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If you find a new, small business without a super niche and some kind of uber-nuanced element to it, you’re likely looking at an all-in-one corporate chain.
Today, businesses specializing in something very specific are attractive to mainstream consumers looking for something more in their less. StickPop is one of those businesses. Cupcake, meatball, PBJ and macaroni cheese stand-alone shops abound. So do specialty paper shops, wool and yarn shops and boutiques that carry items where a hip designer has simply put a bird on a collection of reclaimed wood pieces.
The TV show Portlandia parodies and celebrates this kind of consumer demand. Popular niche markets may be amusing, but they are more than a trend with these demanding buyers.
Twenty years ago consumers weren’t buying perfectly crafted balls of cake on a stick. Today, we see incarnations of the delectable bite-sized petite dessert treat behind the display windows of darling cafes, and even Starbucks.
I spoke with StickPop founders, Jacki Caponigro, the baker, and Christy Nyberg, the marketer the week they transitioned from being an online delivery shop to opening a brick-and-mortar store in New York City.
You’re not the cake pops many people know from Starbucks. Is the cake-pop-ownership confusion good or bad?
We actually were making them for several months before we saw there was something similar being sold in Starbucks. It was scary at first for us to see our product elsewhere. But being part of a niche market with other players has helped better expose us to the market.
We were able to sample and learn how to be better by looking at our competitors. It saved us lots of time. We were able to improve, and remove what we felt didn’t work. We didn’t have to educate the public about what a cake pop was. We turned that scary reality into a positive. It helped us realize who we are and who we don’t want to be.
What do you want to be and not be?
We would rather be a business that specializes and make a high-quality item. Cake pops are one of many things Starbucks sells, so taste and freshness can more easily be compromised. We tasted the cake pops of other companies and found a sameness. So we focused on creating a taste, a flavor variety, a presentation of our own, establishing a standard we felt was the best in the industry.
We don’t keep ours on the shelf as long as our competitors. We want fresh. Our stick is wider, so it feels like a more substantial treat. We put a lot into our presentation, too. That really made it ours. Being small, it’s easier to maintain the quality—we’re not producing the quantities our competitors are. This makes it easier for us to keep our customers happy.
Freshness aside, why should consumers buy StickPops over the competition?
We appeal to customers who are focused on taste rather than decoration. We’ve remained true to our menu of flavors. While we do love adding beautiful or fun touches and we want the pops to look great, we believe food is to eat more than to look at.
One key to competition is knowing where it’s coming from, so we did conduct our own market research by ordering pops from a few companies and even buying the Bakepop Cakepop maker. You have to know what’s out there and view your product and marketplace as your customers do.
Why do you think people are so attracted to this kind of niche purchasing?
It seems that the common thread with niche products is a response to one-stop shopping, big box stores or predictable entertainment. There’s a growing momentum around supporting small businesses.
People want to get maximum quality out of the dollars they spend. Owning a small business opened our eyes to wanting to work with and buy from other small businesses. [Our store is] located on a block full of other small, niche companies run by business owners who are so supportive and helpful.
How does an entrepreneur determine if they have a viable niche product the public will respond to?
Certain things just appeal to certain people. As a basic guideline, success is probably largely driven by passion for the product. It doesn’t hurt to get a healthy reality check from sample markets—even if that means starting with friends and family.
When our orders started to come from people we didn’t know, we felt good. When those people re-ordered again and again, we felt great.
It is a big move to go from online sales to having a store? How else are you expanding?
We’ve existed only online until now. We need to make sure our walk-in customers get great service and pops they want more of, while continuing to build our web business.
In the long run, we’d like to expand by opening other locations and continuing to develop our relationships with event and wedding planners. We have a few products that are ideal for wholesale, like our dough kits. We think they’ll become more marketable as our brand grows.
Niche products tend to be more expensive than they should be. How did you price StickPops?
This required a bit of market research, along with calculating our costs per pop. We jumped into the market on the low end, but that may have benefited us. People were willing to take a risk on a new product and company.
We started way under price at $1.75 when we were refining the size of the pop and calculating cost. We didn’t have it down yet with materials and packaging. We raised it to $2.50 a pop. Now, with the store opening, it is $3. A lot of work and time goes into each bite.
Are you looking for investors or managing this for now out of pocket?
We’ve invested our own money because we want to maintain control. Building out a store has been our biggest investment. Right now, we don’t want investors. We’re being cautious. Hiring a bookkeeper helped us a lot.
We’ve tried to cover our basic costs (rent and health care), so if no one walked into the door we can stay afloat for a few months. We have no idea how to forecast walk-in traffic. There is no great model unless you are a Starbucks.
We’ve lightly invested in PR and have leveraged relationships where we realistically know we can’t do something ourselves. It’s about return on investment. Participating with flash-sale sites didn’t work for us. As an online store, there was no up-sale opportunity or much opportunity for repeat sales.
Where do you hope to be in five years?
We have our sights set on being a destination for visitors to New York, as well a place New Yorkers visit again and again. Our seasonal and specialty flavors keep us on our toes for now and offer ample opportunity for creativity and fun days in the kitchen. More immediately, we want to celebrate weekends with a breakfast box of pops—we’re thinking cinnamon bun, oatmeal raisin and blueberry muffin pops.
What has been the most niche item you’ve ever seen in the consumer marketplace? What niche product does your business sell? Is there such a thing as too niche?