First there was self-checkout. Then Amazon’s cashier-free Go stores. Now there’s ‘pay when you feel like it — we trust you.’
At Drug Store, a narrow, black-and-white-tiled store that opened this week in Manhattan’s Tribeca neighbourhood, there is no cashier or checkout counter. Anyone can walk in, grab a $10.83 activated-charcoal drink and leave.
But the beverages, typically sold online by the case by Dirty Lemon, a startup that runs the store, are not free. Dirty Lemon has made a bet that customers will pay the same way they order its pricey lemon-flavoured drinks for home delivery: by sending the company a text message.
In the store, customers are expected to text Dirty Lemon to say they have grabbed something. A representative will then text back with a link to enter their credit card information, adding, “Let us know if you need anything else.”
Zak Normandin, the company’s chief executive, said he was not worried that Drug Store’s honour system would encourage theft. “I do think a majority of people would feel very guilty for continuing to steal,” he said in a recent interview at the store.
When asked how much money Dirty Lemon was willing to lose to theft, Normandin demurred, noting that the company would write down any losses as sampling costs.
Founded in 2015, Dirty Lemon counts 100,000 customers, around half of whom order at least a case of six beverages each month. Its high prices, text-message ordering and beauty claims are helping it get attention in a business littered with new health-focused drink brands. Dirty Lemon’s “sleep tonic” contains magnesium, a “beauty elixir” drink features collagen, and an anti-aging drink contains rosewater.
The company is closing a round of venture capital funding from celebrities and investors, including Winklevoss Capital, Betaworks and the investment fund of YouTube stars Jake Paul and Cameron Dallas.
Normandin said his conviction in Dirty Lemon’s store was so strong that he had already made plans to open another one in New York and two more in other cities, all featuring a separate VIP lounge with a bar and special events. The company has shifted almost all of its US$4 million annual digital advertising budget into its retail stores.
Dirty Lemon is forging ahead into brick-and-mortar stores when many traditional retailers are closing locations and investing in digital marketing and e-commerce. But Normandin said his customers, who are mainly young women, were tired of digital marketing that constantly pushed them to buy things. Rather, he said, they seek unique in-person experiences.
“They want to actually be kind of immersed in a brand, and take it all in, and maybe take a picture,” he said.
Dirty Lemon’s Drug Store features a large, selfie-friendly mirror that reflects a wall of coolers and stark, black-and-white-striped penny tiles creeping across the high ceiling.
So-called immersive pop-up stores and museums, optimized for social media, have proliferated in recent years. This summer, visitors to Rosé Mansion in New York wandered 14 rooms of highly stylized Instagram-bait, sharing geotagged photos, GIFs and videos of bubble pits and cava fountains. This month, 29Rooms offers an equally Instagram-able “interactive fun house” in Brooklyn. The Museum of Ice Cream and Candytopia, both of them in New York and San Francisco, are comparably photogenic.
Normandin said his company’s plans went beyond lemon drinks and selfie mirrors to transforming the beverage industry’s distribution methods. The company aspires to “rebuild the infrastructure that has powered beverages since the 1800s,” he said.
That will take a lot of text messages.