Dirty Lemon

Dirty Lemon, a startup that sells fancy water infused with ingredients like charcoal, CBD and collagen for more than $10 a pop, made The New York Times today with its new pop-up store in New York that puts you on the honor system when you pay. While this is probably a gimmick to get attention (it worked!), it does illustrate how the traditional notions of convenience stores are being upended left and right.

Located in Manhattan and dubbed Drug Store, Dirty Lemon’s small retail shop has no cashier or checkout. For Spoon readers, this will immediately bring to mind Amazon Go, which uses an array of advanced computer vision and sensors to monitor what people put in their bags and then charge their account automatically as they leave the store.

There is no such high-tech gadgetry at Drug Store. As the Times reports, customers walk in, grab their Vitality Booster (+matcha) beverage and walk out:

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.”

This pay-by-text is actually already a big hook for Dirty Lemon, which has customers use SMS to re-order product. According to the NYT Article, Dirty Lemon has 100,000 customers, and half of them order at least one case (6 bottles) a month. With cases starting at $45, that’s at least $2.25 million in sales each month.

Dirty Lemon CEO Zak Normandin told the Times that he wasn’t worried about theft at his pop-up store and had plans to use its $4 million digital ad budget to open up more cashierless brick and mortar locations.

This idea of focusing on real world spaces in our digital age actually sits at the crossroads of two trends we’re seeing in food-related related retail:

First, there is a reinvention of the traditional convenience store going on. You could say that Amazon is driving a lot of this change with its aforementioned Go stores. Amazon has opened three Go stores in Seattle with plans on the books to expand to San Francisco, Chicago and New York.

As we’ve experienced firsthand, Amazon Go puts the convenience back in convenience stores. The grab-and-go technology is seamless and makes shopping for everyday quick items or even fresh-made sandwiches and meal kits fast and easy. Other technologies from places like Trigo Vision and Aipoly are popping up to enable similar store experiences.

Elsewhere along the west coast, we recently visited The Goods Mart, which is trying to create a healthier version of 7-11. Featuring kombucha slushies, organic treats and imperfect (ugly) fruit, The Goods Mart also gives back to its community by donating tips and holding community dinners.

Doing away with the store space altogether is Stockwell, the startup which started life as the much-reviled Bodega. Stockwell’s idea is to outfit high-traffic buildings (like apartments) with high-tech cabinets filled with sundries and snacks. Like Amazon Go, you grab what you want and go back upstairs, presumably still in your jammies.

The other trend Drug Store is capitalizing on is the retail-as-experience renaissance. Kitchen tech startups Fellow, Brava and Anova have all built, or are building, brick and mortar locations where people can come in, see products in real world settings, and learn how to use them properly.

Who knows if Dirty Lemon will have staff on hand to explain the benefits of drinking collagen water, but what Drug Store will do is establish a direct connection/relationship with any of the consumers that choose to stick to the honor system and make a purchase. Dirty Lemon will have a marketing channel directly to a customer’s phone, where impulse orders can be made with a simple text.

For Dirty Lemon, opening up more physical locations in high-traffic areas could be pretty sweet.