Powerful Pop-Up Era: Short-term stores thriving

COVID-19 has forced retailers around the world to adjust their operations and rethink strategy. National U.S. retailers, such as Macy’s and Gap. saw their sales drop up to 50% in the first quarter of 2020 because of stores forced into COVID closures. Conversely, online shopping is up 31% YoY. In the first month and a half of lockdowns, e-commerce platform Shopify reported a 62% increase in first-time users. After the initial COVID shock wore off, April and May saw an increase in overall spending YoY.

People are still shopping, but they are shopping differently. So now pop-ups are being re imagined, playing a different role. Short-term pop-up shops have long served as testing grounds for brands to experiment with and tap new audiences. Now they have a role to return confidence for consumers in the physical shopping experience.

A flood of retail space is now becoming available globally, and landlords are desperate to fill their empty units. Appear Here, an online marketplace for retail space covering the US, the UK and France, saw an increase of 125 per cent in available retail space listed between June to August. “There were a huge amount of vacancies,” says Ross Bailey, founder and chief executive. It adds up to a buyer’s market for retailers and brands — which is why low-budget, short-term, quick-install pop-ups are set to surge back in the coming months.

How pop-ups weathered lockdown

During the pandemic, the usual uses of pop-ups in the US — event-driven brand launches, PR-focused uses and location testing — have mostly been on pause, says Brown of Cushman & Wakefield, global Retail leasing experts.

But agile thinking has prompted some new initiatives. These have included pop-up drive-in movie theatres and pop-up socially distanced restaurants. For fashion retailers, pop-up stores have allowed some brands to follow their customers out of town — most notably in the Hamptons, where wealthy New Yorkers hunkered down through much of lockdown. Melissa Gonzalez, founder and chief executive of The Lionesque Group, an experiential retail strategy firm, says pop-up stores post-Covid-19 can be part of a strategy that “allows brands to show up where it makes sense”.

One fresh idea for this not-so-new use case, as the threat of the coronavirus looms, is using temporary spaces to test new health safety protocols, such as social distancing and contactless payment, says Gonzalez. “Brands and retailers are going to have to find that balance of what are the right safety protocols, how has consumer behavior shifted, and how do we still make it feel good?” Gonzalez says, describing a recent visit to a local coffee shop as too “clinical” for her comfort. “You can buy something with a click of a button, but shopping is an emotional experience. So, how do we make sure we continue to remember that side of it and layer that back in?”

Luxury fashion houses have also followed their customers. Across the Mediterranean, Dior launched several “Dioriviera” pop-ups this summer. “Pop-ups complete our retail strategy. We aim to go where the client goes. [It] allows us to have a presence in the locations to which our clients travel and to be able to offer what they might need while on vacation,” a Dior spokesperson says.

While buzzy downtown destinations have usually been top of the list for pop-ups, the most popular locations are now in local neighbourhoods. “They’ve gone from weekend [to primary] destinations because people are at home and they’re there the whole week,” says Ross Bailey. “We’ve seen brands look upstate at Connecticut and other places they normally wouldn’t have looked before.”

Gonzalez notes that a brand she works with saw one-tenth of its usual traffic last summer in New York, but made a whole month’s revenue in the first week at the Hamptons. “For most brands, their retail strategy has, historically, been to hit the big cities first. But places in New York, like Times Square and Midtown, rely so much on commuters and tourists, that’s going to be an uphill battle.”

In Europe, pop-ups have become increasingly neighbourhood-based in recent months. Since June, the five hottest pop-up locations for London have been Westbourne Grove, Neal Street, Curtain Road, Columbia Road and Golborne Road, while Paris’s top five are rue de Turenne, rue Pierre Lescot, rue du Roi de Sicile, rue de Charonne and rue Debelleyme, according to data from Appear Here.

Other brands are staying put in cities and creating new experiences. Alighieri built a Florence-inspired pop-up in London that served Italian meals alongside its jewellery collection. Inspired by the idea of an Italian holiday, founder Rosh Mahtani says she wanted to create a space where people could “see friends they hadn’t seen for some time, look at jewellery, have some food and decide over dinner what they wanted to buy”. Dinner bookings sold out within the first few days of going live, leading to the booking of separate shopping appointments. “That for us has really been a measure of success,” she says. “Conversion rate and spend have been strong.”

One characteristic of pop-ups remains unchanged and as powerful as ever. They continue to offer an affordable first step into physical retail for young and emerging brands. And the physical space still has an important role to play for newcomers in a post-Covid-19 retail environment. As Ross Bailey of Appear Here puts it, “Online is becoming a key distribution channel, but physical retail is still where brands create that connection with the customer.”