Why Pop-up Stores Are Becoming So Popular

The adage “Here today, gone tomorrow” usually hints nostalgically at something that’s disappeared too soon. But when it comes to the increasingly common “pop-up” stores now dotting the retail landscape, the phrase describes something exciting, innovative and optimistic. For emerging brands, in particular, setting up shop in the short term, rather than settling in for the long haul, is a bona fide business strategy that creates and provides an opportunity to build brand awareness, secure customer loyalty and even test-market products or services with key consumers in real life.

Given the well-documented uptick in ecommerce sales, it might seem counterintuitive for companies to invest in a physical presence. Yet Amazon has now launched its third physical bookstore, the newest one in Portland, Oregon, with other grand openings anticipated in Boston and Chicago. New York City-based Casper, the popular online mattress purveyor, will augment its six global pop-ups with a fleet of permanent physical stores. A passing fad? No. A noteworthy trend? Unquestionably.

Rent the Runway pop-up shop at Neiman-Marcus San Francisco
Rent the Runway pop-up shop at Neiman-Marcus San Francisco. Photo by Andria Tay

 

Here are three reasons why pop-up stores make perfect business sense, especially for emerging retailers and for pure digital brands ready to build an offline presence.

1 – Shoppers want to get physical with their favorite brands.

Each year, online sales reach a new all-time high, as 2016’s record-breaking $3.45 billion in Cyber Monday sales demonstrated. Yet many consumers say what they really want is a shopping experience that’s literally touchy-feely. In a recent JLL survey, 500 U.S. participants were asked how the presence of a physical store would impact their shopping behavior. Forty percent “agreed or strongly agreed” they would be more likely to buy from an online brand that also had a conveniently located retail store. In addition to physically interacting with a product, many consumers also want high-touch customer service that’s just not possible via phone, screen or chatbot. Many pop-ups offer something else that customers still value: the sheer simplicity, not to mention instant gratification, of buying a product and leaving with it.

2 – Soft real estate markets are enabling affordable retail spaces.

If you own real estate, you know some rent is better than no rent. This reasoning helps explain why pop-ups are opening in some of Manhattan’s most expensive shopping districts. The softening NYC real estate market, for example, means some retail landlords are leasing premium spaces to temporary tenants, often at discounted rates. It’s a win-win: one real estate expert says pop-up stores bring “energy” to traditional retail spaces and may make them more appealing to other, perhaps permanent, tenants. For a new or emerging brand, the opportunity can be equally positive.

Consider Stantt, which makes men’s shirts in custom sizes. The company was eager to share its wares with its core customers in Midtown Manhattan but could ill-afford rent in that pricey neighborhood. Instead of risking financial dire straits with a long-term lease, Stantt opened a holiday-season pop-up store. In doing so, it put down a reasonably-priced physical stake in a key consumer market, allowing the company to observe customers’ behavior and preferences in the real world.

3 – Emerging companies can build a memorable brand experience, especially for Millennials.

Pop-up stores represent a strategic opportunity that emerging or pure-play ecommerce brands, in particular, may want to embrace in order to deepen their relationship with current and prospective consumers. In many ways, pop-up stores are a perfect retail solution to the Millennial shopper’s preference for “doing” rather than “owning.” A 2016 Harris poll found 78% of Millennials would rather shell out for a desirable experience than buy something. For retailers, a well-considered pop-up or concept store can help bridge that gap.

The luggage company Away hosts events such as candle-pouring workshops, music concerts and artisan trunk shows at their L.A. store. Other locally-driven events, tailored to reflect the surrounding neighborhood and local culture, take place at the New York, London and Berlin locations. By effectively linking quality luggage with a quality lifestyle, Away solidifies its relationship with adventure-hungry, suitcase-needing consumers.

In today’s uber-competitive retail environment, it pays for brands to branch out in new and innovative ways to better understand and meet customers’ preferences. A carefully curated, strategically located, well-executed pop-up store can help retailers build their brand while forging a deeper relationship with consumers now, and in the future.

 

Featured photo credit: dyson by Choo Yut ShingCC BY-NC-SA 4.0