the business feed off each other and bring in extra income.”
It’s becoming common for stores and cafes to blur the lines between the two, although few do it well.
The main advantage is that combining a store and cafe provides a point of difference when competing with Australia’s 13,987 cafes and restaurants (according to the Australian Bureau of Statistics) on what is an increasingly competitive high street.
“There’s no point of difference between most places,” Burgin says. “Even the cool places have a conformity.”
But for many cafes that sell jams and other goods, Burgin says, it is unlikely they will make much money.
He says rather than selling somebody else’s product, it’s far better to brand it with the cafe’s name and price it to sell to promote the brand.
Burgin says when he ran cafes, he would sell T-shirts at cost price so the brand would “walk the streets”. “Price it to just get it out the door,” he says.
“The profit has to come from the food you are going to sell.”
Danielle Finning runs the Ambrosia Cafe in Melbourne’s outer suburb of Berwick, where 6 per cent of income for the 160-seater restaurant comes from incorporating a food store section that sells items such as puddings, gourmet jams, gingerbreads, and cheeses.
Deciding on an appropriate range of goods for sale has involved trial and error since the store opened in 2004; a deli section, for instance, proved difficult to operate.
“People didn’t want the convenience meals,” Finning explains.
While additional sales from the store are small, there are some items that drive people into the restaurant.
“People definitely come in to just buy Ben and Jerry’s ice cream,” Finning says.
She puts this down to its offbeat branding and marketing style, as well as the fact there are not many other stockists nearby.
And a Ben and Jerry’s sale usually leads to additional money in the till from a takeaway coffee sale. Items at the $6 mark also sell well.
Among the comestibles stocked, items incorporated into dishes sell well, as do novelty gingerbread shapes (such as smiley faces at $6.95. And $6 soaps are also popular among customers.
“People like the smell and at only $6, they are a little bit of change on the way out,” Finning says.
“It works well and guests love to be able to grab a quick gift for themselves or be able to purchase a gourmet item they have just tasted when we have incorporated it into our menu.”
KEN BURGIN’S RETAIL TIPS
Sell branded products at cost to promote the brand
Goods priced at $6 to $8 sell well at the till
Promote products that are used in cafe meals
Think like a retailer and experiment with the layout of goods for sale
Also sell goods on the cafe’s website. Paypal now makes selling online cheap and easy
Use shelf talkers and other retail techniques to help sell products
Have a price list in the cafe, on the cafe website and incorporate it into the menu
Don’t have retail goods at bag height. They are bait for shoplifters