If you are interested in retail, shopping, and the economy then you have recently read about many large stores closing down several of their outlets. Target opened 19 stores last year, but in 2105 it plans to close 19 stores. Sears/Kmart corporation plan to close many of their stores as well. From the sounds of it one would think brick-and-mortar retail is dead. Indeed, many of these stores are dormant and even a bit dead to consumers. The teenager Abercombie once appealed to has grown up and moved on. That consumer now has more sophisticated taste and doesn’t want to shop in a dark store with too loud of music pumping throughout. Nor do they need to be walking billboards advertising the stores brand name on their sweatshirt or t-shirts. One of the hardest aspects of retail is maintaining a relationship with the consumer over a span of years and life changes. It’s not easy to be a brand that clothes a person as a teenager and also when they are in their 20’s and 30’s. Some stores like J.Crew are adept at this, but it’s rare to find many that take a consumer beyond only a few years. Many retailers have not kept up with the times. Not only have they not kept up, they have not learned to adapt to their customers’ needs. It’s important in retail to have a sense of what your customer wants before they even know. That’s why Instagram is so popular and important. Buyers and designers for these large department stores need to keep their finger on the pulse of what is important. Consumers are glued to their phones and they love the most popular apps. Instagram is nearly more popular now than Facebook. Fashionistas are liking and saving products they see on Instagram. Take designer handbags for instance, if a consumer sees several Instagrammers with many followers showing off the same handbag, they want that handbag, too. Department stores and larger brands could take a cue from lesser known brands that are utilizing social media to leverage their products. These stores could open smaller in-shop areas to showcase up and coming designers and get more shoppers into their doors. These new eyeballs would result in more sales.
With many of these store closings one would think that storefronts will be empty, but in larger cities, that is further from the truth. Surprisingly, e-commerce is incredibly bullish with offline retail. E-companies that were once only available online have taken up brick-and-mortar spaces in the past few years. Rent the Runway and Warby Parker are a few of the e-commerce companies that have jumped offline to better serve their customers. Birchbox is establishing their own flagship. Bauble Bar has even debuted a new television commercial. It’s nearly a trend now for e-commerce companies to take advantage of vacant storefronts. One term we hear a lot is ‘pop-up shop.’ The term pop-up shop means a small brick-and-mortar temporary physical presence. We will discuss that more in depth in a bit. What is important to note is how internet born brands are also eager to hop off line. They recognize their shopper purchases both on and off the Internet. Many venture capitalists are going so far as to say that all shopping will only take place online in the near future. That’s a huge assumption to make. Look at any grocery store on a weekend or near the holidays; they are packed with shoppers. I will be as bold to say that there will never be a time when shoppers purchase everything online. It’s much easier to drive to the store for coffee than to wait for it to be delivered. There is a convenience with brick and mortar stores that online retailers still cannot match. In fact, there does not need to be such a competition between online and offline shopping. It’s ridiculous in a sense that the two need to be pitted against each other. Instead, there will be a way in the not too distance future where online and offline retail work in tandem with each other. In fact, they must reinvent a way to work together. If e-tailers need a physical offline presence, then stores also need an online presence as well. It won’t necessarily be a war between offline and online. That wouldn’t make sense at all. There is no dramatic death of traditional retail. However, traditional retail must evolve to the needs of consumers today. CEO’s of traditional retail stores will quickly realize they must make changes and evolve to continue a momentum of shoppers throughout their stores. These stores will develop a way to appeal to both offline and online shoppers. We will take a look now concerning online stores and how they are utilization vacant space in the physical world.
Pop-up shops or pop-up retail have been on the shopping scene for many years. The term started becoming popular and heard more and more in about 1998-2000. In short, pop-up shops are opening short-term sales spaces in vacant shops or buildings. Usually the leases and rents with pop-up shops are for a shorter time period compared to traditional stores that signed longer leases. In the early days, pop-up shops were seen as sharp, guerilla marketing. In short, they would occupy space or spaces for a short time and/or until product sells out and then close shop or move on to new part-time storefronts. Customers loved the idea of a short sell time in a store that would not be occupying its space for a long amount of time. It was a sudden rush of “I must have this product” and many shoppers felt the need to buy the products at these pop-up shops. Within a short amount of time pop-up retailing caught on across American and the UK. Over the past few years it seems those not familiar learned more about pop-up shops, but in reality, they have been around for a while; more than a decade. For smaller brands and businesses, pop-up shops let them test a market before signing expensive leases. Some pop-up leases can last just one day.
Many landlords are taking advantage of the pop-up popularity. Instead of signing long-term expensive leases, they are fine renting out their space or spaces for a short amount of time to small and large brands. Often landlords will let brands do whatever they want to the space as long as they turn it back to its original look. Pop-ups are not only popular with startup brands, even large corporations like Target are taking advantage of short term retail. To them it looks hip and cool. On the radar super-trendy shopping districts are most favored for pop-up shops. It has a cool element that traditional stores do not have. Many tourists to New York city for instance will research where the pop-up shops are located and put them on a list of shops to visit. Log on to Instagram and search the term #popup and you will find many temporary stores and shops across the globe. It truly is an international shopping experience. With so many consumers glued to their smartphones, pop-up shops are a way for brands to find their customers. For instance if a music festival like Coachella is happening, startups and larger retailers may offer their goods in a temporary space. This lets attendees see a brands products in person that they would normally only view on their website. Online brands especially love to follow their consumer wherever they may be, even if it’s at a concert.
It used to be that established brands could only occupy physical retail space. And then after they had many stores spread throughout the country, they would establish an online presence. Now it’s the opposite. The business model has change so that online only brands are able to secure fast space in the offline world. You will find brands like Warby Parker taking advantage of temporary spaces to offer goods to their customers in a more touchy feely way. Customers can try on their frames in person instead of order them and waiting for delivery. If you live in NYC, it’s a perfect way to experience Warby Parker in person. Customer aquistion online is actually more expensive than most realize. Unless someone knows to go directly to your website, how will they find your online brand? That’s why many of these online only brands hire expensive PR on a monthly retainer. PR gets the online brand out there in magazines and on some of the most important blogs. SEO is competitive and its very hard to find trustworthy people to help get your rankings higher on search engines. Even though retainer fees with good PR companies are expensive, there is often better ROI than worrying about finding customers through search engine optimization. Pop-up shops help relieve some of the worry of brand exposure and finding new customers. Think of all of the shoppers who will find your temporary brick-and-mortar digs in NYC, Chicago, and San Francisco.
Fast food trucks also lead the way for this second generation of pop-up shops. In 2009, the food truck phenom took over the nation. From New York to New Mexico food trucks were popping up in numbers. Each day they would move their truck to different parts of a city notifying would be customers via social media. On sites like Twitter and Facebook the trucks would let fans and followers know where they would be parked and what was on the menu. Taco trucks especially caught on like wild fire. Online only brands took notice of the food truck popularity. They wanted to be in front of a physical audience in a similar way. We call this era of pop-ups second generation because it’s actually a continued evolution of what became popular nearly 16 years ago. Although the concept has actually been around for centuries. Trade and commerce are not new.
On the opposite end of the spectrum larger retail giants such as Target want to be a part of the pop-up action. They see it as a buzz word if you will and don’t want to miss out. They foresee that the pop-up craze isn’t fading in the near future. Large retailers like Target have budgets to go into massive spaces such as vacant warehouses and completely transform them for an experience in shopping. Before the holidays for instance they may completely renovate the looks of an old sewing factory to lure in shoppers that may not necessarily shop at their main big box store. Pop-ups also allow more established stores to re-tell their story in a modern way. Remember, we now live in an area of 140 characters and our attention is held by fast snaps on Instagram without a lot of verbiage. Attention span is shorter than ever these days and retail is aware that they only have a small space to attract not only customers, but customers who will open their wallets.
In order to have a successful pop-up in this fickle time of retail, you need to clearly state your brand’s story in a short amount of time and make sure the brand mirrors the pop-up space. For instance if you are selling sparkly hats and headbands, don’t lease temporary space in a dark and dreary vacant store. And if you do, make sure to hire good renovators to make the space appeal to your buyers. Make the sure the location is easy for your customers to find. Don’t lease space in the part of a city people rarely visit. Also keep your end goals in mind. Make sure you keep an eye on ROI. Pop-up stores will remain popular with brands both big and small.
BIO: My name is Sophia Bennington and I write about the changing landscape in retail and e-tail. You can find my work published across several different platforms. I’m also a fashion blogger and you can see several of the posts I’ve written about PLIA Designs and their range of luxury designer handbags.