EDITOR’S NOTE: Our Retail Wednesdays series profiles a different specialty retailer each week, in an effort to spotlight success stories and gain insight from shops that are continuing to grow in the face of a challenging economy.
Retailer: Daydream Surf Shop
Location: 1588 Monrovia Ave, Newport Beach, California 92663
Owners: Kyle Kennelly and Becca Mantei
Daydream Surf Shop in Costa Mesa opened last year with the vision of offering a new shopping atmosphere to customers in the area. The shop is an archetype for "new retail," creating an all-encompassing experience that extends beyond just buying goods. We caught up with owner Kyle Kennelly to hear more.
Interview has been edited for length and clarity.
Tell us about your inspiration for opening the shop, and the decision to move down from SF.
Our inspiration to open our own shop came from a long chain of events and life experiences, but can really be summarized more generally as two post-college grad millennials trying to find a way to balance earning a buck without sacrificing our core values. Your job is so much of an extension of yourself and should be something you're proud to be a part of.
For example, after I graduated from Berkeley, I wasn't smart enough to go to grad school yet but received a job offer to join JP Morgan's investment banking team. According to the demand of the job market and societal standards, I should've been thrilled for this opportunity. And, a part of me was.
Finally, I'd be able to have my own apartment and pay off my student loans. I would be able to treat myself to things I've never had access to as a child of a single mother that grew up supported by welfare. But, nothing is worth working for one of the most immoral corporations on Earth. That cubicle where I spent upwards of 16 hours per day, however, is where I hatched the idea for Daydream.
It was the only light I saw at the end of this seemingly never-ending tunnel of philosophical uncertainty. We always knew we wanted to open Daydream in the neighborhood where we grew up in. Every time we visited home while we were living in San Francisco, it felt like a big homecoming celebration. We wanted to channel that energy into our dream jobs.
Was the west side of Costa Mesa always on your radar? It is traditionally an industrial zone. But, can you talk about some of the changes happening on that side of town?
Most definitely. The Westside has always had so much potential to become one of the coolest quadrants of Costa Mesa. The fact that it has so much independence from the frumpy aesthetic of Corona Del Mar's Fashion Island, the Eastside of Costa Mesa's strip malls, and the Peninsula's party vibe makes it especially appealing to us.
For a brick and mortar business with one location, it was important for us to be mindful with regard to how the geographic association can affect our customers perception of our shop.
Rather than being associated with old, big box retail, we wanted to be associated with the few rad, design-forward, and progressive businesses that have popped up on the Westside.
These include Costa Mesa Ceramics, The Boathouse Collective, The Westside Museum, Costa Mesa Surf Club, Costa Mesa Conceptual Art Center, 2145 Pizza, Commonroom Roasters, and Outpost Kitchen, amongst others.
What have you learned about the business since opening your doors? Have you changed the setup at all?
I've learned so much since we first opened our doors! We're always making little changes with regard to interior design but that's just because we are always striving to make the shop look fresh and exciting for returning customers.
In terms of learning, I think the single most valuable concept that I've learned is how to balance your productivity and your emotions. For a while I was just working around the clock, non-stop. I was there before we opened, stayed in the shop the entire day, and continued to work until way after we closed our doors.
This went on for months. Eventually, I was feeling pretty burned out, I was getting sick all the time, and because of this my vibe wasn't where it needed to be when I was working on the floor. I learned that if I capped my hours daily I was able to have a healthier, more well-rounded day, and would be so stoked to be in the shop interacting with customers. It really helps to work from a place of rest, that's also when I seem to come up with the best ideas. Everything is just in a more natural flow and seems to fall into place.
I've noticed you guys have a healthy relationship with your coffee supplier, Sightglass.Business-wise, is coffee the primary focus?
Definitely. It's super difficult to survive as a business if your selling products with a 50% margin. You essentially only make enough money to restock what you sold. In essence, you're one 30-day term from going out of business. That's why I always trip out on the fact that retail outlets are still in business at all considering many of them work on a 50% margin and have a ton of expenses.
With that in mind, I knew if our business was going to survive, we'd need to look at our passions and find a ways to leverage a high margin business relationship with them. Not only are we extremely passionate about coffee, the fact that Orange County has much fewer specialty coffee shops than most areas makes a great intersection between business and personal interest.
What shapers are you carrying, and why did you choose to stock these boards? Are surfboards a big part of sales for the shop?
We have tons of different boards from a myriad of shapers. Off the top of my head, I can name many of them between our new quiver and our Surf Club quiver: Gato Heroi, Andreini, Lovelace, Liddle, Fineline, Deepest Reaches, Hanel, Campbell Brothers, Elmore, Tanner, Son Of Cobra, Nine Lights, Alex Knost, Somma Special Designs, Tyler Warren, Daily Shred, Jive, Crimson Eye, Barrett, and Polyester Sun.
I’m sure I’m leaving some out but you get the idea. People have been buying boards left and right! Over the past two days we sold three which I consider a pleasant sell through rate considering our “new board” rack is pretty small — usually we have less than 25 new boards at one time. My original projections were estimated for us moving four boards per month. To be honest, I’m more interested in getting folks into our Surf Club because it’s so accessible!
Are local people taking advantage of your board-share program, the Daydream Surf Club? What is the feedback from them?
People have been loving the surf club! It’s funny, all my friends that surf really well are super broke, so we definitely have it priced so it’s accessible for all the shredders that want to try boards but might not necessarily have a large sum of money to drop on a new sled.
Right now, we only charge $50/month, although that could go up soon. At the moment, we have roughly 30 boards; also, we cap it at 20 members at a time so that we always have tons of options for folks to pick from. We have it pretty evenly divided between low volume, midlengths, and high volume stuff which range from fishes, finless, mini simmons, bonzers, hulls, eggs, logs, gliders, and even a flex spoon!
The feedback couldn’t be better. I just had a new member tell me today, “this rack of boards has greatly changed my life for the better.” It’s arguably one of my favorite parts of the shop in part because it really plays into the educational relationship we have with our customers.
I’m just excited to teach folks about surf history! It’s crazy, some folks don’t even know who George Greenough is, which isn’t necessarily their fault. For a while surfing really targeted folks that treated it as an action sport rather than an academic interest, so we’re trying to help convert people’s perspective on the recreation.
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