Holiday pop-up shops – Are chains missing a big opportunity?
Pop-up shops have been around for years in one form or another, but they seem to be growing in importance, especially around the holiday season. According to a recent story on CNBC, pop-ups generate $2 billion in revenue around the holidays, appearing in locations from churches to malls and parks.
According to a survey from PopUp Republic, 61 percent of respondents shopped pop-up shops to find seasonal merchandise; 39 percent were looking for unique services or products; and 36 percent wanted to shop locally.
The Sacramento Bee reports that a new pop-up store called California opened on Black Friday in the Oak Park neighborhood of Sacramento, and features the creations of 40 merchants and designers. Ninety percent of the wide variety of merchandise is said to be Sacramento-made. The owners plan to change the name and theme of the pop-up space every six to eight weeks — the next iteration will be a pop-up wedding chapel.
Meanwhile, in New Jersey, according to The Village Green, the NJ350 Holiday Pop Up store was open in South Orange, but only for four days, featuring merchandise tied to the 350th anniversary of the founding of New Jersey, plus product from local artists. This store has been hosted by 15 towns for just a few days each. Artists get 100 percent of the proceeds, which is unusual.
Groupon has gotten into the act in Australia, according to DailyDealMedia, allowing customers to purchase merchandise in pop-up stores, or place online orders with Groupon and pick them up in-store. Naturally, Groupon is offering deals, such as 70 percent-off 20 "click and collect" products, with more added as the season progresses. EBay is opening a competitive store in Sydney.
In San Francisco, the San Francisco Gate says a variety of pop-up shops are open, from Amazon to eco-fashion brand Armour Vert. A collection offered at Makers Market includes work from 40+ artists and offers "meet and greets."
Other San Francisco pop-ups include El Marcado, a Holiday Market at Ghirardelli Square; California Optical Spectacle shop; Local Luxury Holiday Pop-Up featuring several well-known designers; and Amazon’s, pop-up, located in the Westfield San Franciso Centre near Bloomingdale’s, featuring Kindles, Fire tablets and other devices.
Many holiday-themed pop-ups are clustered together, and offering entertainment, food, charity tie-ins, and special events.
- Sacramento pop-up store plans to stick around – The Sacramento Bee
- PopUp Republic Launches First National Online Marketplace for Pop-Up Merchants – PRWeb/PopUp Republic
- Pop-up shops prep for winter sales lift – CNBC
- Weekend Deals: Holiday pop-up shops this weekend – AJC.com
- Pop Into the NJ350 Pop Up Store in South Orange – The Village Green
- Groupon Opens Pop-up Store – DailyDealMedia
- Unique boutiques pop up for holiday shopping – San Francisco Gate
Discussion Questions
Do you agree that retail chains seem largely absent from the holiday pop-up store trend? If true, why is that and what should they do about it?
Yes, it’s true that chains are on the “pop-up” sidelines, but probably with good reason. Most big chains would probably admit that they have more square footage than they need, and too many physical locations to begin with. At a point in their evolution where the big chains are trying to master the logistics of omni-channel more effectively, they would rightfully view a push toward pop-up locations as a distraction right now.
For many retailers, they are still trying to get the customer experience right in their existing stores!
Pop-up stores executed well take months to find the right locations and plan the execution. And even with pop-up stores, location can make or break the results.
If executed poorly, a pop-up store can very negatively impact a retailer’s brand. So most major retailers are not willing to take the risk and spend resources required for short-term pop-ups. However, for small shops and local retailers, pop-ups can be a great way to gain visibility in peak traffic periods.
With the Mall of America in my backyard I try to take a field trip every few months to see what brick-and-mortar retailers and brands are up to. The merchant carts that dot the mall raceway are busy. Brands are missing wonderful time-based opportunities with the seasonal and event-driven pop-up stores. The concept is made even easier to activate with all the mobile applications available for POS. The success of these pop-up stores is predicated on a coordinated and timely social media campaign to advertise the store’s presence—what, where, when and for how long. For the correct and relevant products and services this would be an extremely effective retailing strategy that noted retailers and brands should be taking advantage of.
I suspect we don’t see more of this is because it takes a coordinated effort and timing to make this approach successful. That would require the retailer and/or brand to recognize this as a supported strategy and allocate a team for just this campaign. Most retailers most likely don’t believe this approach is worthwhile—too much effort for not enough revenue.
The fundamental question on pop-ups that I have not seen answered is this. Is their success driven by the unexpected interruption of the shopper’s routine in some place like a mall lobby or a park? Or is it driven by the time-sensitive availability of unique or highly-desirable items and impulse?
It seems to me there are two kinds of pop-ups that do well. First is the unique item, “can’t get it anywhere else” or “normally have to order it from Uzbekistan” type carts. The second is those that offer limited time, super hot deals on highly desirable items like electronics—in effect offering the equivalent of a “bread, eggs and milk” store at incredibly good deals.
Neither of these particularly speaks to potential for traditional retailers to just go put a cart in the park.
If “retailers” includes grocers, I’d argue that they invented the pop-up concept. End caps, wings, floor displays, etc., have been popping up seasonally for as long as I can remember. And didn’t someone re-purpose some dark stores? That should count here.
While the San Francisco scene described above is certainly exciting and interesting, keep in mind that the market is pretty unique. Not sure how many other cities could support both the supply and the demand side of these bazaar-like happenings.
It’s true, chains are largely absent from holiday pop-ups. Local merchants are intercepting holiday traffic in lifestyle locations. Many of these spots would be perfect equity-builders for big brands. However, pursuing these low-volume opportunities with high-cost pop-up shops doesn’t generate much profit. So, these are left to the local merchants. The big guys hope they are destinations for shopping instead.
Personally I am happy to see the little guy get a chance to compete.
Dick Seesel made a very accurate comment, yet I’d add that there are physical locations that are high-traffic areas during the holidays where chain stores may not actually have presences. Those are the ones that offer opportunity for those larger stores as pop-ups. How about an outdoor holiday center in a town square, or an outdoor mall with a large anchor tenant that may not be the chain store in question?
This is a novel concept that has only been around for generations. There is merit to retailers opening pop-up mall kiosks to entice customers to go in the main store to shop. Sort of like the movies showing coming attractions.
Yes. This is a nascent trend, if it really is a trend at all. When the key research is done by a pop-up company, we need to examine the findings with a grain of salt. There was no true comparisons to standard shopping, and no comparisons based upon branding, availability, pricing, etc. which all lead to the basic fundamentals of marketing and selling products in these pop-up shops…hmmm…I wonder why….
Yes. This is definitely a missed opportunity for those retailers looking to gain more share of mind—and share of wallet. Gaining visibility in this relatively low-risk and low-investment proposition makes perfect sense.
What should retailers do about it? Find an under-served location and/or a market that they are planning to enter in the foreseeable future. Enter a temporary lease or other rental arrangement. Offer a limited physical assortment with lots of omni-channel support. Then watch the sales climb and profits follow.