Crosstown has changed dramatically over the past year. Since launching in 2014, the company has grown into a successful chain of doughnut shops celebrated by celebrity gourmets like Nigella Lawson. However, when Covid-19 forced the UK into lockdown, Crosstown’s co-founders had to think fast or risk losing everything they’d built.
Crosstown is not alone in experiencing the downsides of the coronavirus crisis. The UK hospitality industry is almost unrecognisable from what it was 12 months ago after a string of social distancing measures forced restaurants and other hospitality venues to close,.
The UK hospitality industry is losing up to £200m as a result of the Covid-19 pandemic, according to CGA and UKHospitality. 2020 saw an average of 48 shops, restaurants and leisure venues close every day in the UK, according to research by PwC and the Local Data Company. However, while the past year has been tough for the industry, it has also seen a flurry of innovation.
From launching their own at-home dinner kits, to hosting online cookery lessons restaurants, a number of creative solutions have emerged from adversity.
Crosstown is one of the companies approaching the pandemic as an opportunity to remake itself. The company is known for its popular sourdough doughnuts, homemade cookies and ice cream. However, as well as serving up sweet treats, the company has found itself at the forefront of omni-channel retail on the London food scene.
Like numerous other retailers, Crosstown had to adapt quickly to a rapidly changing retail landscape over the past 12 months, with lockdown measures forcing its 21 London stores to close their doors in the first UK lockdown. These drastic measures were needed to stay afloat. Crosstown launched next-day delivery nationwide in July 2020. It has since then pivoted its business model to one with digital services at its core.
“2020 was the most progressive year in our company history,” Crosstown co-founder JP Then tells Verdict. “Like everyone else in March, we were desperate to save our business and it was terribly bleak. But we forced ourselves to execute on the many things we wanted to do with our business and had already planned, and simply accelerated that progress. It just crystallised so much as there was no downside – give it a shot, or lose the business. That reality really forces you to make calls and we simply put our head down to tackle it head on.”
For brands such as Crosstown, which started life as a stall in London’s Leather Lane market, online deliveries were until recently an afterthought, with focus firmly on in-store offerings. Covid-19 forced its leadership to reconsider its original approach and embrace a strong online presence and direct-to-consumer deliveries.
“People now expect to be able to order from their favourite establishments whenever, wherever and on whatever platform comes to hand first,” says Then. “This has rapidly changed operators’ ordering process beyond traditional marketplaces or delivery models. It has accelerated the need for the hospitality sector to have an omnichannel approach to their business. Direct-to-consumer online ordering is no longer optional – it forms a pillar of the business plan and is a very exciting growth channel with huge potential.
“There has been a mentality shift that online sales – which have been predominantly driven through marketplaces – was always seen as the ‘incremental revenue’ that didn’t actually make us any money – it’s like this annoying child on the P&L that just doesn’t quite contribute like it’s bricks and mortar siblings. This perception and attitude has changed. Online ordering is now a hygiene factor in your F&B setup and having a d2c solution is pivotal to this.”
Consequently, the company has focused heavily on using different delivery services. Last month, Crosstown announced it was expanding into the ‘dark retail’ model with the launch of decentralised hubs for on-demand deliveries and collections in Cambridge and Walthamstow.
According to Crosstown, its direct-to-consumer online ordering revenues increased by 600% in 2020 compared with 2019.
Fortunately, the company’s leadership was no stranger to the importance of online sales, with Then having launched Slerp in 2019. Referring to itself as “Shopify for premium bricks and mortar restaurants”, Slerp provides online ordering solutions to help brands coordinate orders and deliveries.
With the likes of Deliveroo and Uber Eats dominating the food delivery market, Slerp offers an alternative for smaller businesses, by offering lower commission fees.
“We were already digitally inclined and had a strong d2c presence thanks to Slerp, so this significantly helped us as the channel mix of sales shifted from bricks and mortar to online – we started delivering further and eventually nationally,” explains Then. “I still feel like I haven’t had a moment to properly reflect on the past 12 months, but I feel Crosstown is stronger than ever and has more opportunities than ever.”
“Slerp only launched to market at the end of 2019 but is already working with hundreds of brands enabling d2c ecommerce and order management specifically for the hospitality sector. As a sector, we have a lot of tailored needs so other platforms just don’t fit the bill. A lot of deep thinking has gone into our approach and product. We have the saying that we are ‘built by operators for operators’ – because it’s true and the foundation of how we started.”
As well as expanding its online delivery services, Crosstown has also partnered with Millers Bespoke Bakery and The Estate Dairy to launch the Crosstown Collective. The three businesses collaborated to create retail food boxes available for delivery across London.
Then explained that the initiative came about during a “very difficult period” which led the retailers to pool their resources.
“The Crosstown Collective was all about playing to our strengths in the most challenging time,” says Then. “The claim can go to Adam [Wills], my business partner at Crosstown, who came up with the idea to pool together our friends in the sector to provide Crosstown Collective food boxes and deliver to people. We had the infrastructure, the goods, the logistics, the online presence, and we knew we could react very fast. It was strange to think that supermarket shelves were empty yet we had access to all this amazing produce.
“Within 36 hours we had The Crosstown Collective formed and live online. I remember standing on a ladder in the bakery laying out all the goods and taking photos of this fruit, veg, eggs, bread on my phone to get the images online. I remember thinking ‘what the hell are we doing?’ But the online orders started flowing and they didn’t stop. It was never part of the plan to be a ‘mini-ocado’ for a few months but that’s how these things often go – it got us through a very difficult period and is one of the moments I will never forget.”
Then explains that the pandemic has highlighted that ecommerce is no longer considered a nice-to-have extra for businesses, but a must-have.
“Ecommerce is not a small ‘bolt-on’ but is now a core pillar to growing a dynamic and relevant business. Slerp is a complementary solution to the marketplace platforms. Profitability is all about enhancing reach and executing on a model that has diversified revenue streams. We feel we are enabling that at Slerp through our ecommerce and order management solutions.”
For businesses embarking on the digitisation journey, Then encourages them to embrace the current uncertainty.
“Be bold, listen to your customers,” he concludes. “It might mean ripping up your rule book but this seems like a better outcome than lettings things fail. It is not easy out there, and we know for certain that the future is uncertain. Use this to your advantage to try something new and learn. It may shape how you view your business in a different light, and it may just be brighter.”