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 aPopUp 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 “Pop-In@Nordstrom” 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.”
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