Pop-Up Retail: Popping Up and Taking Names

The retail sector has seen its ups and downs in many ways, particularly with the closing of anchor stores dragging down retailers in many markets. It’s holding back rent growth and calling for some creative approaches to keep established companies afloat.

While large concerns like the Sports Authorities and JC Penneys of the retail world find it difficult to be nimble as they contend with high costs and long production schedules, smaller companies and start-ups have more options.

Creative businesses are taking a fresh look at the idea of pop-up retail, and finding the approach to be increasingly profitable. New strategies and a consumer appetite for novelty are helping to make pop-up retail an $8 billion a year industry.

According to the marketing service Pop-Up Republic , “a pop-up is a shop, a restaurant, a collection of shops, or an event that opens quickly in a temporary location and is intended to operate for a short period of time”.  Pop-ups can be seasonal, like Farmer’s Markets or Halloween shops, or once in a lifetime.  The approach allows businesses to build their brand and connect with customers without the cost and commitment of a brick and mortar lease.

Pop-ups are popular in part because they are temporary. They feed into consumers’ desire for exclusivity and surprise.  Knowing that a pop-up only exists for a short time adds excitement and urgency to the shopping experience. Customers have a limited time to get a close look at merchandise that is not necessarily available most of the time. They can touch the product, and often meet the designer. A pop-up is an event, and it also creates a human connection to a brand that consumers might otherwise only encounter online.

It’s not just young, small businesses that are making the pop-up idea work.  Giants like Target create a stir with pop-up stores. They operated a 2 story “dollhouse” they New York’s Grand Central Station a few years ago to showcase a new home décor line. In December, they opened a pop-up called Target Wonderland, which gave families a fun-filled destination for holiday shopping that included a giant Lego pirate ship a “Frozen”-style castle, and more.

The Wonderland provided customers with RFID cards that they could scan when making a purchase. No physical shopping cart. At checkout, the card was scanned and purchases delivered via a “chimney.” The experience incorporated the best features of in-person and online shopping in one fun package.  

Pop-ups are also being used to address the problem of vacant retail space in some markets. This can be called “permanent pop-up” space, and it offers a revolving cast of temporary shops making use of the location. Pop-ups can make good use of even very small spaces, or vacant lots.

Pop-ups have an impact on sales long after the event has ended, according to research.

The social media traffic for companies also increases dramatically during a pop-up, and that has significant and lasting benefits as well.

So there are benefits to both retailers and commercial property owners in pop-up retail. For retailers, these are the primary motivations for popping up:

  • Test a new revenue stream or location
  • Engage customers offline
  • Unload old inventory
  • Tap into “urgency”
  • Market around a sale or holiday
  • Educate customers and generate brand awareness
  • Go to where customers are

Pop-up shops are one way that retail is being reinvented to survive in the digital age. It represents important strategies for combining the most effective elements of online and real-world retail, enhancing digital performance with social contact and fun.