The pop-up store has become a go-to marketing strategy for retailers looking to extend the brand and introduce new products. The pop-up industry has grown to approximately $10 billion in sales, according to PopUp Republic.
Pop-up shops are being developed in a variety of shapes and sizes, as well as locations. They can be found in a traditional brick-and-mortar store — as a store-within-a-store — as a standalone kiosk or even via a motorized vehicle, taking the lead from the food truck craze.
Consumers expect that the pop-up shopping experience will be unique — different from the average brick-and-mortar visit. They also look to pop-ups for more specialized shopping. For example, 61% of shoppers list seasonal products as the main reason to shop at a pop-up store, according to a PopUp Republic poll. Pop-up shoppers also are looking for:
Unique services/products (39%);
Localized assortments (36%);
Optimal pricing (34%);
Convenience (33%); and
A fun experience (30%).
“The great thing about pop-ups that we find all across the board — whether it’s a pop-up store, pop-up restaurant or event — is that they have this ‘fear of missing out’ quality to them,” said Jeremy Baras, the CEO of PopUp Republic. “Customers are attracted to exclusivity. They’re attracted to a ‘here today, gone tomorrow’ type of concept.”
In this feature article, Baras and other industry experts share tips and tactics to help retailers build brand exclusivity and decide if a pop-up store fits into the overall marketing strategy. Topics include:
Selecting the right pop-up model;
Planning a standalone pop-up store;
Attracting the right target shoppers to the pop-up experience; and
Measuring the success of a pop-up launch.
Retailers including Best Buy, J.Crew and Nordstrom have ventured into the world of pop-ups. Examples from these and other retailers highlight different strategies and scenarios worth exploring.
Choosing A Pop-Up Model That Works
Starting a pop-up shop can serve as a hybrid for businesses looking to ease their way into a new niche while minimizing potential losses. In fact, launching one is approximately 80% less expensive compared to opening up a traditional brick-and-mortar location, according to StoreFront.
For retailers unsure about setting up a standalone pop-up location, the store-within-a-store concept can be a viable alternative. Several brands have partnered with major retailers, such as Best Buy, Nordstrom and Sears, to showcase and sell related relevant items via in-store pop-ups. These partnerships enable brands to introduce their products in an atypical store offering, with the goal of broadening their appeal among new consumers.
Best Buy has allowed partner companies to use store floor space to set up store-within-a-store models, such as the Samsung Open Houses recently opened in two Minnesota stores and one Chicago location. The electronics retailer expects to open 200 more Open House pop-ups in different Best Buy locations by the end of 2015.
Nordstrom hosts its own “[email protected]” specialty shops, which are a recurring series of in-store sales on products not typically found in a Nordstrom location. From July 3 to Aug. 2, 2015, the upscale fashion and apparel retailer featured luxury and designer goods from London-based department store Liberty in five U.S. Nordstrom locations. This partnership was Liberty’s official entrance into the U.S. market via a brick-and-mortar store.
Nordstrom initially launched the “pop-in” concept in late 2013, spearheaded by Olivia Kim, Director of Creative Projects. The concept features unique brands on a near-monthly basis, and Kim curates the brands herself, giving massive exposure to retailers that may not sell often to consumers that purchase at Nordstrom.
Sears also is testing out the store-within-a-store concept, presently working with four independent partner retailers. As part of the deal, Sears will showcase appliances and lawn and garden equipment in the partners’ stores. These partners include:
Tri-Fecta Home Center, in Sidney, Mo.;
The Grand Emporium Furniture and Bedding, in Waveland, Miss.;
Paco and Son’s Furniture, in Nogales, Ariz.; and
Fremin’s Furniture, in New Iberia, La.
The partnership is designed to allow independent furniture and related home category store owners to expand their product lines to better cater to consumer demand without the need to purchase any inventory. Additionally, Sears can expand reach into smaller markets without having to operate a full department store.
Depending on the level of these types of store-within-a-store partnerships, brands have a varying amount of input regarding merchandising and the overall presentation in the host’s store. Either way, decreased costs for both inventory and appearance management and fewer labor expenses make the model an intriguing concept for both large and small businesses.
“It comes down to how much the control matters to you as a brand,” said Erik Eliason, Co-Founder and CEO of Storefront. “If you have the mindset that ‘this is my experience, my store and my customers,’ then sure, rent your own space and really control that. We’ve seen a lot of retailers driven by the collaborative economy that end up partnering with companies with similar customers so they can set up a two-week pop-up inside another store. It’s equally as prevalent, just not as well covered, in a lot of mom-and-pop shops. These businesses will have an up-and-coming designer or e-Commerce brand that will come in and use their space. For the brand that’s renting, typically that would be at least half the cost than it would to set up a shop, if not less.”
Strategizing For Standalone Pop-Ups
Traditional standalone pop-up stores suit retailers that are interested in controlling all aspects of the store and are willing to take the financial chance to rent or purchase real estate. To create the exclusivity and sense of urgency necessary to build a standalone store, these retailers must plan to cover all facets of merchandise buying, location, design and marketing. Since the pop-up concept offers a different retail experience compared to the typical brick-and-mortar location, retailers must start the planning process at least three months before opening a pop-up location.
“The ideation for big companies usually starts very early,” said Melissa Gonzalez, CEO of The Lion’Esque Group, a pop-up store architect. “They tend to get projects approved before everything comes together months later. If you were to isolate it, preparation should start a solid three months at minimum, including ideation, approval, finding the location, then rendering 3D mockups of the store. Then we need time for buildout, and decide if we are renting or buying the real estate. We would definitely like to have no less than three months to plan it out, and we’ve had times that were longer that makes the process much better. We’ve worked in less time and it’s a rush game, but even if it works out, it’s not ideal.”
To promote the brand exclusivity of the store, these shops generally remain open for just a few months — making every minute count when it comes to creating brand awareness. For example, J.Crew launched a pop-up shop inside its Prince Street store in New York City on June 12 that only lasted 24 hours. At the shop, J.Crew sold merchandise from three brands (Public School, Juan Carlos Obando and Marc Alary) — finalists of The Council of Fashion Designers of America/Vogue Fashion Fund. To promote the event, the retailer launched an online presale of the brands for a few weeks prior to the opening, with some of the pieces nearly selling out.
Attracting The Right Consumers To Your Pop-Up Experience
Location is arguably the most significant factor to consider when building a pop-up shop. With very little time in the spotlight, pop-ups must be located in an area that will attract the right attention from targeted shoppers. By collecting and analyzing shopper data from online purchases, retailers can pinpoint the best location to open a pop-up.
“It’s all about your target market,” Baras said in an interview with Retail TouchPoints. “Who do you want to be your ideal customer? If you want your customer to be Millennials, most likely you would set up shop downtown, or set up in a location surrounded by other stores where Millennials shop, or in a shopping mall. Tailor your location not necessarily to heavily populated areas of towns or cities, but rather go into places where your target market exists and build a following that way.”
Marketing also is a crucial element in pop-up store success. As more pop-up shops enter the market, competition is heating up and retailers must push the envelope when it comes to creative campaigns. Some brands have found success tapping social media or events marketing.
When it comes to social media strategy, retailers and brands should focus on their powerful influencers who are advocates of the company’s message and products. Influencers can be bloggers or unofficial spokespersons who interact with the brands’ social media pages often and generate buzz in the lead up to the store’s opening. Gonzalez also recommended retailers to hold cross-promotions with non-competing brands to add value to the experience and introduce the product to a newer audience.
“If you already have a following, have them engaging with you,” Gonzalez stated. “You can even invite a major influencer to host a night in your shop, where they can invite their own following. Open up the doors for them for free.”
Additionally, Gonzalez noted, look to engage “guerilla marketing street teams. As long as street teams hand out something intriguing and thought-provoking, and will make people want to check out the store.”
M&M’S World, a pop-up store in New York City’s SoHo district that opened July 17 and is set to run through Sept. 2015, will deploy street teams to distribute coupons that will drive awareness and visits to the store. Also, guests who follow M&M’S World on Instagram will receive a special discount at check-out.
Retailers also can use special events to spread the word about their pop-up. This tactic is called “programming the store,” according to Eliason, of Storefront. “It’s moving from a pure warehouse retail store to a platform for events,” Eliason said. “Every night, what events do you have within the store that can attract your customers?”
For example, in July, Sprite opened up a corner store in New York City that only sells Sprite soda. Throughout August, the bodega-styled “Sprite Corner” will hold events including a cooking class taught by celebrity chef Eddie Huang and numerous performances from local hip-hop artists.
How Can Brands Measure Pop-Up Success?
The best metric that truly gauges the success of a pop-up shop is the number of people that visit the store, according to Baras of PopUp Republic.
Store visits outweigh overall revenue and sales, Baras asserts. “Yes, retailers want to make as much money as possible and there’s a certain amount of success that’s measured through revenues and PNL statements. But the amount of customers walking through your store shows that they are interested in and aware of your brand, which arguably is just as valuable as making that sale, because that means that you have the potential for them to be loyal followers of your specific brand.”
Additionally, retailers can measure success via sales lift in both their in-store environment and their e-Commerce site, particularly if they offer deals in the shop that consumers can redeem online, according to Eliason. Not only are retailers looking into how many people enter the store; they also look at how many people sign up for email lists and engage through social media.
“In a digital setting, these pop-ups are ideal for social media,” Eliason said. “The brands are looking for compelling content to share and the consumers are looking for compelling content to engage with. They might get 30,000 people to come into the store to come into the event, but there might be another 300,000 impressions online.”
Deliver On The Promise Of Unique Pop-Up Experiences
The best way for retailers to approach the launch of successful pop-up shops is to focus on building a combination of a ‘can’t miss’ attitude and making connections beyond the products being sold. As more retailers enter the pop-up space, they must reach for innovative ideas and take more risks to make their pop-up stores relevant and unique.
“The consumer has different expectations from a pop-up then they do from a regular store,” Gonzalez stressed. “They go to a pop-up to be surprised and delighted and be able to discover new things. I’d rather retailers go a little bit deeper into their inventory than have a store full of 100 SKUs and a confusing story told in the space, because the pop-up is your opportunity to tell that story to the customer what you offer that’s unique and different.”