The constant connectivity that consumers experience makes it harder for retailers to stand out because it increases competition to the point that having a unique product or service isn’t always enough to be noticed. The defining factor becomes the customer experience, so much so that some projections expect experience to completely trump price and product as brand differentiators by 2020. One of the latest trends to break out of the mold, defy expectations, and capture consumer attention and loyalty is the retail pop-up store.
To put it simply, retail pop-up shops are temporary locations (usually used for no more than three months but sometimes for as little as a day depending on format) that put hyper-attentive focus on unique experiences. What a pop-up store looks like can vary quite a bit: some brands take note from the popularity of food trucks to make mobile shopping locations, while others inhabit more traditional looking spaces like kiosks at the mall or full brick-and-mortar storefronts. The pop-up shop is intended to be disruptive retail, though, and that means that as long as a space can be legally used for retail and a business can attract customers, the pop-up space could look like anything and appear anywhere from a busy street in New York City to a display section within another store. Pop-ups aren’t limited to very small or niche businesses, either.
The Big Trend in Getting Small
With the pop-up industry hitting more than $10 billion in sales, and the cost of launching a pop-up costing 80% less than a traditional retail location, it should be no surprise that major big box powerhouses are taking advantage of this burgeoning format. Amazon — which is already making brick-and-mortar inroads with bookstores, Amazon Fresh, and upcoming Amazon Go offerings — is set to open 100 pop-ups in 12 states nationwide. The format is also attracting other e-commerce brands that are already tapping into disruptive retail habits; Birchbox, for example, went on a national tour in 2015 to engage customers directly, amp engagement between customers and products, and take the brand to the next level. Even powerhouses like Target that tend to dominate or anchor physical shopping locations have gotten in on the action: Target temporarily opened a Bullseye Bazaar (bazaar deals on items all day long) in-store and a Bullseye Bodega, which offered Target items such as accessories, beauty products, clothes and home goods, stacked close together on the shelves like canned goods in a grocery store (rather than their typical store layout), in empty storefronts on the streets of New York.
Why tap into the pop-up industry? Customers crave experiences over tangible items in general and sensory experiences specifically. About a third of pop-up shoppers look for convenience, a fun experience, and unique or localized assortment of products. Connecting with customers this way can yield surprising results. For example, Rent the Runway, a company that allows consumers to rent designer clothing pieces for special occasions at a discounted price and send back after the occasion is over, experimented with a pop-up location that led the brand to realize that for as popular and successful as the purely digital model was, physical locations offer a 20% higher average order value..
Answering the Customer Demand for Sensory Experience
The fact that the way customers shop is changing is undeniable, but what brands could easily miss is that customer desires are changing too. Consider that in 2015, air travel hit record sales, and the fickle restaurant industry outstripped retail by growing a robust 8%, while retail itself saw meager holiday sales. Millennials alone would spend $750 each on media including streaming services such as Netflix or Spotify, and video games. And yet 57% of consumers made their last discretionary purchase in-store, according to a 2016 Shopper on the Street survey, and most stated that a major factor for this is that they valued the ability to handle products and talk to associates. According to another survey, 29% of customers prefer shopping with minimal effort.
Pop-ups allow you to capture these customers by tapping into truly experiential marketing. Of course, that means taking advantage of a host of tools. For example, sales associates need to be armed with data, likely through mobile devices. That’s because while many customers believe they know more about the store, product, or service than the associate does (48%), nearly as many (38%) also expect the associate to already be aware of what the customer has purchased from the brand both in-store and online. Merging the digital with the physical can reap rewards as well: in-store elements like digital signage and smart-mirrors can capture attention while enhancing the customer’s search for information and feedback. (25% of shoppers prefer a connected experience, and 40% of shoppers access product information and reviews from mobile devices while in the aisle.)
How to Effectively Use a Pop-Up Store
With these changing customer preferences in mind, it’s important to remember that it’s not simply enough to open a temporary retail location. Pop-ups require something special to make them resonate with customers.
Location, Location, Location
As we mentioned, a pop-up store can go up almost anywhere, so select something that makes sense for your brand and will amplify the experience aspect. If a lot of your customers are in college, a pop-up on campus could be a huge hit, whereas, if sports or music fans are your core demographic, setting up outside (or potentially even inside) a sports arena or performance hall could be a big attractor. For example, Coca-Cola took Diet Coke to the Culinary Institute of America to kick off its Live Tastefully campaign. Alternately, select locations that can expand your customer base. For example, Seapony Couture opened pop-ups in various San Francisco neighborhoods to expand their demographic reach.
Go Simple or Go Big
The pop-up format is extremely flexible. NesCafe’s free coffee tent was very basic, straightforward, and clean. By providing a space that was easy to move through and no frills, it appealed to busy pedestrians that wanted a fluid experience. Meanwhile, SC Johnson Glade pulled out all the stops for its “selling feelings” pop-up, which featured a labyrinth of experiences tied to scents. Similarly, Factory360 and Boohoo crafted a full event within its pop-up, providing everything from complimentary food and drink to DJ competitions, pampering (manicures and hair styling), and meet-and-greets with minor celebrities from The Bachelor. The temporary nature of a pop-up location provides a level of freedom to create truly unique and memorable experiences.
Allow Customers to Inhabit the Experience
The point of the pop-up is to give customers a space to experience your brand hands-on. Sometimes that can be as elaborate as the Glade feelings boutique we mentioned above, but even if a business doesn’t go that far, customers should be able to handle products, demo services, and try on apparel to provide a sensory experience . Another option is to connect with the brands that distribute through your retail location and develop gift bags, samples, or giveaways promoting their products.
Market for Pop-Ups
Because pop-ups are non-traditional, taking extra measures to ensure that people know where and when to find the shop will grow your footprint. Social media is another arena borrowed from food trucks: by generating the right buzz among your customers, the news will spread quickly via digital word-of-mouth and point customers directly to you. This can be enhanced by offering in-store sharing opportunities. Traditional marketing is just as useful; just be sure to build in enough lead time to ensure the strongest impact.
Tips and Tricks
- Explore bold visual merchandising to create effective displays with interesting focal points, so you’ll capture attention on the street.
- Pay attention to lighting, both for displays and within the pop-up itself. Mood lighting is great until it interferes with a customer’s ability to understand your product.
- Remember the Rule of 3 and build symmetry in your displays.
- Don’t be afraid to think outside the box. Weird can be engaging, as with the Where the Wild Things Are pop-up.
- Exclusivity can offer huge gains. Create a limited pop-up event and restrict invitations to loyalty members or regular shoppers to enhance your relationship with these qualified customers.
Whether you want to dip your toes into a new market, give consumers something to talk about, or simply find new ways to enhance the way your customers experience your brand, retail pop-up shops have a lot to offer. By using the tips we’ve outlined above, you can leverage the pop-up store to stand above the crowded retail industry.