Pop-Up Store Phenomenon

Pop-up stores are one of the most fascinating phenomenons in the retail industry in recent years. According to recent data, the pop-up retail sector generated over £2.3 billion in turnover in 2015, up from £2.1 billion in 2014. To put it in more perspective – the turnover generated by the pop-up stores in the UK was equivalent to almost 0.80% of the total retail turnover in the country.

The pop-up stores, also referred to as “flash retail”, began sprouting up in cities in Europe and the U.S. early on in the current millennium. The first generation of stores to be created took on a consciously makeshift quality, as they were often occupying vacant mall spaces and abandoned storefronts. A tumbling commercial real estate market, and soaring vacancy rates, accelerated the trend as accommodating landlords became more willing to negotiate short-term leases to help cover their mortgages – and so more and more pop-up stores started to appear.

The outlets are also increasingly numerous – there are over 11,000 pop-up shops in the UK, providing employment to over 30,000 people. Several successful ventures are transitioning into established retailers, and this has helped to support the growing number of small retail businesses that have been noticeably more present in the retail space in recent years. The number of small retailers increased by 3.2% between 2013 and 2014. The highest percentage of consumers visiting pop-up shops appears to live in London and South West of the country, whereas this form of shopping seems to be the least popular with people in the North East and Scotland, according to the research published by YouGov and Cebr analysis.

It has been a phenomenon that has grown in two ways: pop-up stores have been employed by both independent retailers, operating individual stalls – but many traditional retailers, known from large-surface stores or dedicated stores in large shopping centers, have also picked up the pop-up merchandising concept:

  Target showcased designer Isaac Mizrahi’s women’s clothing line in 2003 with a 1500 square-foot store in Rockefeller Center (New York City), which was open for five weeks

  Gap furnished a school bus with 60’s themed apparel and accessories, utilizing the bus as a traveling pop-up store

  Online retailer Bluefly.com opened a brick-and-mortar store in New York, clearing out old stock in a temporary boutique.

  MTV partnered with Adidas, Levi’s and Sony Ericsson, taking their pop-up stores all over Germany, stopping at cities for a week at a time and purveying limited edition apparel and high-tech items.

  Nike’s Runner’s Lounge in Vancouver lured runners with free massages, snacks, drinks, and the opportunity to test-drive a new line of running shoes.

On top of that, retail and tech giants like Amazon, Ikea, Google and Microsoft are said to be experimenting with the pop-up store concept, further reinforcing the fact that pop-up stores are a valid marketing and retail channel that provides an innovative experience along with a plethora of opportunities, to both retailers and customers alike.

Having discovered that consumers flock to and embrace the various manifestations of pop-up spaces, retailers have come to view the pop-up store strategy as a legitimate and innovative means of connecting with customers and extending their brands, positioning them in a hip, cool but also elusive context, making it more attractive to their clients. The latest iterations of pop-up reveal more elaborate displays, high-end signage, more sophisticated POS, advanced mobile commerce capabilities, and meaningful interactive experiences that enable useful conversations with customers.

Pop-up stores can reflect deep integration with modern, high-tech marketing methods that help with increasing the volume of sales, customer retention and brand loyalty. A shop can have sensors installed near the entry, counting the number of people walking in and out of the store, providing detailed and accurate information on footfall, peak times and peak days of the week. Installing RFID chips integrated with in-store tracking can help with gathering data on how shoppers interact with products. Facial scanning can determine the age and gender of a shopper, providing an opportunity to display a targeted message or an ad (there are some privacy issues with this, however, so solutions like this should only be implemented with an individual’s explicit permission).

Modern technology allows for a wide array of creative and practical ways to use technology – for example, an online retailer of any size could launch a pop-up store that works on a similar principle to the fitting rooms: they would offer just one sample of each product and customers would be able to buy the products through the computers or tablets available in-store – perhaps with a next-day delivery, if a customer sees it as more convenient. This kind of strategy allows customers to make an online purchase while at the same time having an in-store experience, and an extremely valuable, real-world contact with a brand and the values it represents.

The pop-up store can also be a social experience – a place can be set up so that there is an opportunity to takes photos displayed directly in the store, perhaps even on digital screens, or on the store’s social media channels. This encourages customers to take pictures in-store, send them out for the whole world to see, serves as a fun experience (especially if the store is themed and branded in a unique and interesting way), and ultimately – creates the buzz on social media, which serves as additional and very effective merchandising.

On the flip-side, some pop up stores do not have to be full of flashing lights, giant screens or licensed intellectual property to be effective. A fun experience can be what makes or breaks a pop-up store – an example could be the Snap Spectacles pop-up shops that started cropping up in the United States over the past several months. The shops have a very minimalistic design, with sparse furniture and not much else besides that – but queues of hundreds of people lining up were enticed by the “Snapbots” – vending machines offering Snapchat’s unique, branded product for their social network. In this case, it was the novelty of the shop, along with the hipness around the product, both ensuring an unprecedented customer experience, that resulted in a constant stream of consumers, eager to make an immediate purchase.

Technology can be employed in various other ways, however: an American toy retailer, Toys-R-Us,  has placed advertisements in airports, featuring QR codes that – when scanned – provided prospective clients with an opportunity to order toys and have them delivered to home. Another example would be Tesco’s Korean virtual pop-up trial: the British retail giant allowed commuters to scan QR codes on wall murals with images projected onto them so they looked like supermarket shelves – the groceries would then be delivered directly to the customers’ homes. One thing that is certain, is that the the pop-up stores, used to test omni-channel strategies, introduce rich customer experience, increase presence on social media and enhance brand-awarness, have a great days ahead over the coming years.