As part of the Small Business Experience at Retail’s BIG Show, a panel of small business owners discussed the pleasures and pitfalls of launching a small retail business. The session was moderated by David Rabkin, EVP and general manager of global marketing for American Express. Panelists included John Cafarelli, president and founder of Ernest Supplies, Robin Helfand, sweet chief and owner of Robin’s Candy, and Jomaree Pinkard, co-founder of Hella Cocktail Co.
Check out the official recap for photos, videos, articles, presentations and more from Retail’s BIG Show 2017 .
Each of these entrepreneurs was motivated to start a business by a personal enthusiasm. Jomaree Pinkard’s hobby was mixing his own cocktail bitters, stimulated by the current renaissance of interest in complex mixed drinks and a sense that the ingredients in the standard commercially available cocktail bitters were less than they could be, from the standpoint of both healthiness and taste. John Cafarelli was a financial worker and frequent flyer who reached the same conclusion about skin lotion; Robin Helfand was a corporate employee who loves artisanal chocolate.
Every new venture, observed Rabkin, experiences moments of sudden growth opportunity. Asked to describe such a moment, Pinkard said that he and a few friends were making their bitters as a hobby, wanted to try them out on a larger audience, and, in 2013, took a booth at the Fancy Food Show. “We had a big response,” he said. “Fulfilling those orders was a real challenge, given the limited cash we had on hand.”
Cafarelli’s experience was somewhat similar. When he found someone to manufacture the moisturizer he wanted to present, he quit his job and had samples made. To pitch the product, he set up “desk presentations” at Condé Nast, Hearst and other publishers to try to interest the appropriate media. At first nothing happened, then GQ ran an item on the product and Ernest Supplies sold overnight.
“I learned two important lessons from that,” Cafarelli said. “One is that you need to have a robust website in place, so when something like that happens it doesn’t crash and lose the orders. The other is that you need to have the financing in place to provide the inventory you need.”
“Taking advantage of growth moments requires a certain amount of chutzpah, a certain amount of risk-taking and a certain amount of ignorance, together with an attitude that failure is not an option.”
“We made 3-foot-long gummy worms,” Helfand said, “which brought us both orders and media attention. That brought in customers, and they brought in new customers. We use a model that says, ‘Have something that brings your customer come back and makes you a destination,’ and that’s been very important to our growth. I also say that having your business and growing your business and taking advantage of growth moments requires a certain amount of chutzpah, a certain amount of risk-taking and a certain amount of ignorance, together with an attitude that failure is not an option.”
Turning to the issue of understanding the customer base, Pinkard said, “One, you have to understand what interests them about you. Another is understanding their shopping pattern — who would buy the product? We thought at first it would be bartenders, but it turned out to be home users.”
Cafarelli recounted his experience of partnering with fashion subscription service Birchbox. “We needed to make the most of our sample merchandise to get a decent ROI on it,” he said. “By putting it in the hands of a sophisticated audience, we found a 40 percent likelihood that they would purchase — 50 percent if they use it.”
“Provide a ‘wow’ experience for your customers,” Helfand said in concluding the session. “Engage the customer on every level — vision, taste, sensation. Go beyond the competition. That’s what’s allowed us to grow.”
This story originally appeared in print as part of STORES Convention Daily on January 16, 2017. View the digital edition and see more highlights from Retail’s BIG Show 2017.