Do You Know About Pop-Up Retailing?
Since the birth of the Internet and the subsequent digital renaissance surrounding ecommerce, technology has changed the way we do business forever. From cloud-based computing that manages hundreds of thousands of orders, to services like same-day delivery or one-click shopping, there’s no shortage of applications for these… well… apps. But it looks like some habits will never die.
Pop-up retailing is another interesting (and savvy) reaction to the increased digitalization of the economy. As Internet-based retailers cut into the market share once dominated by their brick-and-mortar predecessors, the latter has recently started to reclaim lost business through ship-from-store programs. While Amazon might have been the king of shipping, retailers like Best Buy and Target now outperform the online behemoth when shipping directly to their customers. But online businesses are striking back into brick-and-mortar territory with a vengeance, waging a guerrilla war for their customers’ hearts and wallets.
As the name implies, the pop-up retailing model is a hybrid ship-to-store configuration where online retailers set up temporary physical storefronts. They “pop-up” for a few months in malls and market stalls, sell their products, and disappear as quickly as they came, back into the depths of the Internet only to reappear elsewhere.
Maximizing Benefits, Minimizing Risk
Image source: Alchemis
This model using ambush and retreat not unlike guerrilla warfare has a lot of advantages compared to the hold-the-line strategies favored by brick-and-mortar stores. A major benefit to pop-up retailing is the lower property risk inherent with short leases. Instead of planting themselves in one place for years on end, subjected to the tides of the local market, these businesses ride the waves of commerce going wherever the demand (and foot traffic) goes.
While pop-ups can occupy their own store space in a mall or a stall on the sidewalk, some take to the streets in mobile set-ups. Come to think of it, food trucks seemed to have the right idea from the beginning; it was only a matter of time before other industries hopped on the pop-up retailing band wagon. And for good reason.
The analysts at the Lionesque Group back the trend as a profitable, creative solution: “over the last couple of years that the average pop-up that [Lionesque] works with sees a 35 percent increase in sales from doors open to 6 months after doors close. Additionally, [half] of these pop-ups see an average increase of 30 percent on social media engagement over the lifespan of their pop-up shop.” That being said, pop-up retailing doesn’t just surf on customer trends and demand.
It drives them.
Redefining the Hunt
Historically, how we reach out to customers has changed very little until recently. Before merchants existed, early humans depended on going out to hunt, gather, and forage in order to survive. Even today, the vast majority of the world’s population suffers from food and market insecurity, unsure of where their next meal is going to come from. But as markets emerge and shops pop up, people still had to leave the house and get their supplies. It was merely the grounds and prey that changed; forests and plains for bazaars and storefronts, an animal carcass and berries for pre-cut steaks and wine manufactured by skilled craftspeople. Where our ancestors relied on physical skill, weapons, and hours stalking their prey just to survive, modern humans rely on commerce, marketing, logistics — and faith that the chain continues seamlessly.
After market security is established, concerns drift from physical to economic survival. Instead of hunting pheasant or elk, our food pyramid now consists of business contacts and customer profiles: potential allies to work with and hire, rivals to watch, clients and buyers to woo. For early merchants, competing solely by price comparison (that is, offering sales and discounts) wasn’t enough of an edge. After all, why wait for customers to come to you when you can go to them?
Stores in the 19th century offered product catalogs by mail so people could order goods from the comfort of their homesteads — one of the very first examples of omnichannel retailing. By the end of the 20th century, stores took to the Internet and set up digital shops that could take electronic payment. For market accessibility, the trend has always been getting to the customer rather than drawing the customer out. Pop-up retailing, in essence, is a reversal of that trend.
Image source: Double Experience
Much like the traveling salesmen in old Westerns, pop-up retailing draws people out of their homes to see what’s happening. Similar to festivals and fairs, the temporary nature of an exotic or unfamiliar display has an interesting effect on shoppers. Some like to call it “the fear of missing out.” Whether pop-ups come back annually, every few months, or even weekly, its time limit drives a sense of urgency that makes us crave whatever they’re selling.
Say, for example, there’s a Mexican food truck that stops outside your work on Mondays. If you like what the truck’s cooking, you’ll probably start associating Mondays with a delicious burrito on the way home from the office. But even this subtle mental note hints at the smallest fear of missing out; if you’re not around on Monday, you’re going to have to wait a whole week. Or track the truck down at its other stops but who has time to look that up and go out of their way anyway? If the food is the best you’ve ever tasted, however, that fear becomes as strong as your craving. Luckily for you, they’re there every week like clockwork.
But what if that changed one day?
A Driving Force
Three months go by since your new favorite food truck came to town. If one of their quesadillas was the last thing you tasted, you could die happy. Monday rolls around again and it’s time to clock out. As you walk down to the parking lot, you count out the $8.27 exactly for your usual order of a burrito the size of your head.
You throw open the outside door and take a deep breath, expecting your nostrils to fill with the aromas of seasoned meats, warm tortillas, peppers, and rice. Instead, you merely smell pollen, asphalt, and car exhaust as Jerry, that jerk from account pulls out of his space. Jerry. You could really use that burrito but the truck’s nowhere to be found.
You pull out your phone, trembling, checking your calendar first (is it really Monday?) and the truck’s app second. Turns out they’re in another town… five hours away. It doesn’t say when they’ll be back — or if they even will. Though your heart breaks, the only solace you take is knowing others are enjoying carne asada fit for the gods.
Burrito drama aside, like the loss of anything (a memento, your phone, the death of a loved one), it’s natural to want badly what we no longer have. The truck moving on wasn’t out of spite, but careful planning, going where the market’s ripest, where customers crave something new. But they haven’t forgotten you or the other local regulars they’ve won over. But imagine how you’d feel if what you’ve lost returned to you. Six months later, the truck’s back and you (and all the friends you sobbed to about how much you missed it and its great food) are lining up for what you’ve been wanting most.
While the ship-from-store model gave brick-and-mortar stores a tool against their digital counterparts on their own turf, so too do online businesses use pop-up retailing in the physical world. As retailers vie for customer satisfaction, which omnichannel strategy will emerge superior is anyone’s guess. With flexibility, low relative property risk, and hybridizing customer interaction — all while having the capacity to influence market demand — pop-up retailing isn’t going anywhere anytime soon. Or it’ll be everywhere.
Point being: it’s the guessing that keeps people coming back and the interactivity that gives online retailers a much-needed edge.