Though the word Instagrammable may be outdated, TikTokable (coining that phrase) may be the next big thing, and XO Marshmallow Café in Chicago fits the bill.
XO Marshmallow’s interior was inspired by the dark, gloomy winters of Chicago, so the design is, naturally, bright, and colorful.
“If somebody was to come in here on a cloudy, rainy, and gross day in Chicago in February, this place still puts a smile on their face,” said co-founder Lindzi Shanks.
That’s led to consistent traffic during the winter months when traffic in Chicago typically dips.
The fast-casual café has seen year-over-year growth in sales since it was founded along with consistent traffic despite bigger brands seeing decreases in recent months.
The café is an offshoot of Shanks’ successful marshmallow business that began in 2015 as a collaboration with marshmallow creator Kat Connor. Together, Shanks and Connor decided to pursue a direct-to-consumer business. A year later, the café was born.
It was the world’s first all-marshmallow café, according to Shanks.
The brand focuses on marshmallows — in every flavor. The menu includes things like cold brew floats, which is cold brew with a scoop of marshmallows.
Despite being closed for a month and a half for renovations to their new space, XO Marshmallow ended 2022 up 40% in sales, according to Shanks. That’s partially due to the brand’s new space — which is larger than its previous one — and partially due to the café’s social media presence.
XO Marshmallow is on every social media app and posts daily, engaging customers for their feedback as well.
The brand posts detailed, behind-the-scenes videos, and has almost 200,000 TikTok followers.
“The number of comments from people that are like ‘I watched it 50 times in a row,’ or ‘This is so satisfying,’ or ‘I wasn’t hungry before I started watching this video and now, I am’ — it’s just about helping people eat with their eyes,” Shanks said.
XO Marshmallow Café was founded as a lifestyle brand before the term lifestyle brand was mainstream. Now, lifestyle brands are abundant — Starbucks is trying to become one — but XO Marshmallow Café retains market share in Chicago.
What is a lifestyle brand?
To the XO Marshmallow Café founders, it means having a socially conscious mission, merchandise, and a voice on social media, where they are creating a community.
“From a lifestyle brand perspective, we also want to make sure that we’re creating a brand that is in line with our customers’ values and something that they want to be part of, whether it is engaging in our social media or purchasing additional merch or being a part of additional social media campaigns and innovation,” said Shanks.
This is in line with research from multiple companies, including Knit, an agency studying Gen Z, which conducted a research study called Gen Z’s Brutal Feedback on your Marketing. According to that report, one of the most important characteristics of a brand is a social responsibility and “stand[ing] for something.”
That’s something XO Marshmallow does well.
Shanks has a degree in psychology, and she uses it to further a mission of mental health matters at XO Marshmallow.
“Mental health is really important to us from a company culture perspective,” she said. “But we also want to make sure it’s something we’re talking about on our social platforms as well.”
That includes talking about body positivity, therapy, and focusing on happy moments on the brand’s social media, mainly its Instagram account.
At the store, focusing on mental health means therapy breaks for any employee during the workday. Workers are invited to have their therapy sessions during work time and are given access to a closed room that locks for virtual therapy sessions.
The company also checks in with employees at the beginning of each day to see how they are genuinely feeling using a scale of 1 to 5. It gives the store manager the chance to know if a person is struggling on any particular day.
XO Marshmallow also gives employees mental health days.
“The more that we leaned into an environment where people feel that they have the space to talk openly about their mental health, it just created a better environment,” Shanks said. "Something that my business partner and myself have tried to do over the last couple of years is really lead by example.”
That means that Shanks and her business partner take their therapy calls from the café.
The focus on mental health has helped with retention: “in the last year, we’ve had almost no turnover,” she said.