Harnessing the Power of Pop-Up Shops
Pop-up stores are a retail trend that shows no sign of slowing down.
The ability to create a brick-and-mortar presence without many of the hassles that come with establishing and maintaining a permanent physical location has become an increasingly attractive option in recent years. The pop-up store concept has transformed into an estimated $50 billion industry — fostering new partnerships, experiential marketing opportunities and a unique way for retail brands to engage with their customers.
From established global brands to independent e-commerce merchants, retailers of all shapes and sizes are utilizing pop-ups as a one-of-a-kind way to experiment within the physical retail environment. High-end luxury brand Louis Vuitton recently generated lots of buzz by promoting its collaboration with skateboarding shop and clothing brand Supreme through the launch of a series of global pop-up store locations.
Retail giants like Nordstrom and JC Penney are also benefiting from the trend via in-store pop-up installations. By lending a portion of their storefront to a merchant like Sephora or Gwenyth Paltrow's lifestyle brand Goop, these retailers have the opportunity to drive in-store traffic while also attracting and engaging new customers.
It’s no wonder a wide range of merchants are looking to capitalize on pop-up shops. Not only do these temporary store concepts offer flexibility but they typically cost as much as 80% and come with far less risk.
Although short-term retail footprints are becoming a mainstay across the industry, that doesn’t mean embarking on the pop-up store concept – and making it successful – comes easy. To make the most of this temporary, limited edition retail offering, there are a few important considerations to keep in mind:
• Focus on Shopper Needs. The pop-up retail environment not only offers flexibility to merchants, but it presents the opportunity to revamp the shopping journey for customers. Part of establishing brand awareness and engaging with shoppers through a pop-up shop is making sure shoppers walk away with an experience they won’t soon forget.
Offering personalized promotions or equipping employees with tablets for looking up inventory, placing orders or even making payments will help merchants enhance their pop-up store offering. Adjusting marketing techniques and customer service tactics can also go a long way in enhancing the retail experience within pop-up environments.
• Keep Payments Simple. The size and format of pop-up shops can vary drastically depending on a variety of factors, including a merchant’s budget and design preferences. In many cases, having a traditional point-of-sale (POS) setup may not provide the flexibility needed to operate in a pop-up space. Rather than trying to incorporate traditional cash registers or checkout lines, many merchants are using pop-up locations as a way to experiment with modern payment options such as mobile wallets and tablet-based POS solutions.
• Get Experimental. Pop-up stores serve as a great way for merchants to test out new products or concepts. Whether a brand is looking to promote a new collection or showcase a unique collaboration, pop-ups create a sense of “limited time only” urgency that attracts and retains the attention of customers. By experimenting with new offerings within a pop-up, merchants also have the opportunity to get on-the-ground feedback and suggestions before taking on the risk of pushing out new products to a larger market.
The exclusive, unexpected and limited nature of pop-ups can offer merchants an alternative way to thrive in the rapidly changing retail landscape. Capitalizing on the trend requires finding the right pop-up model and strategizing to attract the right customers, all while delivering on the unique experience shoppers have come to expect.
Chris Francis is VP of market development at Worldpay US, a global payments provider for all channels: in-store, online and via mobile.
New centers hold higher costs for tenants
As 20th Century malls give way to 21st Century mixed use centers, retail tenants need to arm themselves against giving away too much away during lease negotiations.
That’s the caution of National Retail Tenants Association director Paul Kinney, who strongly advises retailers to consider both long and the short-term implications of the leases they sign.
“For tenants, this transitioning period means serious risk of overcharges from incorrect allocations due to expanded and reconfigured centers, or added uses which are more complicated and time consuming to keep track of and reconcile,” Kinney said.
Just as landlords have the freedom to change the mix of stores in their centers as trends shift, Kinney pointed out, so should retailers retain the right to employ a different name or merchandising strategy geared to a specific property.
The association chief added that establishing occupancy cost review processes is essential for retailers looking to avoid costs passed through in common area maintenance charges that are pooled and allocated with office and residential spaces in mixed-use projects.
“The retail of the future will look very different from what we see today,” Kinney said.
These and other crucial topics for tenants in a changing retail environment will be explored at NRTA’s annual conference beginning in New Orleans on Sept. 24.
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Post-Macy’s, Irvine Spectrum rebuilds
Irvine Retail Properties’ flagship shopping destination, The Irvine Spectrum Center, has demolished the 140,000-sq.-ft. Macy’s that opened there in 2002 and is erecting a new building in its place to accommodate up to 20 shops, according to a report in the Orange County Register.
Since it opened in the mid-Nineties, the Spectrum Center has established a reputation as a trend-setter. Its Edwards 21 Cineplex featured the nation’s first 3-D Imax theater. In 2006, it became the first retail center to house both a Target and a Nordstrom.
Spectrum Center focused on entertainment and expanded dining options early on, installing a carousel, a Ferris Wheel, and an ice-skating rink in the early in the early 2000s.
Its 50-odd eateries include Paul Martin’s American Grill, Tender Greens, and Pho Saigon Pearl, as well as Subway, Chipotle, and Johnny Rockets. Recently, it announced the expansion of its Curbside to Go program to six locations dispensing takeout orders from 21 restaurants.
Irvine is keeping mum about exactly which shops would inhabit the under-construction building. Its most recent lessees have included Reflections, Alex and Ani, Kona Grill, Pressed Juicery, BRIO Tuscan Grille, Del Frisco’s Grille, Umami Burger and TLT Food.