‘It’s been crazy but it’s given London independents a lifeline’: JP Then on The Crosstown Collective
While many businesses have tried to ride out the lockdown, others have taken drastic measures to reimagine their business for a very different world once we reemerge. Crosstown has 21 locations across London, which all closed due to the lockdown, and although stores are now reopening (for on-demand delivery or collection), it made a pivot early on that could have greater significance for the business than the return of retail. We talk to founder JP Then about how Crosstown came to be in a space with Ocado, his hopes for post-COVID, and his advice for other SME founders during the crisis.
How has the lockdown impacted the business?
JP Then, co-founder of Crosstown.
We’re going through the same as any hospitality businesses at the moment, which is fighting for survival. There's no other way to put it. We've seen retail revenues drop to zero. And that's extremely difficult to deal with because we had a team of 140 people at the start of March, and we've had to make some difficult calls, which hasn’t been easy. The concern that everyone has in the sector is they can't forecast anything at the moment. All we can agree on is that it's very uncertain. The best advice I could give to any operator at the moment is to make sure you're nimble and willing to pivot. There are no rules; you've got to be able to adapt and try things out. It's adapt or stay stagnant and die. That's the situation the hospitality sector is facing. Pre-COVID, our business was around 75% retail, 22% online and events, and then about 3% wholesale. When retail and wholesale and events goes to zero, what are you left with? Online. We've just had to sweat this channel as hard as we can.
So how have you adapted? Tell us about The Crosstown Collective and how you came up with that idea?
The Collective is an alliance between some of London’s most respected independent food brands including The Estate Dairy, Millers Bespoke Bakery, St John Wines, Caravan Coffee Roasters and several other independent suppliers.
The Crosstown Collective is a collaboration between some of London's most respected independent operators to create curated food boxes that we deliver direct-to-consumer to peoples homes. Our suppliers usually provide the restaurants, cafes, and hotels, throughout London and beyond. Millers Bespoke Bakery provides The Ivy, The Wolseley, Five Guys, GBK and Byron. Many people have already eaten their products without knowing it. The Estate Dairy is the same, it supplies quality independent cafes and restaurants, including us, with milk, butter and eggs. And our tap was just turned off, right? We had to close our stores, and those guys had no wholesale accounts. So we thought, what can we leverage? Well, we've got the tech because we've got an existing online ordering platform powered by Slerp. We've got logistics, we've got access to the supply chain, and we've got the production units. We've also got the social following to reach customers quickly and tap into an already loyal audience.
“We put up the roller door at the bakery, shot some product on my iPhone and had the website up within 24 hours”
It was then about what - what do we want to put in this box? Well, what do people want to eat? Its fruit, veg, bread, dairy products, and then a sweet treat to give them a bright moment. We got together with the guys from The Estate Dairy and Miller's Bakery, and we didn't work out any detailed margins that day, we just wanted to get this live and some revenue back flowing. We got our products together, put up the roller door at the bakery, shot some product on the concrete floor on my iPhone and had the website page up within 24 hours. It was really a feeling of react or die. We thought: we've got all the ingredients to make this a success, we've just got to get it out there and see what the reaction is. We went live on 23rd March and we ended becoming this mini-food hub, somehow competing with Ocado. It's been crazy, but it's given ourselves and other local independent businesses a lifeline.
What gave you the confidence that you could make this a success?
The Collective’s vegan craft box.
I head up Crosstown alongside Adam, but then I also have a tech company called Slerp, which is an online ordering e-commerce platform. Slerp provides an ordering software to businesses to sell directly to consumers off their own website. It's like a hybrid between Shopify and Deliveroo, and it enables businesses to offer on-demand ordering online yet with the control of a white-label d2c solution. It's received 20-25x revenue growth in the space of a couple of months, because all of a sudden, it's become one of the only relevant tools that restaurants and hospitality operators can use to generate new revenue. And I'm so happy and relieved that we invested into creating this to not only support Crosstown because it's basically providing 100% of our revenue at the moment, but it's also supporting hundreds of other operators from Michelin star restaurants to local fishmongers and deli shops – we are all struggling at the moment.
“We’ve seen so much support for buying local, and I hope that continues”
It's been an unexpected silver lining to be able to contribute positively to this dire situation. We've seen so much support for buying independent and local, and I hope that continues because every SME business is going to need it.
Is the surprising nature of a doughnut company delivering fresh fruit and vegetables part of the appeal?
It wasn't the plan, but I think it is. In each delivery box, we include a letter that mentions how odd it is to be buying fruit and vegetables from us. It's not what you’d expect. But I guess within a few weeks The Collective has almost got its own identity now and it will continue to evolve. We started with two boxes, and now we've got many more. We're always looking to try and keep it interesting for people, who knows what the next few months will look like.
Brick Lane is one of three locations that have reopened for online delivery and collection.
What changes to the business landscape do you think we'll see as we emerge from lockdown?
Collaboration comes to mind. Whether that's with other operators in your space, like The Collective or outside your industry. The more you can leverage expertise or insight from other companies going through the same thing the better. Many businesses are too siloed and stuck in their ways in many respects. So I hope that increased collaboration is here to stay. Where I think there needs to be a huge shift is the relationship between a landlord and a tenant. While we're under lockdown with little revenue, many landlords are still expecting full rents, and it's a challenge for us. That relationship has always been a tension point as the power has significantly been with the landlord, and so I hope landlords and tenants can work closer together in the future. But I think that's a big ask. Much has to change structurally for that to work.
What advice would you give other founders during the crisis?
Reacting quickly to constraints is tough. But businesses have to wake up and realise they've got to do some things differently. And when you don't have your retail outlets, or your restaurants or whatever business you've got, you've got to think outside the box. You can't constrain yourself with preconceptions of how you entered an industry with a certain brand and identity and with a particular offer and feel you must stick to that. You've got to adjust your mindset. It's survival now. That’s from a hospitality point of view, but the same is going on in retail, and that includes non-food items. Fashion labels, beauty brands, whatever it is you're selling, your four-wall economics of bricks and mortar stores, get rid of it, it doesn't work anymore. Don't think it's going to go back to normal in a few weeks. It's not. People's behaviours have changed.
“If you haven’t got an omni-channel approach, I want to shake you!”
So if you haven't got an omni-channel approach, and you're not thinking online, I want to shake you because you should be and there are all the tools out there for you to do it. Slerp is one of several that has a direct link to your customer and real revenue. There is no barrier for you in adopting those things. And there's plenty of people out there who can help you; you just have to ask. And that's something else that people should try and shake off is any pride: accept that it's desperate, accept that you need to call on people that have better or different expertise than you, accept that you're not going to have all the answers. And once you acknowledge those things, you're in a much stronger position to react. It's difficult to get in that mindset quickly. But I feel it’s super important. That's the main message I send to other businesses who haven't already adopted a similar mindset.
Challenger Brands Locked Down is a series of interviews with the leaders of some of our favourite SME challenger brands adapting to the current crisis.
