Why Pop-Up Shops Happen

Published on Dec 14, 2018 by Dan Melwani in Blog

Pop-up shops are no longer a mere business model; pop-up shops are an increasingly popular marketing strategy that’s popping into the hearts and minds of savvy brands all over the world. Online retailers, digital companies and luxury brands are replacing the traditional model of long-term leases by interacting with customers in-person through pop-ups.

1. Public perception has changed.

Perception creates reality. Just a few years ago, the connotation of the word “temporary” came with pre-conceived notions that a business had no budget. But the financial crisis of 2008 proved that pop-ups were the new way to play. Since then, public perception has continued to evolve.

For landlords, pop-ups are the most cost-effective way to stay in the retail game without the costs of a long-term lease. For digitally native brands, pop-ups are versatile and powerful. The shift in perception (and the rise in pop-ups) works in everyone’s best interest for three reasons:

  1. It saves on overhead and operational costs
  2. Less risk and unpredictability of the market associated with a long-term lease
  3. Clients make a profit.

The other upshot is that pop-up shops typically have social media campaigns (with hashtags and influencers) which the press loves to cover. Organic coverage coupled with a genuine love for your brand shifts public perception faster than you can say “remember the mall?”

2. America built too many malls

According to RetailDive, more than 1,000 department stores will close between now and 2023, reducing the total footprint by one fifth. When you couple this fact with the new reality that electronics and online subscriptions are taking market share from apparel, is there any real reason to drag ourselves to the mall?

Of course! (We’re so glad you asked). Even though shopping malls need reinvention, pop up shops that set up in a mall can bring exposure, foot traffic, and credibility. According to McKinsey:

Some malls are making greater use of temporary, flexible spaces that can accommodate different stores over time. Pop up stores, showroom spaces and kiosks provide customers with a sense of the unexpected and gives them a reason to treasure hunt.

Moreover, according to a study released by A.T. Kearney that identifies key trends in retail real estate, malls will transform into “consumer engagement spaces” that cater to consumers “less interested in owning things than in having experiences and accessing functionalities.”

Perrier pop-up in Soho

3.  Pop-ups activate the part of our brain that likes new things

The novelty of a pop-up shop doesn’t always drive traffic on its own. Pop-ups are typically part of an experiential marketing strategy, which taps into “massclusivity.” According to Trendwatching, massclusivity is, “a form of affordable premium consumption that combines the mass with the truly exclusive: tasteful, rare, experiential, compellingly stories, and more.”

Plus, many pop-ups shops happen in tourist havens like New York City. The city is filled with families who seek new experiences and want to make purchases. Pop-ups promote not only new things (like gifts!) but also new experiences.

4. Online and offline are converging

Online retailers are finding unique ways to personally connect with their customers – even the brands that have an exclusive online presence. Pop-up shops help to bridge the gap: Customers and all of their senses can now feel products that are typically only available online before they make a purchase.

Even though online shopping is fast and convenient, the tactile experience (especially for food and clothing) is becoming a lost art. The good news is that researchers are keeping tabs on the pop-up trend. University of Arizona researcher Sabrina Helm learned how consumers really feel in a new study published in the Journal of Retailing and Consumer Services.

According to Helm in an article in Science Daily, “Online shopping represents yet another shift in retail, but the difference this time is how much power consumers now have in affecting change through their choices and the feedback they’re able to provide retailers online.”

With so much data and information available today, the most successful digital brands are the ones that fuse the best of both worlds: The data from the online world can intersect with the offline world to create meaningful events and pop-ups. For example, Amazon’s 4-star store (72 Spring St) is a physical store but according to QZ.com, “it feels like a website.” Items are grouped by “Most-Wished-For,” “Highly Rated,” and “Frequently Bought Together.”

Pop-up shops benefit brands, customers, and business owners alike. What are you waiting for?

Browse the portfolio of our raw spaces here.