BrainTrust Query: The Future is Temporary - Retailing in A Pop-Up World
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail Prophet Consulting blog.
The concept of pop-up retail has been around for more than a decade. Vacant, a company out of Los Angeles, is credited with pioneering the concept in North America after seeing similar concepts in Tokyo. They observed Japanese consumers lining up for hours to buy limited edition goods. Vacant further developed the concept into the current pop-up model whereby stores open for a defined period and then simply close, only to pop up later in a different location.
Until 2007, however, pop-up shops, while intriguing, were regarded largely as a novelty. The goal of most retailers remained long-term, favorable leases in locations with trusted consumer traffic levels.
The economic collapse of 2008 brought new opportunities. Landlords reeling from fallout in the commercial real estate market entertained previously unthinkable, short-term agreements for their space. From Los Angeles to the mean streets of New York, the economic meltdown spurred a brilliant series of unique and daring pop-up concepts.
Above all else, these concepts seemed to breathe new life into a retail industry that had become fat and lazy in the days leading up to the financial crisis. In a sea of sameness, these unique and fleeting pop-ups caught the attention of consumers and made retail interesting again.
Today, pop-up has become a legitimate channel strategy. Everyone from Walmart to Hermes has turned to these temporary formats to reach consumers where their full-line stores couldn't.
Entire cities have embraced the concept of pop-up retail as a means of revitalizing urban neighborhoods. One example, Oakland California's Pop Up Hood concept, offered six months of rent-free space to independent merchants to test out their retail concepts in designated parts of Oakland.
Technology is fueling more creative approaches. Net-A-Porter's recent launch of its Karl Lagerfeld line, whereby the outside of the store became a living interaction point for mobile device wielding consumers, is one such recent example.
What these and other concepts point to is an historic move away from retail being solely about established patterns of consumer traffic and purchase intent based on familiarity. The new consumer is seeking surprise and excitement from retail and is in many ways returning to pre-industrial revolution roots and the concept of the travelling market.
All of it points to the need for less (permanent) commercial real estate. It's logical to expect more retail chains to move to a mix of flagship (got to be there) locations and opportunistic, temporary installations to create excitement and capture sales. The commercial real estate professional of the future may be relied upon as much for their keen sense of guerilla marketing instinct as they are for their knowledge of the market overall.