With the high-touch, short-lived experiences of pop-up shops, brands have the opportunity to capitalize on a $50 billion industry
Pop-up stores are retail prestidigitation.
They’re here one second and gone the next, and they can make otherwise-ugly, naked storefronts beautiful. Customers swarm and social media mentions spike in the blink of an eye. The entire experience can feel as though it was brought to life by the tap of a magic wand.
Wizardry aside, pop-up shops serve some very basic marketing needs. The fleeting shops can introduce a consumer to a brand or provide a format for direct interaction with consumers. They pull in consumer data and provide an unique opportunity for fans to step into a brand encounter.
“Those high-touch experiences have always been part of any brand’s journey to go directly to a customer,” says Arati Sharma, director of marketing at Shopify. “It’s not a new phenomenon, but because retail is changing so much, pop-up shops are that new high-touch way of getting in front of your customer, client or consumer.”
What may be most magical about these ephemeral experiences is that they exist in the physical space between online and offline retail. They’re more fleeting than traditional bricks-and-mortar stores, but more tangible than online shopping. As Sharma puts it, today’s retailer needs to be omnipresent.
The pop-up shop industry was valued at $50 billion in 2016, according to statistics from PopUp Republic, a retail marketing database. These short-term shops are also softening the blow of a changing landscape; The New York Times reported that landlords are becoming receptive to short-term leases as traditional retail stores create vacancies across the country. One managing director of an upscale shopping center told the newspaper that “Pop-ups are a responsible way to grow.”
Not only are pop-ups a smart call on the business side of the equation, but the consumer experience they provide can be exciting. Sharma cites the sense of urgency as one of the key appealing factors for shoppers: It’s exclusive, and that makes customers feel special.
The intersection between responsible and exciting may be where the magic lies for pop-up shops. Marketing News explored a few different rhymes and reasons why brands engage in these physical, fleeting institutions.
Bringing Web-only to In-person
Food52, a community-focused food website, launched its online store in 2013, and it has since brought its products offline in pop-up shops.
“Food52 is a brand that really comes to life in offline experiences and brand activation,” says Emily Butler, the company’s vice president of marketing. “The initial pop-up was about extending the experience to showcase our products in real life.”
The brand’s community expects a very specific look from the company, and Food52 knew its pop-ups would need to mirror that design. Butler says the team starts with a larger theme, then the art director and stylist work together with the merchandising team, along with the shop and buying teams, to find what products make the most sense to be featured. In addition to physical commerce, the company also leverages experiences such as knife classes or on-site demonstrations from its product-makers.
One of the most recent Food52 pop-up shops revolved around the website’s Big Spring Spruce-Up. The effort focused on refreshing rooms for spring, a theme that Butler says allowed the team to create smaller experiences within the event that illustrated how to clean up and organize the home for springtime.
“We have quite a knack for making something like a wall of cleaning products look very beautiful,” Butler says. “We have great-looking products that also work really well. That’s the experience that we try to create at these various markets.”
During the pop-up events, the company collects customer information, learning how they heard of the brand or if they are first-time shoppers. Food52 also captures visitors’ e-mail addresses to send a follow-up and thank you, including a wrap-up of the content produced at the market. The company tracks new and returning customers and notes if the shoppers were acquired at the market and made their purchases online at a later date.
Some of the key data that Food52 gathers at its pop-up shops is far more qualitative than quantitative: The brand wants to see how its customers interact with its staff and its products.
“Talking to people in real life about our commerce is—as a truly digital brand—not an experience that we have every day,” Butler says. “Gaining those testimonials is really helpful for content production and for additional ideas to re-merchandise a product and show a different way you can use it.”
Drawing Attention to a Product or Service
Farm cooperative Organic Valley’s original plan was to produce a video campaign with an in-store experience to promote its half-and-half product; however, the company’s agency, Humanaut, decided to take it a step further and actually open a pop-up shop.
Thus was (briefly) born the Organic Valley coffee shop in New York City, a quaint little boutique with a very unique spin. Rather than ordering and paying for cups of coffee and allowing customers to add the creamer separately, the pop-up sold shots of creamer and let customers add the coffee.
“We’re going to go through the same amount of production and ceremony to pour the half-and-half and ring you up and set it out delicately for you,” says Humanaut Chief Creative Director David Littlejohn, comparing the pop-up to traditional coffee shop experiences. The Organic Valley coffee shop offered half-and-half in quantities of “a little bit,” “a double” and “a lotta,” a subtle nod to coffee shops with unusual product size names. “Once you have this half-and-half in your cup, you realize the coffee is actually off to the side in a metal carafe.”
Littlejohn says the reverse experience offered at the Organic Valley coffee shop—where the coffee was the afterthought—wasn’t just enjoyable for the customers, but it also got them thinking primarily about the creamer. He says the quirky concept shows Organic Valley doesn’t take itself too seriously, as the pop-up shop helped juxtapose the complexity of coffee culture with the simple nature of Organic Valley’s farmers.
“It was a hard thing to pull off, to get the tone right,” Littlejohn says. “We don’t want to make fun of customers, we don’t want to make fun of people who love coffee, and we don’t want to make fun of people who make great coffee. But there was something really funny in the preposterousness of a farmer trying to talk about his craft in the same way. There was also something that was surprisingly natural about it: discussing the origin of the grass that the cows are eating, the texture, the aromas, all these things do actually apply to your cream and your half-and-half.”
Organic Valley’s pop-up sparked an open dialogue with its customers. Organic Valley’s products exist primarily on grocery store shelves, but the brand-focused shop ignited a direct conversation between consumer and company.
“In many ways, making the brand … bigger than it normally is allows people to talk about it, express their feelings about it, in a new context,” Littlejohn says. “You’re not going to stop in a grocery aisle and have a conversation about how much you love Organic Valley; but in the context of being surrounded by your favorite restaurants and your favorite coffee shop down the road, suddenly you’re able to talk about Organic Valley in that same context. It helped us realize that these enhanced customer experiences are a great way to enhance the brand in people’s minds.”
Testing the Waters, Closing the Data Gap
A pop-up doesn’t always require a bricks-and-mortar space to exist. One such example is by REVEAL, a company that deploys small-format, 6-by-6-foot mobile boutiques that can appear anywhere from sidewalks to hotel lobbies, corporate lobbies, event spaces and more.
Founder and CEO Megan Berry says one of the reasons brands approach her company is for its geographic flexibility, something both brands and consumers have gotten used to in the digital era. It’s also ideal for those lacking in financial and human capital, as Berry’s firm can handle logistics, signage, salespeople and more.
“A brand may say, ‘We want to open up a new flagship, we’re looking at Southern California and Texas, but we don’t really know where to go,’ ” Berry says. “They’ll share with us their demographics, we’ll do a location analysis, recommend locations based on their goals—be it customer acquisition, marketing brand awareness or figuring out a location for a new store.”
In the simplest terms, by REVEAL helps brands become more nimble and responsive to hyper-local trends.
“[We’re living in] much more of an instantaneous economy and it’s always changing,” she says. “For retail to stay relevant, you need to stay a part of that change. Our solution as a retail channel helps brands, designers and artists be a part of that instantaneous economy.”
The data collection piece of Berry’s company is crucial. By REVEAL deploys its shops and collects data to test a fine-tuned thesis. For example, one brand that worked with by REVEAL had a top-selling handbag online, but learned its lowest seller online was actually a top seller in-person. The brand learned that to grow its physical presence, it needed to promote and stock more of one line than the other—a metric that proved important when the brand expanded into wholesale because it provided details not found in online and B-to-C data.
“Brands need to be more diligent now in understanding what, why or how a certain product or a certain collection is [performing],” Berry says. “We have a lot of young brands come to us with, ‘I’ve been in Vogue and my collection was really well-received, but now I’m having a difficult time with sales—why is that?’ ”
Berry says her company helps brands determine their target consumer, both at the customer acquisition phase and among the loyal customers who will keep coming back season after season.
Capitalizing on a Season
Holidays and seasons come but once a year, so many brands take advantage of these peak consumer events. Halloween stores spring up every fall selling contemporary masks, vendors hawk flowers around Valentine’s Day and mini holiday villages appear each November and December.
Gail Travis, owner and designer of women’s ready-to-wear brand New Form Perspective, has participated in both the Columbus Circle Holiday Market and the Grand Central Holiday Fair in New York City. The brand also has three bricks-and-mortar shops, but Travis still invests in pop-ups and likes the way they entice customers to participate in the time-sensitive shopping experience. There’s the obvious benefit of having more people interested in shopping during the holiday season, but she’s also learned it’s a way to gain an unusual type of repeat customer.
“I deal with a lot of tourists and a lot of those tourists come back at the same time every year,” Travis says. “Even though it’s a pop-up situation, I have a lot of repeat customers who live in Denmark or Italy. With the consistency of doing the pop-ups, customers get to know you and the venues every year. It’s a sense of loyalty, even if it’s only temporary.”
A PopUp Republic poll found 61% of shoppers list seasonal products as the main reason to shop at a pop-up store. The poll also found consumers are drawn to pop-ups because they offer unique services/products (39%), localized assortments (36%), convenience (33%) and a fun experience (30%). Each of these reasons reflect Travis’ own experience with holiday markets.
“People really like going to crafts fairs and supporting local artists,” she says. “As much as I’m still a small business, people who don’t know me look at [the physical stores] as a bigger company. In reality, it’s still a tiny business. I think that most of the clients just like knowing they’re supporting an emerging artist. When you’re in that bricks-and-mortar space, sometimes people may not look at it with as much respect. Even from a vendor standpoint, it’s more fun to see all these amazing artists around you doing well and being supported.”
A Little Something Extra for the Fans
One of the newer trends in pop-up marketing is celebrity-led. Participants include “Keeping Up with the Kardashians” star Kylie Jenner, who sells her makeup and clothing lines at her pop-ups, and hip-hop artist Kendrick Lamar, whose pop-ups sell merchandise from his tour.
The music festival Lollapalooza has taken a similar approach, placing pop-up shops outside its venue gates for anyone in the area to browse.
“We like giving fans as many options as possible to get their hands on the official merchandise,” says Stacey Rodrigues, marketplace director for C3 Presents, a concert promotion, event production and artist management company. “Even though [Lollapalooza] is four days long, fans may still have a hard time taking a break from the music to shop. There are always items that sell out on site, and the pop-up store gives folks a chance to grab those early. Chicago locals can save themselves the cost of shipping by shopping at the pop-up store, and we typically don’t offer the full line of goods online.”
Because the shop sits outside of the festival gates, anyone in town can pick up merchandise without attending the event. Rodrigues says the pop-up shops see a fair number of parents and grandparents purchasing merchandise for their kids who are attending the concerts. It also provides an opportunity for specialty marketing promotions and to offer exclusive items.
Anyone with knowledge of the music industry knows music sales aren’t quite what they used to be (Billboard and Nielsen Music’s mid-year 2016 sales data found 2016 was the worst year for overall album sales since Nielsen started keeping track in 1991). Finding new revenue streams has been more important than ever for artists.
“Merchandise has become an important revenue source as music sales have declined, and a pop-up store provides another outlet for that,” Rodrigues says. “It’s also an important branding tool. Some artists, like Kanye West and Justin Bieber, have generated enormous hype not only for their tours and album releases but also for their pop-up stores. It provides opportunities for more meaningful fan interactions through meet-and-greets, special giveaways, exclusive merchandise, etc.”
In addition to providing something extra for fans, the Lollapalooza pop-up shop drew customer insights for the festival as well. According to Rodrigues, the shop offered a prediction of what the best-selling items would be because it opened a week prior to the festival.
“We’re able to extrapolate from the sales and order additional items to be better prepared to meet demand,” Rodrigues says. “It’s helpful in another way that may seem minor but is actually critical to our sales success, and that is by more accurate tracking of sales by size.” C3 Presents uses a register system at the festival that logs what items are sold but not the size because that would slow down the transaction time, and speed is paramount in that environment. At the pop-up, however, C3 has the luxury of time. “When the bulk of your sales are t-shirts, accurate size breakdown can have a huge effect on your bottom line,” Rodrigues says.
Pop Goes the Success Story
Looking to launch your own brand’s pop-up shop? We compiled some tips from Melissa Gonzalez, chief pop-up architect at The Lionesque Group, and Arati Sharma, chief of marketing, offline and product, at Shopify.
- Know your audience, know yourself. “What works for a millennial is not the same as Gen X or Gen Z,” Gonzalez says. “Some [customers] are going to be digital natives, some are going to appreciate fewer tech challenges.” It’s also important to keep the brand’s voice present as well. “Everything has to go through that filter of, ‘Is this our voice? Is this our aesthetic? Does this translate who we are and the ethos of our brand?’”
- Look for short-term rent. “Don’t engage in a lease for a long time,” cautions Sharma. “Make sure you’re looking at other locations in a similar area and how much they’re charging for a space.” She recommends considering organizations such as thisopenspace that provide a sampling of comparative prices. “Do some research on where your customers are or where similar customers for your products are going to be before you spend a lot of money on a location like Brooklyn.”
- When it comes to your space, be creative. This is the company’s chance to put its brand front and center and control the brand story. “Think about how much you can afford,” Sharma says. “I’ve seen pop-up shops that look beautiful and they’re actually quite scrappy.”
- Consider the inventory. “Is this pop-up shop going to be for you to move your product and actually sell it, or is this just a brand play for you?” Sharma says.
- Have appropriate staffing. Gonzalez says this is one of the most important touch points at a physical space. If the company’s own employees are unable to be present the entire time, there must be an investment of time and money to ensure appropriate training of the pop-up store’s staff. “The last thing you want is a customer to walk in and get this great experience and then have someone who can’t help them,” Gonzalez says.
Sarah Steimer is a writer, editor, podcast producer, and yoga teacher living in Chicago. She has written for Marketing News, Chicago magazine, Culture magazine, the Pittsburgh Post- Gazette, and other outlets.