How do you define pop-up retail? Over the years, the concept has encompassed everything from here-and-gone holiday shops to big-brand test stores, and is still evolving. While pop-up shops are a relatively new, though quickly growing brick-and-mortar concept, they’re already a big business: Pop-up shops were worth an estimated $50 billion in 2016, according to social media marketing company PopUp Republic, and are likely worth even more today.  

While temporary retail leases have long been a part of leasing strategies in shopping malls, the popularity of pop-up shops in both new and traditional retailers has brought forth a host of additional opportunities for brick-and-mortar retail. And for retailers looking to reach new audiences, drive more traffic and expand their footprint, pop-up shops are an integral part of omnichannel retailing. 

ENTRY POINT FOR START-UPS

Pop-up spaces and short-term leases in traditional retail spots have been an attractive entry point for new brands that are looking to establish brick-and-mortar presence but lack the funds or audience to sign a long-term lease. Many online-only retailers have relied on short-term pop-up shops to segue to their first brick-and-mortar spaces.  

Though pop-ups were initially associated with new retail and restaurant brands, they now also are used by large-footprint national tenants to test new markets and product lines. Major sports and activewear brands like Reebok, Adidas and Lululemon have leveraged short-term pop-up stores at key events like marathons or sporting events to test products and services on core customer groups. Such pop-up strategies allow brands to capture key data and insights on consumer preferences, while minimizing leasing costs. Casper, an e-commerce mattress manufacturer, launched pop-up locations (and a permanent store) for potential customers to test its mattresses in semi-private nap rooms. Pop-ups also allow retailers to experiment with new ways of leveraging technology, both client-facing and behind the scenes, to enhance customer experience.

And the strategy is working. According to CBRE’s 11th “How Global Is The Business Of Retail?” report, restaurants and coffee shops make up 25 percent of all new retail openings in 2017—the highest percentage for any retail category—proving that there’s still a viable path to brick and mortar. 

UNIQUE MARKETING OPPORTUNITY

Pop-ups are also being used by brands as part of a multi-channel marketing strategy. With a short-term lease, companies can create the element of surprise, as well as a sense of urgency and excitement for customers.  

By combining pop-up stores in unusual locations with social media campaigns to create buzz, companies can successfully tap into new markets. Zipcar, the car-share service, used a San Francisco pop-up shop to draw in customers and distribute exclusive coupons for future Zipcar services. Celebrity Kanye West famously used a New York City pop-up shop to sell merchandise and promote an upcoming music tour. It cost less than a full-blown advertising campaign, created substantial press and generated significant revenue—and only lasted for two days. Across categories and brands, pop-ups have emerged as an effective marketing strategy to garner attention and attract new customers. 

CHANGING LANDLORD PERCEPTIONS

As short-term leases with high volume of turnover, the pop-up trend hasn’t always been favorably viewed by landlords. However recently, owners are beginning to view short-term retail tenants as an integral strategy in driving new kinds of traffic and sales to struggling shopping centers. Landlords Westfield and Simon Property Group are both embracing these concepts and carving out space for short-term retailers. No longer seen as space-fillers during unexpected vacancies, pop-up shops are now acknowledged as a smart way to roll out local brands, offer demonstrations and give shoppers a specialized selection of products. 

As online-only and traditional retailers both find more and more ways to incorporate pop-up shops into their brand strategies, consumers have more access to a wider variety of brands and products. By embracing this trend, landlords and retailers can find a mutually beneficial relationship that employs the strengths of both omnichannel and brick-and-mortar retail.

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