Learning to Pivot S’More

When Lindzi Shanks and Kat Connor opened the world’s first marshmallow cafe in 2017, they anticipated the summer season would be a business bonanza thanks to the public fascination with s’mores, but they came to learn that XO Marshmallow truly thrived in the fall and winter weather seasons when guests craved hot chocolate.

In order to capitalize on these customer beverage trends, they pivoted and responded in a number of ways including:

• Adding limited edition/specialty flavors in late fall
• Creating a December Advent calendar 
• Searching for collabs that aren't time-sensitive for later in the year

To learn more about how these profitbable pivots and more, Modern Restaurant Management (MRM) magazine reached out to  brand co-founder Shanks.

When did you realize you needed to pivot and how quickly were you able to do so?

When we first started XO Marshmallow, we expected summer to be the busiest time of the year for us. S’mores are summer, right?

Turns out, holiday was our biggest moment – especially once we added our advent calendar.

Pivoting was hard that first year, but by year two ,we realized this was the trend and started focusing more time on preparing for the holiday season and using summer as a time to gear up for that rather than sales. 

However, last year we went viral 10+ times in the middle of summer. All of a sudden we were really busy during a time that we normally have for planning. We had to pivot quickly and staff up as much as possible earlier than normal. 

Luckily, we have such an incredible team here that is flexible and willing to roll up their sleeves – allowing us to pivot much smoother than when we were on our own.

Do you keep a list of ideas around for possible future use? Where do you get ideas?

Always! I think we have a list of 1,000+ flavor and product ideas at this point. We keep a running Google Sheets list that our employees can add to at any time.

Our ideas come from a variety of places – employees, pop culture, food trends, but most importantly from customer suggestions. After all, they are the ones buying them.

How did you get the idea for the Advent calendar and what response did you get?

I had an Advent Calendar growing up, but it was super boring. It was a cloth one that we just moved daily. I was always jealous of the kids who had the chocolate ones.

I started thinking about the kind of Advent I wanted as a kid so bringing marshmallows into it made total sense because, how fun and different and nostalgic all at the same time! 

Clearly I was not alone, because our Advents have continued to be wildly popular. We sold out of the first one in 2 weeks. We doubled the volume and the same thing happened the next year. We tripled it the third year and the same thing happened again. We are now on year six and it’s something both our customers and we look forward to every year.

What are your best ways to market and promote when you have something new going on?

We are all about social media over here. We think it’s the perfect way to connect directly with our customers in a really authentic way. It allows us to get real-time feedback on any new launches. We always launch new products to our newsletter VIPs first and then blast it all over our social profiles.

What would your best advice be for an operator who has a business that has a season regarding how to attract guests other times of the year?

If you have a more popular season, make sure your finances are set up to ensure that your cash flow lasts throughout the entire year. You don't want to be waiting for the busy season to be able to buy things or make decisions. I also think “slower” months are the perfect time to get super creative and experiment.

We use those months to come out with products that are a little more off the wall or are more labor intensive – innovative products that we just do not have the time for during the holiday season when we are working hard to keep up. It’s a great time for our customers to see our creativity.

Launch some fun, limited edition products that entice customers to buy during off months — especially if it’s an item they can only get during those months.

How do you come up with potential collabs and how do you develop relationships that are beneficial to both brands? How important is working with charitable efforts?

The biggest factor when considering collaborations with other brands is the synergy of the brand. If our brands do not align or the product idea doesn’t make sense, then we don’t try to force it – even if it’s a cool brand we might personally love.

We look for collaborators who 1) Align with our brand values (we want to make sure we are supporting the same things), 2) Our customers know and love (or would love if they knew them) and 3) Can help us create a product that both teams will love.

If a collaborator fits all three then we know we have something amazing in the works and can start a project together. We tend to work a lot with brands to create marshmallows based on their brands, but we would love to work with other brands – especially in home décor – that use our brand and marshmallows to concept designs. An XO Marshmallow kitchenware collection? Someone call me!

It’s also important to us to work with nonprofits whenever we can. We get a lot of requests and while we would love to work with everyone, it’s just not possible.

Instead, we focus on nonprofits that align with our brand’s mission and values. We focus a lot on mental health in part due to my background in psychology, so organizations like Trevor Project and Hope For The Day are the perfect examples of organizations we are proud to work with.

How far in advance are you working on the next promotional pivot?

It depends on the season and the extent of the collab. For example, we know the holiday season is very busy for us so we are now working to get everything done ASAP.

I start working on the Advent calendar design in January! So I'm pretty much focused on that year-round.

We have some projects we get excited about that we can turn around quickly, especially during the slower months, and others that take longer. We are getting ready to do a big launch with Strawberry Shortcake in June. That process started over a year ago. So, it’s project-dependent in a lot of ways.