Street Talk, iTalk, Talk N Fix
Street Talk RMU/kiosks: 375
iTalk RMUs: 65
Talk N Fix RMUs: 25
Geographical territory: US, Puerto Rico
Number of U.S. states: 36
Corporate Employees: 12
Warehouse: Miami, FL
HQ: Metuchen, NJ
Street Talk plans 2013: 75-100
iTalk plans 2013: 25-50
Talk N Fix plans 2013: 50-75
Mission: Street Talk is committed to bringing the best customer service experience possible to our customers; housing exceptional products/accessories in our premier locations; creating places where customers can come to find and discover anything they desire to enhance their cell phones, tablets and other handheld electronic devices. – David Ferber & Benjamin Smuk
Company Slogan: Anything but average.
Strength: Variety. You’ll find a unique and extensive selection that surpasses our competitors due to the fact our operators have the ability to source products from many different distributors. – David Ferber
Already the talk of the town, Street Talk plans to roll out an additional 200-plus locations this year. See how Benjamin Smuk and David Ferber are riding the wireless wave of success.
At the start of 2012, there were approximately six billion mobile subscriptions worldwide, 321.7 million in the U.S. alone, according to The International Telecommunication Union. For Street Talk, retailer and wholesaler of mobile accessories, headquartered in Metuchen, NJ, these numbers translate to one simple word: cha-ching! With a demographic that serves ten-year-olds to seniors, sales are adding up faster than texts amongst teens.
“The beauty of the product is, the cell phone is a necessity. There is not a person who doesn’t own one. It is such a wide range of people,” says David Ferber, president and co-owner of Street Talk, noting this wide range includes all genders and ethnicities. “In the common area, we appeal to the masses of people. We are gaining the impulse shopper,” he adds.
And the best part? These impulse shoppers cruise the common area with cellphones in hand 365 days a year, says Ferber. “Unlike a seasonal business that has a nice surge at the holidays, we still have that 30-50% surge, but it’s also consistent all year through. That’s very appealing for a retailer,” he says.
Both Ferber and Benjamin Smuk (who is the company’s vice-president and co-owner) entered the world of specialty retail at a young age. Smuk began the day he “was old enough to have a tax ID number” with an automobile accessory cart in the Staten Island Mall in Staten Island, NY in 1996, he says. Air fresheners, fog lights, key chains and cellphone holders that attached to air conditioning vents stocked the shelves. Cellphone holders were the top-producing item.
In a few short months, Smuk’s product assortment went from automobile to cell phone accessories. “I was the first cellphone accessory cart in any mall,” says Smuk. “There were cellphone service kiosks but not exclusive accessory carts. I would have been out of business if I had kept automobile accessories,” he says.
Smuk expanded the concept throughout the NJ/NY region, reaching a high of 70 RMUs in 2008, when a national competitor came on the scene. “At that point, my biggest concern was my existence in the business,” says Smuk. He knew the only way to survive was to take his company to the next level, and to do this he would need a partner, “with lots of experience and mall contacts throughout the USA,” says Smuk.
Ferber entered the specialty retail industry at the age of 19, opening the first kiosk at the World Trade Center in 1997 for NYS Collection Eyewear, a national specialty retailer of sunglasses. For over ten years, he helped grow the company, reaching over 1,000 locations and achieving the title of director of leasing before turning his attention to the mobile accessories market.
Smuk intentionally sought Ferber out for advice on a GGP deal Smuk was working on. “I knew he was a powerhouse in the industry,” says Smuk, “and I approached him at a trade show.” What started out as a friendly conversation became an official partnership in 2009.
“We started pounding the pavement and finding opportunities,” says Ferber. With Ferber’s ties to many major mall leasing development companies—Westfield Group, Simon Property Group, The Mills Corporation and so on—it wasn’t very difficult. Today, there are over 375 Street Talk locations.
Smuk and Ferber both know they could not have come all this way without the help of their amazing operators and some key personnel, like Michael Campbell, Director of Operations. “We call him the Iron Horse” says Ferber. “A business like ours could not flourish without dedicated people like Michael,” Smuk says.
Case in point
A typical Street Talk RMU is stocked with a myriad of mobile accessories for iPhones, iPads, iPods, Blackberrys, Droids and more. Customers will find cellphone cases, headphones, chargers, data cables, Bluetooth devices, headsets, and anything else to take a device on the go, keep it protected, user-friendly and charged.
Cellphone cases are the number one category. As for what the top selling patterns and colors are, it’s tough to say, says Ferber. “We need to talk overall,” he says, explaining there are thousands of styles. “And it’s not the same merchandise in every location. Every mall comes with a different demographic. We cater to the phones that are most dominant in that market. iPhone is not the most popular everywhere,” says Ferber, despite common perception. “There are so many phones on the market,” says Smuk, and “so much growth in the technology industry as a whole.”
For the majority of phones, especially the iPhone, hybrid cases sell particularly well, says Ferber. “They’re a blend of hard and soft material, making them durable and flexible. They offer protection and shock absorbency with a stylish look,” he says. In the past, flashy patterns topped the charts, but customers were sacrificing protection. This brings both together, says Ferber.
With the myriad of prints and materials to choose from, cases have become a fashion accessory. “People accessorize them in a way that reflects their personalities,” says Ferber.
Due to their fashionista draw and impulse price point, teens are a strong Street Talk demographic, often changing cases every few weeks, says Ferber. “They might not even be looking for a new case, but they are passing by, and for another $15-$20 bucks, why not?” says Ferber.
To make sure phones are always in operation, battery chargers are a regular sale. Especially popular today is, “having the back-up battery built right into the case. It doesn’t look or feel much different. It’s great for people on the go and that is what we are all about,” says Ferber.
Also trendy: large, over-the-ear headphones. “There is a huge resurgence. These can be really high-end, $300-$500, or extremely affordable, $20-$80,” says Ferber.
Multiple item sales are the norm. The average sale runs between $40-$50, says Ferber. With cases starting at only $15, they are typically bought in multiples, and screen protectors are easy add-ons, he says.
Street Talk’s displays are designed to be bright and eye-catching. “We emphasize the variety of colors and designs we have,” says Ferber. The goal is to shine the light—literally—on the maximum number of products and styles available. “In early 2012, we started to only use highly-efficient LED lights on all our new fixtures. They are brighter, last longer and do not give off the heat that other light sources do,” he says.
Street Talk sets itself apart from the competition in a number of ways. “Our major difference is our business model. In other words, retailers can purchase their products with the freedom of going to various approved wholesalers. With the exception of quality control, we are not restrictive, so they have the most control over their business,” says Ferber. By allowing retailers to order from a bevy of wholesalers, each specializing in a certain product, they can get “the best of everything,” he says.
Street Talk is designed to offer its operators “the absolute best prices in the market” when ordering directly from them, or the manufacturers and wholesalers they’ve aligned with and pre-negotiated pricing with, says Ferber.
“Wholesale pricing is typically dictated by ordering volume. What we’ve done is given an operator with one cart, the opportunity to get the same pricing as an operator with 20 carts, since they fall under the Street Talk umbrella,” says Ferber.
With aggressive pricing, retailers are able to have higher markups, leading to higher profit margins. “In a typical franchise, markups are three times the cost—we do seven times,” says Smuk. “We are not like a franchise company. Retailers make money, we make money,” he says. “We have over 99% success in our locations,” says Smuk.
Street Talk’s business model also allows them to commit to multi-property deals with developers, regardless of operator availability. If an operator is not available, a corporate location is created that can later be turned over to a retailer, says Smuk.
“In other words, if we don’t have an operator, we stand behind the unit. One way or another, units are open and successful,” says Ferber.
In most cases, operators are happily waiting in the wings for additional locations. The average Street Talk retailer manages multiple units. “We have one retailer with approximately 65 locations,” says Smuk.
Bigger units, bigger plans
The Street Talk concept was born on a cart and from an investment and planning standpoint, these roots will continue to flourish. But in many centers today, kiosks are starting to play an important role. “One of the biggest obstacles we face as a cell accessory retailer is having enough space to display our products. There are simply so many phones with such a large variety of accessories for each of them. This is why over the past two to three years, we have seen a huge jump from cell accessory carts to kiosks. Having a kiosk not only allows us to better showcase our products and create our own identity, but allows us to have more space to display the large inventory we need to carry,” says Ferber. There are approximately 65 kiosks in operation today, with more in the works.
Growth also comes in the form of new concepts. Street Talk recently launched two divisions: iTalk and Talk N Fix. Talk N Fix was launched in response to customer requests at existing Street Talk locations. Street Talk customers were bringing up technical problems to our employees, says Ferber. “They assumed our employees knew how to fix these problems. We, in the process, learned more about the technical side of the business and taught our workers about repairs. These were minor repairs [in the beginning]. It was more about helping the customer [with all their needs],” says Ferber.
Talk N Fix was created late last year for minor and major repairs on phones, laptops, tablets, and more; in the mall, in twenty minutes or less, says Smuk. In the beginning, cell phones were big, then they became small, and now they are getting bigger again for the web browsing aspect. “The larger screens, however, are more prone to getting damage. That’s become relevant,” says Ferber. “The business for repairs has exploded in the last 18 months.”
“We are fortunate we are in the cellphone business and get the heads up where the business is going. Phones break and they need service. We go where the direction of the industry goes,” says Smuk. Eighty percent or more of the repairs are done onsite. “Certain repairs are technical, or we don’t stock the parts, and we may need to order parts or send it out,” says Ferber. Profit margins on Talk N Fix units aren’t as high as Street Talk carts, but the dollar amount per repair is higher than the average ticket price at Street Talk. For example, replacing a screen costs an average of $100 for the customer and $30 for the retailer. These are larger ticket items, says Ferber, typically starting at $50 and moving up to $300.
Services also include replacing iPhone housing, simply to change the iPhone standard colors of black and white to more appealing shades. “We call this ‘iPhone color swap.’ This is a big part of the business, as well,” says Ferber.
Because of the technical nature of the job, all Talk N Fix staff are required to go through 1-2 weeks of training, whether it is at a training facility or one of our existing Talk N Fix locations with a trainer, says Ferber. If retailers choose to go to an independently run training school, typically a five-day course, Street Talk foots the bill, a $1,500 value. “This is a very in-depth training with highly qualified teachers,” says Ferber.
The iTalk concept was launched early last year in response to the popularity of Apple products. Every product on the unit is an iPhone, iPod or iPad-related accessory. “Our slim fit backup battery case for the iPhone is a very hot product that we have recently started introducing at many of our carts/kiosks around the country,” says Ferber. Street Talk’s wholesale division specializes in, primarily, Apple-related cell phone accessories.
“Apple products appeal to the masses, but they are not cheap. We see much stronger sales for Apple-related accessories in more affluent areas,” says Ferber.
In the end, whether it’s an iTalk, Talk N Fix or Street Talk location, the idea is the same: delivering products and services that care, protect and enhance the experience of today’s most precious commodity. A product that “cells” itself every day of the week.