Aisle 24 Enjoying a Category unto itself in Canada
By Meline Beach
It’s called micro-markets and they’re starting to pop up everywhere.
A CONCEPT BETWEEN VENDING MACHINES and convenience stores, micro-markets appeal to tech savvy, on-the-go consumers who seek speed and convenience, and are comfortable with self-service.
Aisle 24 is a Canadian success story, co-founded in 2015 by husband-and-wife team, John Douang and Marie Yong. Their story starts with humble beginnings based on an article and a casual conversation at the dinner table. An article on advancements in vending technology and automation caught Douang’s attention and subsequent focus on grocery vending services and a highly customized vending machine that could dispense fragile grocery products.
“After months of late nights, we had a business plan and sought out family members for an initial investment, which then led to the first iteration of our business,” says Douang, co-founder and CEO of Aisle 24. “To much success, the vending business was doing well as we expanded into apartments and condominiums throughout the Greater Toronto Area.”
Within a few months, Douang was approached to design a unique concept for a new student residence and culinary arts centre at Centennial College in Scarborough. They met with the owners and developers of the property when the pitched the concept of a cashierless, staff-less, 24/7 convenience store that offers customers easy access to fresh and convenient food, beverages and other essentials.
“They loved the concept, wrote a cheque for $25,000 and off we went to build Canada’s first cashierless, staffless convenience/grocery store.” Douang adds, “We launched this location in September of 2016 and, over the next several years, expanded across the GTA. In 2018, we, along with our investor Wes Hall, who’s the newest dragon on CBC’s Dragon’s Den, decided to look at national expansion with a franchising business model.”
With a footprint of 300 to 1,800 sq. ft, Aisle 24 is best suited in both community and commercial markets (larger size) and residential spaces, such as condominiums, apartment buildings and university and college campuses.
Together, Douang and Yong are dominating the micro-market category with nine locations in Ontario and Quebec, and over 40 in queue to be launched over the next year. Franchised locations are expected to follow corporate-driven quality standards and guidelines in an effort to maintain a consistent, positive experience, with checks and balances in place.
“Our goal is to be at 200 locations over the next several years across Canada,” says Douang.
Global customer-centric powerhouse Amazon is another player in the micro market category with its new Amazon Go store. The e-commerce company currently has over 20 Amazon Go locations in the U.S., each with a footprint range of about 450 to 2,700 sq. ft. in the front of house. Amazon Go customers need an Amazon account and the free Amazon shopping app to appreciate the value of the store’s Just Walk Out technology. Anything a shopper takes off the shelf is automatically added to their virtual cart. Anything they put back on the shelf comes out of their virtual cart. When the shopper exits the gates at Amazon Go, their card associated with their entry method is charged and later, they will receive a receipt. With Just Walk Out Shopping, shoppers just walk out! No lines, no checkout.
Although cashierless, Amazon Go locations do have staff on site to greet customers, restock shelves, answer questions and make product recommendations.
“Our business model is distinctly different than Amazon Go, in that it is actually staffless, relying on technology to take over many manual aspects of running a retail store,” says Douang.
“Security and integrity of the location is of utmost importance, but it also needs to be balanced with the customer experience,” says Douang. “We’ve upgraded our security systems so there is real-time tracking with our camera systems and point of sale, but the first step in security is our mobile app.”
Douang is referring to the fact that customers need to download the app and create an account first in order to access the store. Part of this process requires a selfie photo to be taken, and a credit card linked to the customer’s account.
“In this way, we know who is coming and what they are doing in our stores and our systems will allow us to suspend users who don’t follow our community guidelines,” says Douang. “Using smart technology and digital displays, we’re able to communicate directly with our customers in notifying them of various promotions to help drive sales.”
In terms of inventory management, each Aisle 24 location is replenished, cleaned, disinfected and re-merchandised regularly throughout the week either by corporate staff for corporately owned stores, or by the franchisee in franchised locations. Inventory is tracked through the store’s POS systems and delivered through Sobey’s Wholesale nationally, and smaller distribution upstarts like FreshSpoke, for more locally-sourced products.
“Retail is changing and companies need to think about how the customer experience needs to change to meet the expectations of a digitally experienced population,” says Douang.
In addition to applying innovative technology, Douang also emphasizes the importance of product selection and supporting local and small business as well. He and his wife consider several factors in choosing product, including age and ethnic demographic data – each community is a little different with unique customer characteristics. For instance, grab and go items sell best in student residences, such as frozen pizza, pre-made meals, and ramen noodles, whereas stores located in communities consisting of young professionals and young families, freshly prepared products in larger sizes are more appealing. Its FEAST branded foodservice menu features a variety of premium salads and hearty sandwiches, including roasted chicken and red peppers, roast beef, roasted vegetable and herb-roasted chicken and coleslaw – at competitive c-store pricing. Beyond food, Aisle 24 also sells electronic accessories, cleaning materials and personal hygiene products.
The company also recently launched a “support local” initiative to include more locally sourced and manufactured products from smaller brands that may not have the reach into larger grocery formatted stores.
“We hit a sweet spot with our offering as many communities rely on options closer to home but don’t have great choices,” says Douang. “We’ve also received some special requests for products we should be carrying – and so we appreciate every chance to improve.”
Though the store is staffless, Douang believes that connecting and engaging with the local community and providing the best overall experience is what will drive profitability and long-term business sustainability.
Meline Beach is a Toronto-based communications practitioner and frequent contributor to Convenience & Carwash Canada. In addition to freelance writing, Meline provides communications and public relations support to businesses across Canada. She can be reached at www.mlbcomms.ca