Pop-Up Power: Retail's Recession Invention
Right about the time monthly sales results for the nation's biggest retailers started sliding off a cliff, the word "pop-up" kept ... popping up. Target uses the pop-up stores to generate plenty of A-list buzz during New York Fashion Weeks.
For the Gap, Los Angeles-based pop-ups seem like a trendy (and low-risk) way to introduce new lines to demanding denim connoisseurs. Even elite brands like Gucci have been popping up around the world, introducing new designers, limited-edition collections or brand-new price points.
These temporary retail locations offer consumers the insider-y thrill of a sample sale and whiff of an unexpected bargain -- like a flea market or yard sale, from a single retail brand. We asked Christina Norsig, a pop-up pioneer and CEO of PopUpInsider, a portal that connects brands to the right real estate, to explain the attraction:
Q: What got you started?
A: I had been running an online tabletop business for six years, and I decided to open my first freestanding pop-up shop as a way to connect manufacturers with my customers, and it was so successful I started doing them regularly. I would call every company I worked with and say, "What can we offer good deals on? What kind of holiday items?"
One was in a vacant deli -- it was definitely fun and different. Another was in a vacant Payless Shoe store. So far, I've done eight -- four of them stand-alone, with rents ranging from $50,000 for a spot with a great view of Macy's Thanksgiving Day Parade to a wonderful location on Spring Street in SoHo that was actually rent free, provided we did some repair work. We turned it into a winter wonderland, and it was so pretty -- and right across the street from Chanel!
Q: What makes pop-ups such a good idea right now?
A: About 12% of retail space in this country is lights out -- it's a very depressed market. I just see a tremendous opportunity for companies to use this vacant space to their advantage.
Q: Are they good for landlords?
A: Well, you wouldn't want a city full of pop-ups -- we define them as anything with a lease of a year or less, and stores that are more substantial than, let's say, a kiosk -- and commercial landlords need longer commitments. But if the space is vacant anyway? And it is good for communities.
This last holiday, I opened a shop on 57th Street and Third Avenue, a block that is very depressed. I really felt like our shop was kind of a ray-of-light story. Yes, we drew tremendous traffic, but mostly I found the community was excited to see lights on in a space that had been dark for two-and-a-half years. All of a sudden, there is a tree with lights on in the window and commerce happening. It's good for surrounding businesses, and the neighborhood.
Q: What kinds of brands benefit most from a temporary splash?
A: I thought the way Target used the format to introduce the Liberty of London collection was a great example. For that particular collection, when you pour all of it into one small space, with such bright colors and prints, you can really see the beauty of a brand in a way you wouldn't in a larger store. Anyone who walked through that pop-up left with a real understanding of what the Liberty brand was all about. It animates the product, and sets it apart from anything else in a store.
Q: But it's also just a good way to boost sales. Toys R Us used it as a way to gain market share and generate revenue, taking over vacant mall space during the holidays.
A: Yes. And it's a marketing technique that is a little different -- something that might be too risky on a national scale. Plus, the fact that it is a temporary space creates a sense of urgency -- people want to buy now and not wait. I'm thinking of a high-end vegan brand of clothing from Europe that used pop-ups as a slightly more offbeat format to introduce itself here, doing event marketing, too -- positioning the shops near yoga classes and film festivals.
Q: What are the risks?
A: Negotiating anything on a temporary basis can be tricky, and the landlord really has to be on board. Malls tend to get the concept better than other types of landlords and understand that vacant space creates the kind of an eyesore that hurts all the shopping in the area. But there is a learning curve.
Q: Why do you think consumers like them?
A: There is a little bit of mystique. For my own shops, I have a big following and, last time, I didn't even do a mailer. I just put it on Facebook -- it was quiet and discreet. People can't wait to be the first one there.