With the ability to create a different shopper experience, pop-up stores are changing the retail property landscape.
It seems that everyone from Kanye West to online retail giants Amazon are jumping on the pop-up store bandwagon. The term was first coined in 2004, although we saw signs off it at least seven years earlier, and since then we’ve seen its popularity grow and grow. So why are so many established brands adopting this apparently short term retail phenomenon, and how is the trend changing the retail property landscape?
At MAPIC 2015, the subject was addressed by a panel of well-known retailers and experts, who discussed the pop-up store’s ability to generate a customer experience. As Nicolas Jambin of Hopshop explained: “Pop up stores allow you to do retail in places like hotel rooftops, boats: it creates a shopper experience that’s different from what they’re used to.”
This experiential view of retail is what customers are coming to expect, and pop up stores allow retailers to engage specific customers in a targeted manner. Quickly customizable and time limited, they create a feeling of exclusivity that make them a ‘must-visit’ location while they are in operation.
Less Risk, More Profit
The trend is evident across the globe, with China recently embracing the pop-up store, allowing local businesses to compete with their western competitors due to fewer overheads. A key advantage of pop-up stores, and the reason for their initial popularity, is their low-cost model. Without the investment in a long-term lease, more retailers are able to test the waters before diving in and committing. Even existing businesses can benefit from the pop-up model. As Guillaume Lapp of Klépierre, European specialist of shopping centre, stated at last year’s conference: “our revenue from pop-up is doubling every year. We can do €4-6k per square metre with pop-up stores; often more than traditional retail.”
Disrupting the Traditional Model
One criticism of the pop-up model is that it prioritizes novelty and brand over product. All style and no substance. And while it’s true that there can be limits to the pop-up store model, for example lack of technological infrastructure, it does appear that the traditional model of renting retail space is no longer the only, or most desirable option.
However, recent data from the UK shows that the number of pop-up stores on the highstreet has fallen, and as a result there has been a sharp rise in unoccupied retail units. There is a likelihood that this will reverse as we head into the holiday season, and we will see a boom in pop-up stores before Christmas. There’s no doubt that the excitement created by pop-ups has helped regenerate both areas that had slowly been losing footfall and missing out to other new retailers or online sales.
Just as online shopping disrupted the retail business, pop-up retail is also having an impact. There will always be a demand for brick and mortar shops, and while customers certainly enjoy the experience of pop-up shopping, they also rely on the traditional model for their everyday purchases. There’s no substitute for physical, dependable stores, and more brands are understanding the value of human interaction to sell their products, for example Birchbox and Warby Parker, who used pop up stores as a bridge from online to offline before opening their flagship stores.
Pop-up retail is allowing more people to create businesses, reinvigorate what might have been wasted space and is revolutionising the concept of retail, by creating ‘experiences’ for customers as well as purchasing opportunities in a way that inspires, sparks imagination – and is cost effective.
.Originally from Global Real Estate Experts