The pop-up store — what might have once seemed like a one-off awareness play for experimental brands — has become a more viable brick-and-mortar strategy, as the retail industry is expected to shutter doors at a faster pace than ever before.
The appeal of a 20-year lease has diminished in favor of flexibility, and understandably so. Credit Suisse projects a potential 8,600 long-standing stores will close this year, topping 2008’s 6,200 closures. At the same time, online brands, as well as brands that once relied on the visibility found in ever-declining department stores, are experimenting in the physical space, popping up for weeks- and months-long stretches. Oftentimes, they’re making use of now-abandoned former stores.
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The process of launching a pop-up is easier than a flagship store; analysts estimate that it costs around 20 percent of what it costs to launch a permanent store. But it’s more involved than just rolling in some clothing racks and turning on the lights. Pulling off a temporary space properly requires a strong brand vision, a nimble production team, a skilled staff, the right partnerships and the internal ability to digest what the Lionesque Group founder Melissa Gonzalez calls the impending “data dump.”
“A pop-up is no small undertaking, if it’s done right. A lot of moving parts have to come together,” said Gonzalez, whose company helps guide brand clients through pop-up launches. “Besides the budget, you have to have the know-how and bandwidth internally to understand what you want going into [the opening of a pop-up], and what to do with all the information you’ll have once it’s over.”
Prepping for a pop-up
For brands venturing into the pop-up space, what shapes the experience is whether or not the company expects to generate substantial revenue or if it’s willing to take a loss in exchange for sheer branding awareness. Brands have to carve out an initial purpose, said Gonzalez: Is the pop-up being used to test a permanent location? To capitalize on holiday foot traffic?
Eloquii, the trend-driven online fashion brand for plus-size women, wanted to provide a better in-store shopping experience for its customers, who are often overlooked by straight-size brands, when it opened its first pop-up store in D.C. in March. CEO Mariah Chase said that, from the get-go, the store was meant to be profitable and an avenue for overall company growth. That meant it had to look “nice, not ramshackle,” said Chase.
A pure-play brand launching a pop-up means it has to account for things like overhead, in-store returns and information funneling in from a new data channel. Many will work with vendor partners — like Lionesque Group, Boston Retail Partners or Appear Here — that find short-term lease agreements for brands. While a “plug-and-play” setup allows for less differentiation, it can be necessary for brands not wanting to blow huge budgets.
“The logistics of this are the toughest thing,” said Ken Morris, a partner at the consulting firm Boston Retail Partners. “It’s making sure there’s a process in place to move inventory around, account for returns, stage the equipment and product, and disassemble efficiently. You really have to have a supply chain to support this.”
For M.Gemi, a direct-to-consumer online brand for Italian footwear, its first New York pop-up was meant to serve as an extension of the digital brand, so it had to figure out how to stock its store with the same weekly product drops that are seen on site. In order to allow for a rotating set of items, M.Gemi decided to follow the showroom model of try in-store, ship to home. Ahead of launch, the company also built a mobile app for its sales staff to use to load product feedback forms for on-the-go customer surveys as they’re interacting with visitors.
Technology systems are necessary to analyze the traffic and interactions during a pop-up, and can raise the price tag. Gonzalez said that digital screens can run at $5,000 each, while a fully integrated RFID technology system can cost $35,000.
So brands often opt for design that has minimal construction elements and slip into former retail spaces that have leftover fixtures fit for an apparel store. Doing so let Eloquii focus on high-priority features, like a digital wall that streamed UGC content from its #XOQ tag. M.Gemi, which needs to keep a run of sizes on hand for each style, got creative by building storage space into the floor.
Understanding the aftermath
Just as existing customer data influences where a pop-up will be located and what inventory will be stocked, captured customer behavior during the run of the space determines what the brand learns from the experiment.
“The staff of a pop-up needs to be trained to dig deeper for customer interactions, because if you come away from it without that key data, you might not have much to show for it. It’s basically a focus group test.”
M.Gemi and Eloquii found that the customers who shopped in the pop-up stores proceeded to spend more online for the long term. Both brands are building out their retail presences: M.Gemi is opening a permanent store in Boston this summer, and Eloquii is adding two pop-ups, in Columbus and Chicago.
M.Gemi is also testing out a mobile pop-up this summer, spotlighting one style of shoe and taking it on an East Coast tour in a gelato truck. Birkenstock will test a similar model in the form of the “Birkenstock Box,” a module that will appear in Germany and the Hamptons with curated selections of sandals.
“We’re going to see more of this. It’s the theater of shopping,” said Morris. “It gets people engaged and is creative. That’s what the pop-up is made for, to bring excitement back to retail.”
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