While pop-up stores have been a growing avenue for retailers seeking to build an alternative brick-and-mortar presence, the changes in consumer behavior have taken these shop concepts from a niche strategy to a go-to brand builder.
As the struggles of department store retailers and traditional brands in 2016 have revealed, holding a stable brick-and-mortar presence across hundreds of high-square-footage stores is difficult. With the top-25 retailers (excluding Amazon) losing 0.9% of market share since 2010, small- and mid-level players have more of an edge when it comes to being nimble and creative with their store environments.
Within the past year, brands such as Hello Kitty, Rue La La and Shoes.com have created pop-ups that provide sales and experiences not typically offered in traditional retail stores, whether through a shipping container that turns into a café, a two-day shopping event with a disc jockey, or a revolving door of different brands of footwear.
Yet as more retailers dip their feet into pop-up store concepts, they must understand a few lessons going into the process:
The landscape of the physical retail store has changed, and brands need to find creative ways to optimize store space;
Storytelling, exclusivity and fun are elements that set the table for a differentiated experience; and
Building relationships beyond the pop-up is necessary for success, regardless of the store’s intended goal.
The Tumble Of Traditional Retail Provides Path For Pop-Ups
Brick-and-mortar stores are struggling to draw shoppers in and keep them there, as e-Commerce sites give shoppers a reason to stay at home, or on their mobile devices, to shop. As many traditional brands fail to provide a differentiator that sets them apart from e-Commerce stores, the landscape of brick-and-mortar store space is going through an upheaval, and creative brands are taking it in a new direction.
“We’re seeing an evolution where brands realize that the traditional retail model environment that has been a mainstay within our communities for the last 30 to 40 years has changed,” said Jeremy Baras, the CEO of Pop-Up Republic. “It’s changed parallel to e-Commerce and omnichannel commerce, it’s changed as consumer buying patterns and preferences have changed, and it’s changed with evolving communities as well. You go down any street, whether it’s Main Street in a major city or a side street in a suburban area, and more often than not you’re going to find a vacant storefront of some scale. For retailers, they now have to evolve their physical presences to keep up with all the alternative options that consumers have.”
Unlike a standard physical store, pop-up stores often are built on the premise of a unique retail experience and promoted as an exclusive showcase of the brand story.
“Brands and retailers are understanding that the expectation of a customer or media when they come into a pop-up store is very different than when they go into a regular store,” said Melissa Gonzalez, CEO of pop-up store architect the Lion’esque Group. “They come in with bigger expectations of being surprised and delighted while they discover new things, so retailers know the storytelling design of the store is now important.”
Rue La La Relies On Two-Day Exclusivity To Motivate Shopper Visits
Recently, Rue La La hosted a pop-up experience in Boston for just two days, on June 4-5 from 11 am to 4 pm. The pop-up shop was an extension of the brand’s #SummerOfCotton campaign with Cotton Incorporated, and was designed to introduce consumers to the Rue La La summer collection before it was sold online.
“We really wanted to make this an exclusive event, not just a retail experience,” said Trisha Spillane, Public Relations and Brand Communications Director at Rue La La. “We had a DJ, a fashion illustrator, a GIF booth, a live flower wall, and giveaways. It was more like a party than a shopping experience.” After the conclusion of the pop-up event, the summer collection was offered on RueLaLa.com, but only for seven days.
When brands are planning this type of exclusive event, marketing and advertising must play a key role. After all, retail pop-up shops don’t have a positive effect on the brand if they aren’t noticed in the first place.
“From a digital standpoint, we sent email invitations to all Rue Members in the New England area letting them know about this unprecedented event,” Spillane said in an interview with Retail TouchPoints. “We created a Facebook event page and utilized our social channels to share the news about the event. We tapped fashion blogger Jacey Duprie of Damsel in Dior; she shared the event and all the excitement before, during, and after on her social channels and blog.”
Hello Kitty Opens Yearlong Café Pop-Up To Attract U.S. Consumers
Unlike Rue La La, the Hello Kitty brand designed its Café Pop-Up Container in California to stay open for a much longer period of time. The pop-up opened in July 2016 and will remain up and running for one year until it’s closed up, potentially repurposed into another concept and taken somewhere new.
“When we hear about ‘pop-up,’ we usually hear about a shorter timeline, which is why we wanted to do something a little bit differently,” said David Marchi, VP of Brand Management and Marketing for Sanrio, operator of the Hello Kitty brand. “It’s more of a gray area between a pop-up, which is typically historically either a weekend or a couple of weeks at the most, versus a typical brick-and-mortar experience which could be there for years. It’s always about seeing what the fans react to and making it work.”
While the Café Pop-Up Container will last much longer than a typical pop-up does, it aims to use the extra time to deliver a new element of fun to U.S. fans. Previously, the only Hello Kitty cafés in business operated outside the U.S., so American consumers now have a new way to enjoy the brand experience. The fun environment fostered through the Café Pop-Up Container is actually quite ironic given that the physical space is designed within a shipping container, a storage box that many would consider boring or nondescript.
“We liked the idea of taking something that would be considered mundane in everyday life, like a shipping container, and making it really cute,” Marchi said in an interview with Retail TouchPoints.
The pop-up turned heads almost immediately. On its opening day, the attraction was so popular that it had to temporarily be shut down for a few hours after drawing a line of approximately 200 people. The dining patio features a menu filled with Hello Kitty-adorned pastries, hand-shaken teas and custom-made beverages, as well as merchandise such as ceramics mugs and T-shirts.
Shoes.com Tiptoes Into Brick-And-Mortar With Pop-Up Partnerships
Unlike most brands setting their sights on pop-up models, Shoes.com is opening two stores it intends on making permanent. The online retailer recently opened its first store in Toronto and plans to open its second in Vancouver in September. As part of the store experience, Shoes.com is implementing pop-up stations specifically for partnering footwear brands, which will take turns showcasing their shoes for sale within both stores.
The Shoes.com stores will rely on revenue from the shoe brands that want to sell in the shops. Thus far, the retailer has made agreements with brands such as Clarks, On, Guess and a collection of brands from LEF Industries. These brands pay a fee to take up residence in a section of the store within a time frame that can range from two weeks to two months, according to Geoff Henshaw, VP of Marketing and Retail at Shoes.com.
The pop-up store experiences will differ from those in a traditional store in that the branded shoes are temporary, yet will take up the entire store space. Whereas a large department store may dedicate a small portion of their floor to third-party merchandise on an ongoing basis, everything within the Shoes.com locations will only last the maximum of two months.
Customer-First Or Bust
As retailers offer new experiences, drive consumers via exclusivity or simply draw attention to third-party brands, they have to know what they’re getting into beforehand.
Since shoppers now have various channels at their disposal and can make a purchasing decision (or change their mind) at the drop of a hat, retailers have to ensure their pop-up strategies remain customer-first and are designed to trickle down to the rest of the brand.
“Regardless of the concepts, intentions, goals or motivations, it’s essential that brands keep their customers’ interests in mind first, both in terms of positioning the brand and product to consumers as well as from a location perspective,” said Baras of Pop-Up Republic. “If we had a brand suggest to us to create a pop-up on Mount Everest, that’s great and it’s a cool idea, but nobody’s going to come visit it. While that’s different and interesting, you’re not going to make any sales from it and you won’t see many customers.”
Gaining insights into these customer habits is easier said than done on such a small scale, but retailers do have options as long as they can be creative. This process can even start with a step as simple as asking consumers for their email when they shop online or within a regular brick-and-mortar store. Gonzalez, of Lion’esque, recommends that retailers create assets with specific codes that go hand-in-hand with different steps of the store experience. In implementing these codes, retailers may alleviate the difficulty of tracking consumers during the short period of time a pop-up traditionally stays open.
“If you provide a discount code or an exclusive pop-up code, or let that remain active over the next few months, you can track sales that way,” Gonzalez said. “Creating customer profiles while they’re in the pop-up store is also a great way to find out where the relationship starts and continue on from there. For example, if you’re a clothing designer and you know a customer doesn’t want to purchase immediately, but you’d love them to have a better online experience going forward, start a profile for them, take their measurements and take notes of what they like. This way when they go back to the retailer later, they have a memory of that and they’ve already established trust.”
Pop-Ups: More Than Just A Sale
In establishing trust with the consumer, retailers can go beyond faceless, Big Data-style analytics to build a more organic understanding about consumer shopping habits. While all the differentiated shopping experiences in the world can drive consumers into a pop-up store once, they won’t mean much in the long run if the consumer isn’t willing to go back and shop at the store after the first interaction. As much as storytelling and exclusivity matter in portraying a pop-up store’s image, the relationship beyond the purchase should always be the end goal for the retailer.
“It’s not just about the sales,” Gonzalez said in an interview with Retail TouchPoints. “It’s also about all the learning that’s happening and continuing that relationship later, and understanding that technology is a tool and that you still have to have goals. You still have to have a well-thought-out approach to it, because collecting data alone that lives in a silo isn’t going to do much for you. You need to make sure you have a plan and infrastructure set to see it full circle.”