Benefits of Pop-Up Retail
It’s not easy to build and operate a successful retail space. This is especially true in desirable urban markets where long-term real estate investments can be costly. Here are five of the best reasons why pop-up stores are a smart and economical way for Direct-to-Consumer (DTC) brands to show up in the real world seasonally, or test the waters before opening a more permanent physical location.
1. In-market research.
What better way to understand the behavior of people who prefer to shop in stores vs. people who shop online than actually observing while they do it? Online children’s apparel brand Rockets of Awesome opened its first pop-up store in New York City last August to watch parents and children shop together for kid’s attire. CEO Rachel Blumenthal has a hunch that when families engage in a great in-store experience, shopping for clothes becomes a bonding opportunity that doesn’t happen in front of a screen: “More than anything, we’re just so hungry to learn and understand what the [parental] shopping dynamic is.”
2. Brand activation.
Lingerie merchant ThirdLove opened its first pop-up store in Manhattan this year. According to CEO Heidi Zak, “the store is partly a marketing tool, just as you would think about putting an ad on TV or running an ad on Instagram. You can experience the brand in real life and get an understanding of what it is.” Similarly, Toys“R”Us recently announced plans to resuscitate its nearly defunct brand in a pop-up partnership with CandyTopia, for “an all-new, totally immersive” experience for the 2019 holiday season. The Toys“R”Us Adventure is part store, part amusement park, and part photo op. It’s a brilliant temporary retail play to breathe new life into a 70-year old brand on the verge of bankruptcy, without investing a dollar in long-term leases or inventory.
3. Engage all the senses.
For many brands, allowing a customer to touch the fabric or smell a fragrance or see a product in a designed setting is the key to closing a sale, especially for first-time buyers. A Price-Waterhouse Coopers Total Retail study finds that complex or expensive products like mattresses or jewelry are easier to sell when customers can examine them in a showroom setting. Designer eyewear merchant Warby Parker is a pioneer among pioneers when it comes to direct-to-consumer brands and pop-up stores. Their first sales model involved sending glasses by mail for customers to try on at home, where they could keep or return any frames they didn’t want. But the company’s logistics were quickly overwhelmed. When people started coming by the office (a.k.a. the founder’s living room) to try on the merchandise, they knew physical and online channels together would be a powerful combination. E-commerce and mobile commerce are undeniably convenient, but convenience doesn’t always override the desire to try before you buy.
4. Better customer service.
Chat bots and referral engines are helpful, but limited when it comes to meeting specific customer needs. In fact, automation sometimes delivers frustratingly vague answers that do more harm than good. That’s why face-to-face communication is still the gold standard for customer service. Convenient locations to browse, the ability to handle cash sales, and bi-lingual sales support are added benefits of real people serving customers in real locations. What’s more, the e-commerce technology that first enabled online shopping is coming full circle to enable ship-from-store, buy-online-pick-up-in-store (BOPIS), and point-of-sale ‘webrooming’ options (browse online before purchasing in-store) that satisfy our need to research, see, touch and sometimes return the things we buy.
5. Experiment without breaking the bank.
According to Forbes, we’re in the middle of a radical shift in our economy towards smaller, more fluid real-estate options that facilitate our urge to share every new experience we have or product we see. In the Instagram age, everything — from shopping experiences to art installations — is here one day and gone the next. Some brands are taking advantage of ultra-short leases and seasonal pop-up shops to experiment with store concepts before they commit to a long-term brick-and-mortar play. Casper Mattress spent two years acquiring data from pop-up stores before opening 200 permanent locations. Using feedback from temporary showrooms, design teams made real-time changes to store layouts and merchandising before opening the doors for good. The ability to get the concept nailed down before launch allowed Casper to rapidly scale its permanent store model.
Pop-up Guidance Delivered
Online vs. in-store retail is a technology-driven phenomenon that has little to do with the way consumers think about shopping - it’s an outgrowth of the ubiquity of the Internet and e-commerce advantages (and disadvantages) over the past decade. Digitally native DTC brands are increasingly marrying online and offline as they realize the physical world is where their customers actually live and work.
Social media marketing agency PopUp Republic estimates that the U.S. pop-up industry is worth close to $50 billion. The keys to opening a successful pop-up shop are location, merchandising, and service that complements what customers already expect from digital direct-to-consumer brands. Brick-and-mortar retail requires a set of skills and capabilities that may be foreign to DTC merchants. Ask me how we can help, or visit us at www.curagroup.com.