Fitzroyalty

Hyperlocal news about Melbourne's first suburb: Fitzroy 3065

I didn’t think you had a business plan

| 3 Comments

In November last year I got an email from some people starting something called the Fitzroy Collective, which was to be an online store that could be used and shared by multiple businesses. Here’s their email:

First of all, we must say we’ve been reading you blog for a long time and we love what you’re doing.

We’ve been living in Fitzroy for about 3 years now and the closing down of so many shops has made us sad. That’s why we recently came up with an idea about how to help local business and maybe change this reality.

We are running the project from our own pockets and so far we have 8 shops on board. We would love to say we have the support of the local business association, but I think this might not be the case as our ideas are slightly different (both in terms of technology and age bracket).

We’ve attached the proposal so you can have a better understanding about the project. In very few words it involves an online shop with multiple stores, single checkout and single delivery (by bicycle if you live locally).

If you like the idea and have some spare time it would be great to have a coffee or two and maybe get some feedback? We really value your opinion about Fitzroy.

We hope we can hear from you soon.

 I replied as kindly as I could manage:

Thanks for your email. I had seen cryptic references to your project but no context. There’s a lot of new things being promoted at the moment, eg http://fitzroygsd.com/.

You’ve probably seen from what I write that I’m cynical about retailing and commercialism.

Your idea is innovative, but I just can’t see it working. I’d like to be proven wrong though. It would be good if things like this did work.

I don’t have a business degree but I can’t see how a business plan could show that it is possible to make offering this service a viable business in itself. It’s useful, but that doesn’t make it viable. The more savvy operators may have an online store already and the less savvy just don’t get it.

So you’ve tried talking to the Smith St Business Association? I’m not surprised you got little satisfaction from them. They’re hopeless in general and particularly so about anything online.

I’ve also heard that a Brunswick St association is being started, but there’s nothing to see for it yet.

If I understand the retail identity of Fitzroy correctly, the biggest audience is from suburban tourists who come on the weekends to shop. There’s more of them than there are locals. So appealing to locals may not be so important. I wonder how strong the brand Fitzroy is to these shoppers?

I do genuinely wish you well and I will be watching to see how it works. Sorry but I don’t do free meetings and hand out more free advice than is in this email. I’m a freelancer and need to be paid for my time and expertise.

best wishes

They responded with a much longer explanation of their concept that made me feel even more sceptical:

Thanks for taking the time to respond to our email. It is much appreciated especially considering the number of emails you might receive about local events, projects, etc.

It is as stated a project to promote small business online. The bicycle delivery for locals is more a talking point and also a way to ensure we do our best to look after our local friends as their support in many ways will help to spread the word outside the local area.

Our target audience is mainly interstate tourists and suburban tourists, as well as countryside/regional folks. They are the core people who shop here and don’t necessarily have access to similar shops where they live, thus why we want to provide a convenient way for them to shop small business rather than supporting the larger players in the market, that have shareholders who benefit little more than themselves.

We have seen the retail landscape change over the last few years and have been saddened by the steady decline in independent shops. Part of this reason is that most business owners struggle with the adoption of new technologies. We believe the retail industry has no choice but to embrace online shopping.

So after much pondering, with the added benefit of understanding how the internet fundamentally works, it came down to a few things that we believe can help to change the slow demise of the retail sector.

1. Being easily found online
2. Online shopping convenience
3. A centralised delivery model

We also believe the local independent shops have some key advantages over online stores and large corporations: they provide an experience, belong to a community and have a permanent, unique showcase. So it really comes down to use a unique key phrase for those of us who have memory issues to easily find the sites online. Creating a showcase of each shop to help tell their story; backlinking for local SEO; single checkout and single delivery for convenience to the end user.

Coming from a long background in IT and from running our own online store, we do think that for retail business to survive, shops need to start thinking of their physical store as an extension of our online store, rather than the other way around. Their shop becomes their gallery and their authenticity, which from our experience is very hard to replicate purely online. If the model can provide the convenience, then the tables may just turn. Time will be only way to tell.

On a different note, I do understand your point of no longer volunteering your services without charge. I noted that you honourably offered your time to help the Fitzroy Historical Society and the Fitzroy Residents Association to no avail. It is a pity when the skills you have are not appreciated until you charge money for it. We’ve been there.

Lastly, you are entirely correct about the smithstreet.org.au issue. It is just a lack of understanding of DNS. I did my best to explain that as well without much success. Apparently the Police are looking after the ‘issue’ now.

Apologies for the delay in getting back to you. I hope it didn’t come across the wrong way. It was more a case of ensuring we took the time to write a decent response.

Hopefully see you around the traps one of these days. :)

The idea was interesting in theory but also an obvious failure. The only profit to be made in becoming an intermediary like this is by squeezing suppliers, in this case the retailers. Unlike the supermarkets, who have made great profit from bullying suppliers from a position of strength, this communal online store had no power to bargain with. Their Facebook and Twitter have been silent since January. The dream didn’t last long.

3 comments

  1. These local trading associations are notoriously difficult to get anything done and Smith St isn’t unique.

    I once pitched a campaign for the Daylesford Business Assoc (I think that’s the name). As far as I know nothing happened.

    I was talking with a trader from South Melbourne who said their plan fell apart because the retailers couldn’t agree. I see some campaigns in St Kilda but not sure what the impact is.

    The Chapel Street Traders seems to be the one that with a regularly maintained website, advertising and interactive billboards. We’ve benefitted from it at SpinStar. They sent a photographer along when we opened and wrote a story. We’ve been featured in ads in the gay press. And on interactive billboards. As has Manu at Le Grand Cirque which closed after 4 months..

    That said it hasn’t overcome the retail woes of Chapel Street as reported in The Age this weekend.

    I say good luck to anyone who tries to help on this sort of project though I think the idea is a little misdirected.

    I also sense a resurgence on Brunswick Street with some of the new quality venues such as Stagger Lee et al but the problem is perhaps in that some businesses aren’t delivering what the public wants.

  2. I would imagine high rents make it hard too, especially for something new and organic to start up rather than big chains coming in. I think that’s why Smith St has had a decent boom, it might be inner city but that patch of Collingwood will never completely gentrify, all the restaurants in the last few years have blown Brunswick St well out of the competition.

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