Zack Smith grew up playing video games at Einstein’s Video Arcade on Guadalupe Street. Employees there wore white lab coats and the low lighting felt like stepping into a mad scientist’s laboratory. Last month, Smith opened a store in the same space where he spent his childhood.

Following the arcade’s closure in 2007, a host of businesses operated out of the space before Smith’s smoke shop, most notably a string of leasing offices — Skyloft, The Standard, then The Mark. Despite the area’s popularity, factors such as high rent, seasonal popularity and reliance on foot traffic, pose unique challenges for businesses on The Drag.

“The city has grown a lot, where maybe three or four years ago we wouldn’t have seen (a smoke shop) at that location,” Smith said. “It’s the perfect storm right now, the universe putting us here at the right time.”

The Guadalupe Street location of Smith’s smoke shop, Happy Clouds, is the business’ sixth location in the greater Austin area. To combat the challenges presented on The Drag, businesses often try new methods to stay profitable. For Happy Clouds, this meant opening their first 24/7 shop. 

“(Going 24/7) has really helped out with total sales,” Smith said. “We’ve had the most sales from that midnight to 8 a.m. time frame.”

Limited parking spots pose another gamble for companies on The Drag. Hansford Tew, the assistant manager of 2nd Street, the new second-hand clothing store next door to Happy Clouds, said foot traffic offers companies a unique advantage unavailable in other areas.

“So many more people are walking by,” Tew said. “We have a ton of people who’ve never heard of the store just walking in.”

Emma Van Ryswyk, a store manager at Barefoot Campus Outfitters’ new Guadalupe Street location, said the company prioritizes location over parking spots.

“We’d rather take a smaller space and a better spot in town because foot traffic and (location) contribute a ton,” Van Ryswyk said. “We have great products. Once we get people in the door, our products sell themselves.”

However, Tew said reliance on foot traffic complicates operations, especially for thrift stores looking to source locally.

“Nobody wants to lug four IKEA bags full of clothes for half a mile,” Tew said. “I’m trying to … transfer locally (with other 2nd Street locations). I want an active ecosystem of Austin stores where we all support each other.”

Van Ryswyk said she feels confident in Barefoot’s longevity despite the threat seasonality poses.

“It doesn’t contribute to the success of a business when you have a nine-month busy season and then three months that’s silent,” Van Ryswyk said. “We have nine other collegiate stores, and that’s the case in all of them. We’ve managed to make it work in tiny towns where there’s nothing else going on.”

Tew said The Drag allows for collaboration and support among businesses unlike other shopping areas.

“The most important thing is community, having good relationships with our frequent customers,” Tew said. “We’ve already seen so many people from UT making multiple visits, having more conversations with them. Getting to know them all better — that’s my favorite part.”