Brought to you by Retailinsider.com and PCMS
The Name: Hubbub
The Place: Islington but if they have their way all over the place in five year’s time
The Story: Marisa Leaf was all set to save the world, working long and hard as a human rights lawyer. Trouble was the hours were so long and hard that by the time she did trudge home the only shops left open were horrid supermarkets. Enough was enough.
She stopped working weekends? No. She jacked the legal thing in, decided the little independent food shops she missed shopping in were worth supporting and started asking around like-minded neighbours if they might use a service that delivered such goods to their door.
And the answer was… Absolutely. And the ‘Ocado for independent shops’ was born. Leaf started talking to shops in the Islington area and found some had tried this already but with limited success.
Pourquoi?A questions of scale and logistics. The customer does not want eight separate deliveries, and if each shop has to have the e-commerce site, the customer services staff, the van and driver etcetera then it quickly turns into a loss making exercise.
So a win win situation if ever I saw one. Precisely. Shops make a profit on every sale via Hubbub and generate extra sales they would not normally make. And in a result, which even Marisa Leaf did not foresee, the turnover in the actual shops has gone up too. People waltz in saying ‘I’m a Hubbub customer and now I want to meet you, purveyor of my favourite sausages’. Or something like that. And it’s all very neighbourhood-ish and lovely.
Brass tacks now please. What’s the commission Hubbub charges? Not for the likes of you to know. But we are assured no one has left because they are not making money. There is only one commission rate across the board and it is small. Leaf says the business is not profitable yet, but this is because she can’t be waiting to grow organically. She wants Hubbub to be big, bigger, biggest right now.
Well how big is it exactly? There are currently 22 suppliers live on the site. Leaf is pitching to foodie shops all the time and of course shops approach her too. Delivery hubs are not divided by borough lines but loosely speaking most of Islington, Camden, Hackney and most of Haringey have their own catchment area. Oh and Southwark.
Good Lord. South of the river? Oh yes. Hubbub has a huge customer base in Dulwich and South Londoners tired of fighting through tourists to get round Borough Market. But beware… each hub operates very tightly with one driver/van and one circle of shops. Do not ask for Hackney bread if you live in Southwark. The point here is to shop local not have your goods driven half way across London.
No plans to alter that? Definitely not. Any change to the rule means probably having a warehouse and storing stock. Leaf says gleefully ‘we are a retail business that holds no stock’ and that ain’t changing.
Tell me about the customer base. Rich young professionals no doubt? Careful about making too many assumptions on this. These shops welcome the whole of the community through their doors. What the customers do have in common is a lack of time rather than an abundance of lucre although Leaf does concede that time poor means probably two incomes so money not likely to be in very short supply. It’s mainly either couples or families and they’re mostly buying their day to day food shopping. Spend can be around £25 for a couple to £75 for a family and there are several thousand customers.
And they are buying? ‘Anything the supermarkets don’t do well’. Meats, fish, cheese and bread. Anything where a special relationship on a small scale, and artisan skills are critical. Anything from tiny smokehouses to bakeries under railway arches.
So I’m thinking… this is a good idea. Anyone else doing it? Glad you’ve asked. Answer – no. There was one copycat business in Clapham but it went bust. Their research indicates the real competitor is online supermarkets.
And what’s the tactic for really challenging them? Well not through big private equity investments that’s for sure. Although Leaf says ‘never say never’ she prefers using private investors and has had three rounds of financing that way. She says customers approach her all the time bringing a lot more than just money.
I presume customer number one is Marisa Leaf. Ah, that’s a tricky one. She lives in Kensal Rise now and guess what, Hubbub don’t deliver there. But she and her colleagues use Hubbub every day for lunch and do a daily lunch Tweet – thereby breaking the time honoured rule of ‘never Tweet what you eat’.
They’re forgiven. What does it take for a new delivery hub to be added – Kensal Rise for example? In basic terms ‘1,000 people is the starting point and then it’s yours in a month’. The biggest investment in Hubbub is the web platform, custom built from scratch by two full time developers. Adding a new shop, van, area or customers is done in the blink of an eye and then they send in the heavies.
Who?The brand ambassadors – trained up in all the products, they hand out leaflets, knock doors and put the word about. And that’s pretty much all the marketing Hubbub does. Although they do have a genius way of nabbing new inhabitants to one of their delivery hubs.
Which is?They have started building a hamper part of the site that you can bu y for someone newly arrived in the area. With one swoop they have a housewarming present and an introduction to all the local food shops – and Hubbub have another customer. It’s very popular. And they do new baby bundles too – all devised by the official doula for Hackney.
Get ‘em started young. It’s the way forward.