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Limited Edition Retail

BY Connie Robbins Gentry

There is no escaping the pop-up or temporary store phenomena — and with retail vacancy still high in some markets, it’s not likely to go away anytime soon. What’s more, consumers seem to love them. 


While a few critics are grumbling that the proliferation of pop-ups has taken away from their impact, they are in the minority. Most experts agree that, as a retail platform, the temporary format has real staying power. 


“I don’t believe that pop-up stores have run their course — on the contrary, I think they’re in their infancy. Pop-ups offer great opportunity for innovation and will continue to progress and become a regular part of a brand’s format options,” said Scott Jeffrey, chief creative officer, Interbrand Design Forum, Dayton, Ohio.


There is a great deal of variation within the temporary-store space. Some pop-ups exist mostly to generate brand buzz (Target has mastered this strategy) and connect with customers, others to test new markets or new products. Pop-ups with extremely limited life spans are typically birthed and executed by the retailer’s marketing department. 


“Pop-up stores [of this type] tend to respond to a marketing need or product launch; the primary objective is to create market awareness and build the brand. In many ways, pop-ups are 3-D marketing,” said Ken Nisch, chairman, JGA, Southfield, Mich. 


Conversely, pop-ups of the seasonal variety, such as a Halloween store, are more about the merchandise and the moment. Such stores are created primarily to sell product and maximize holiday sales. They also allow retailers to test new formats or locations. 


The lines blur, however, when seasonal retail embraces the speed and marketing panache of the more dramatic, event-oriented pop-up concept. In fact, many retailers define their stores as both seasonal and pop-up. 


Burlington Coat Factory, Burlington, N.J., fits into this category, with the 20 “seasonal pop-up coat stores” that it opened in 12 states last year. The stores, branded Burlington Coat Factory Select, ranged from 5,000 sq. ft. to 10,000 sq. ft. with assortment limited to coats and outerwear, opened in early to mid-November and closed at the end of the winter season. The company plans to repeat the pop-ups this season, but has not announced specific locations. 


Toys “R” Us also has a recurring seasonal pop-up concept. The chain opened approximately 90 Toys “R” Us Express stores for the 2009 holiday season and 600 Express stores in 2010 in malls, outlet centers, street locations, strip centers and outdoor lifestyle centers nationwide. Toys “R” Us uses the seasonal platform to test different real estate formats.


“We were particularly pleased with the foot traffic at our Express stores in outlet centers [during the 2010 holiday season] and determined they presented a viable year-round business opportunity for the company,” said Katie Reczek, spokeswoman, Toys “R” Us, Wayne, N.J. “We have opened 12 [permanent] Toys “R” Us Outlet stores nationwide, with additional locations scheduled to open later this year.” 


Weighing in sales performance, space availability and other factors, the Express stores also give the company a good indication of whether a more permanent location is warranted. Of the 600 holiday stores Toys “R” Us opened in 2010, 68 have remained open. 


Real estate rules: Location always matters, but the real estate strategy for a pop-up store is quite different than for a seasonal store — the latter concept is typically governed by opportunistic real estate decisions dictated by availability and lowest cost. Pop-ups, on the other hand, tend to go for high-profile settings. 


“You won’t see pop-ups in second-tier real estate, only in prime locations that generate maximum traffic,” Nisch said. 


Christina Norsig, CEO of PopUpInsider, an online exchange that connects retailers with landlords seeking to lease space on a short-term basis, is both a pop-up consultant and retailer. Each year, as the founder and CEO of eTableTop, an online seller of decorative accessories, Norsig searches out vacant spaces in Manhattan to turn into holiday pop-up showcases for her brand. For Norsig, the right real estate positioning has enabled eTableTop to better connect with its customers. (Norsig is the author of the recently published “PopUp Retail: How You Can Master this Global Marketing Phenomenon.”) 


The list of those who want to open a pop-up store run the gamut from exclusive European manufacturers to mom-and-pop entrepreneurs. But Norsig added a cautionary note.


“The best candidates to open a successful pop-up store are experienced retailers who know how to run a business,” she said. “Just because it’s temporary, doesn’t mean it can be less professional.”


Success with pop-ups hinges on selecting the optimum site and making the most of the space. 


“The most successful pop-up stores leverage existing architecture — start with an interesting skeleton space and build on the bones to showcase your brand,” said Interbrand’s Jeffrey. “It helps to choose a space that will serve the brand and has inherent interest in and of itself.” 


Most pop-up stores rely heavily on graphics and signage, according to Jeffrey.


“You actually don’t want the space to look permanent because you want to communicate a sense of urgency,” he added. 


In terms of execution and design, a pop-up has to be able to open and close even more quickly than a seasonal store. Toys “R” Us typically spends a week opening each of its holiday Express stores and another week to close each location. 


By contrast, brand- or event-oriented pop-ups can sometimes open and close in a matter of hours, as was the case with a Smart Car pop-up. Created by Interbrand Design Firm, the entire store, which included three Smart Car coupes, traveled in a single trailer that quickly converted into a pop-up at road shows around the country. 


When it comes to investments, budgets for pop-ups are typically less restrained than for seasonal stores, which tend to focus on modularity and logistical simplicity, JGA’s Nisch said.


“Fixtures are often stored and reused the following year for seasonal stores, but pop-ups may rent theatrical lighting or media equipment because the store won’t be repeated in the same location,” he added. 


Similar to marketing or public relations campaigns, Nisch said, “pop-ups are measured in terms of cost per impression versus seasonal stores that measure costs as a percentage of sales.”


Indeed, it’s not uncommon for a pop-up to drop > $10,000 to $15,000 to finesse a tiny space for a 10-day run. 


“Everyone wants the perfect little 1,500-sq.-ft. clean vanilla box with [immaculate] walls, lighting and HVAC, but those are few and far between,” Norsig said. “Realistically, you have to consider difficult spaces in prime locations — and then think creatively.” 


Future: Looking ahead, Norsig believes pop-ups will come and go even faster than they do today — think Flash Mob translated into Flash Marketing via pop-ups that exist for mere hours.


Interbrand Design Forum’s Jeffrey envisions “great opportunities for the Amazons of the world” to open seasonal pop-up showrooms in vacant shops. Similar to Norsig’s strategy with eTableTop, online retailers might utilize pop-ups as an opportunity to connect with customers while maintaining their fundamental business model of displaying product to be ordered and shipped rather than running inventory through the store. 


JGA’s Nisch suggested that the next opportunity to leverage real estate value might be for premium malls to dedicate two or three vanilla spaces as permanent pop-up venues, leasing them for brief periods to a diverse mix of tenants that would create buzz and excitement in an ever-changing rotation of retail. 


Pop-up stores are also moving online. Flash sales site Fab.com is launching online pop-up stores with a series of themed retail “shops” inside its site. Fab is working with Fast Company on its first pop-up shop, called U.S. Design, which will showcase the work of some 76 American designers featured in Fast Company’s iPad app. 


The shop, curated by Fast Company and hosted by Fab will stay open a month and will feature about 150 items. But that’s just the beginning. Fab hopes to launch about five online pop-up stores by year-end.


Connie Robbins Gentry is a contributing editor for Chain Store Age.

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Driving Efficiency 
Survey shows retailers are setting goals, taking actions to improve energy efficiency, lower costs

BY Bill Schaphorst

Energy cost savings, government incentives, and customer attraction and retention are driving energy efficiency in the retail sector, according to the results of the fifth annual global “Energy Efficiency Indicator” survey. The survey of nearly 4,000 building owners and operators representing 24 industry segments worldwide was led by Johnson Controls’ Institute for Building Efficiency, the International Facility Management Association and the Urban Land Institute.


According to the report, energy management is important to every industry the survey represents. For members of the retail sector, 28% agreed that energy management was important to their organization, and 35% reported that their organization will pursue green building certification in the next 12 months. 


Other questions elicited responses that indicate a growing interest on the part of retail professionals in energy management, with 50% reporting that their organizations have an energy-reduction goal. In addition, 72% said they are paying more attention to energy than they did one year ago.


Even more encouraging, the survey showed that as many as 80% of respondents in the retail sector have invested in energy projects, and 91% have taken actions to reduce energy use in the past year. 


The top two reasons for these actions align with those of global respondents — energy cost savings and government and utility incentives and rebates. However, the third reason — customer attraction and retention — ranks much higher for the retail sector than other survey respondents. This suggests that retailers are responding to customer interest in energy efficiency with energy-saving goals and projects in an effort to retain and attract business.


But even as retailers take steps to improve energy efficiency, they report barriers to their success. Agreeing with global respondents, 30% of retailers cited a lack of funding to pay for improvements as the leading barrier, followed closely (25%) by an insufficient payback or return on investment. Another 14% regarded uncertainty about savings/performance as a barrier, while only 8% pointed to a lack of technical expertise to evaluate or execute projects.


Tools to overcome these barriers exist, and the survey suggested retailers are using them with increasing frequency.


As technology develops and becomes less costly to integrate, more retailers are inquiring about energy monitoring devices and control systems. And retailers that operate smaller facilities are taking advantage of economies of scale, grouping facilities together as they pursue energy-efficient strategies.


The survey showed that less expensive lighting technologies (energy-efficient bulbs, lamps, ballasts and fixtures) are popular with retailers, with 73% making lighting improvements in the last 12 months. Another 63% reported making improvements to their heating, ventilation and air-conditioning systems and/or controls during this same period.


In addition to technology changes, organizational changes are challenging barriers to energy efficiency. An analysis of the nearly 4,000 responses revealed four factors that correlate with more energy efficiency, clean energy and smart building actions. Of the four, adding internal or external resources and using external financing are helping global respondents in general (54% and 58%) and retail respondents in particular (44% and 48%) overcome financing and payback barriers. 


The remaining two factors, ranked one and two globally and for the retail sector, include setting a reduction goal and analyzing energy data frequently.


The survey makes it clear that retailers face significant barriers to energy management. However, survey results also indicate that despite these barriers, retailers are setting goals and taking actions to improve energy efficiency, reducing energy costs and attracting customers in the process. 


Bill Schaphorst, director of retail, Johnson Controls, a global diversified technology and industrial leader, offering quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles (johnsoncontrols.com).

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Exclusive survey reveals that social media has growing importance for retailers

BY Katherine Boccaccio

Twitter and Facebook aren’t just for consumer networking anymore. 


With more and more retailers and shopping centers jumping on the social media bandwagon, Chain Store Age and Cleveland-based shopping center developer Forest City Enterprises surveyed CSA’s readership to find out where retailers are trending in terms of social media engagement and communication tools.


The results were telling. In the “How Retailers are Embracing Digital Technologies: Which Ones and How Fast” survey, conducted by Forest City and Chain Store Age with consumer research firm Alexander Babbage, Atlanta, respondents revealed that opted-in proprietary database communications are of paramount importance, both now and in the future. But, during the next 12 months, Facebook and Twitter, along with Web and mobile advertising, will jump considerably in importance — though not eclipsing proprietary databases and customer affinity programs.


More than half of the surveyed retailers (53.3%) said that opted-in proprietary databases are very important in communicating with their shoppers currently, and 57% said these databases would be very important a year from now. More than half said that frequent-shopper programs, opted-in databases, Web advertising and Facebook will be the most important forms of communication 12 months from now. 


Among the newer forms of communication, retailers felt that Twitter and mobile advertising would see the greatest surge in deployment within the next year.


“While retailers’ direct relationships with their customers remain their preferred link for communications, mall and shopping center owners clearly have a growing opportunity to complement those efforts through the use of social media, as well as more traditional tools,” said Jane Lisy, VP marketing commercial management, Forest City.


The survey suggested that category of retail clearly influences social tool selection. Specialty retailers were more likely than all other retail category respondents to say that Web advertising, Facebook, Twitter, organic online searches and magazines will be very important forms of communication in the future. Department store retailers, on the other hand, have a strong direct-mail bent, as 74% said direct mail is very important currently and 62.9% said it will continue to be very important in a year.


Quick-serve restaurants had the least amount of interest in opted-in proprietary databases, as just 36% would rank the medium as “very important” 12 months from now. However, the category is much higher on Facebook; half of the quick-serve operators surveyed said Facebook programs would be very important in a year. Interestingly, the biggest Facebook fan category was home improvement, as 60% of home-improvement big-box stores said the medium would become very important. Least interested in Facebook? Sit-down restaurants (33%).


It was no surprise to find that the overwhelming majority of retailers have online sales. Eighty-three percent do at least a portion of their sales online, but again the degree varied widely by retail category. 


Among retailer types, discount department stores attributed the highest percentage of their sales to online, with 14.3% saying that more than half of their total sales are conducted online. Among specialty retailers, just 8.3% said that more than half of their sales are currently online sales, but this number more than doubles when > 
looking ahead — 19.6% forecast online sales will represent more than half of total sales in five years.


No matter the tenant category, the research revealed that mall owners have huge opportunities when it comes to social media programs. When asked what landlord-provided programs were most desirable to tenants, more retailers (33.4%) ranked customer affinity/frequent shopper programs at the top of the list. 


Web advertising, free mall Wi-Fi and opted-in property e-mail database closely followed frequent shopper programs. Facebook, mobile advertising and Twitter rounded out the list of landlord programs that could sway a tenant to select one mall owner’s property over another.


“Since customers use smartphones to hunt for deals when they’re on-site, Wi-Fi access will continue to grow in importance as a customer amenity for shopping center properties,” Lisy said. “In addition, retailers are recognizing the benefits of leveraging shopping center customer databases to connect with customers.”


Retail respondents were quick to point out that the onus is on themselves, not on landlords, to push social media programs forward. Compared with the 47.8% who said customer affinity programs are currently very important internally and the 58.8% who said these programs will be important internally 12 months from now, it appears that retailers are less likely to look to landlords for this type of program and more likely to put a priority on their internal affinity programs.


But, that shouldn’t make the programs any less of a priority for landlords, according to Lisy.


“Although we’ll always be fundamentally brick-and-mortar, we’re working hard to use the power of digital communication to maximize value for our retail tenants,” she said. “Web and mobile advertising, free Wi-Fi, active Facebook and Twitter connections and innovative programs like the Shoptopia Network (Forest City’s customer affinity/frequent shopper program) are becoming almost as common expectations among potential tenants as property maintenance, marketing, security and frequent shopper programs.”


As retailers continue to add social media such as Twitter and Facebook and mobile advertising to their communications arsenals in order to more effectively engage their customers, mall owners will at the very least need to follow suit — if not lead the social media pack — in order to form landlord-tenant synergies designed to positively impact the bottom lines of each.


For a copy of the complete survey, visit alexanderbabbage.com/ChainStoreAge/Study.htm.


[email protected]

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S.Anderson says:
Mar-21-2013 11:55 pm

Actually I don't think one needs a survey for that. We can all see on our social media profiles how fast things change. I had people asking me what is the cloud, I guess part of the answer is explained by social media as well.

S.Anderson says:
Mar-21-2013 11:55 pm

Actually I don't think one needs a survey for that. We can all see on our social media profiles how fast things change. I had people asking me what is the cloud, I guess part of the answer is explained by social media as well.

N.Spotcheckbilly says:
Jan-31-2013 06:48 pm

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N.Spotcheckbilly says:
Jan-31-2013 06:48 pm

Good article. This will help to use it to learn and continue to maintain such a good job, of course, and I'm looking forward to see more of your articles. perruques pas cher Perucken

C.Floz says:
Nov-30-2012 12:01 pm

Yes, the opportunity is there. It is up to us how to take advantage of that opportunity. - Arthur van der Vant

C.Floz says:
Nov-30-2012 12:01 pm

Yes, the opportunity is there. It is up to us how to take advantage of that opportunity. - Arthur van der Vant

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