The CupcakeStop started with its first gourmet mobile truck in New York in the summer of 2009 and in November we reached a major milestone when we opened our first kiosk at Staten Island Mall. We’ve been able to grow during the recession and the current economic malaise by focusing our attention — and financial resources — on creating buzz to build our brand name.
This year is turning out to be much stronger than 2010, partly because of investments we made in advertising. Our brand is becoming more popular and we’re seeing lots of foot traffic at the kiosk. Sales are up 24 percent. Targeting high-end retail space, like our location at the General Growth Properties mall on Staten Island, is going to be the company’s path going forward. We are currently looking at three more mall locations in 2012.
Cupcakes are a fun little treat that just about everyone enjoys. We bake everything from scratch — that’s our tag line. Because the price point is on the lower end, we haven’t felt much of a negative economic impact like luxury goods, such as jewelry. I was able to get it running fairly easily and grow it quickly. Last year, we added a second truck, partnering with a Philadelphia cheese steak company called Phil’s. They’re the savory and CupcakeStop is the sweet. The idea is to have two fantastic brands on one truck — we think that will be a very franchiseable model.
A lot of the expansion has come through social media — we have 17,000 followers on Twitter and 5,800 friends on Facebook. Social networking has been our number one source of advertising since we started. We’re able to use it to stay in constant contact with our customers. We tell our customers about our new flavors, such as the M&M cupcakes, and where our trucks are. They respond immediately. Twenty minutes after they buy a cupcake, they are posting pictures of themselves eating it.
But for us that wasn’t enough. We took the big leap to put profits into advertising, hiring an expensive PR company. That investment paid off.
We were on the “Food Feuds” on the Food Network. We did several events, including one with the Ford Motor Company where we gave away cupcakes with the Ford logo on it to promote a new vehicle. In another event, cast members from the AMC network TV show “The Walking Dead” gave away our cupcakes.
In this uncertain economy, the decision to make that investment wasn’t easy.
Our thinking is that in order to get yourself known, you’ve got to pay the price. Still, you have to weigh the value of what you’re paying against what you expect to get back. What type of opportunities is it bringing?
The proof to us was when General Growth Properties approached us about opening the kiosk in the Staten Island Mall. They said they love our brand and wanted to work with us.
That was what we had been waiting for.
Richard Kallman is chief executive of CupcakeStop, based in Montclair, N.J.