February 11, 2021 | Pop-Up Retail: Not Just For Start-Ups, And Other Learnings From Its Evolution | By: Matthew Wagner, Ph.D., Vice President of Revitalization Programs, NMSC |
Moonlight Makers is a pop-up gift market store in Asheville, North Carolina. Photo credit: Ablokhin
A few months back, I listened in on several presentations from the 2020 Retail Innovation Conference. While much of the dialogue focused on post-COVID technology infusions into national retail stores and likely consumer shifts in shopping, one particularly unique perspective caught my attention. After a few minutes, it became quite obvious that pop-up programming, from a Main Street perspective, had become limited to a single point in the business lifecycle: that of the nascent, start-up business.
Pop-ups, while a relatively newer term for many Main Streets, have a long history in downtown and district activity; we just didn’t think of them as pop-ups. Temporary pop-up retail establishments date back to the Vienna “December Market” held in 1298 and in the European Christmas markets that followed. Over time, they evolved to include everything from seasonal farmers markets, July 4th fireworks stands, Halloween costume shops, consumer expos, and event-specific concessions.
Over the last decade, Main Streets and other revitalization entities across the U.S. have developed a number of iterations, from event-driven pop-ups, pop-ups in existing stores, and permanent pop-ups hosted by an organization. With only a few exceptions, these activities have centrally and almost exclusively focused on start-up businesses. As a vital place factor within an entrepreneurship ecosystem, pop-up programs allow for emerging businesses to test their product, gain consumer feedback, and promote their brand at an extremely low cost. In essence, allowing for a ‘fail-fast’ product development cycle.
Statistics on pop-ups are a little thin, but a recent report out of the UK from Everything Everywhere (EE) and the Center for Economic Business Research (CEBR) suggests the pop-up retail sector is growing at 12.3% per year. And the U.S. pop-up industry has grown to approximately $10 billion in sales, according to PopUp Republic. But it’s not just about the sale. Jeremy Baras, the CEO of PopUp Republic, indicates that, “Customers are attracted to exclusivity. They’re attracted to a ‘here today, gone tomorrow’ type of concept.” This is further reinforced by 2019 data from Statista that examined consumer reactions to pop-ups and the attraction for shopping at these temporary stores. The following graph highlights that key drivers revolve around the experience and the ability to support local small businesses; getting a good deal, meanwhile, is a distant fourth in priority.
Pop-Ups: Not Just a Programming Strategy for Start-Ups
While certainly needed for start-ups, a key take-away is that our existing businesses also need ecosystem programming that allows them to test business model pivots and explore other areas for growth, both from a product and geographic perspective. Like a start-up, pop-up programming for existing businesses provides similar benefits with a couple key additions; research by pop-up specialists at the Lion’esque Group
shows that the average pop-up sees a 35% increase in sales from doors open to six months after doors close.
Just as sales are not the main driver for consumers, this is also true for existing businesses. Other areas of business objectives include:
- Growing Social Medial Following: Lion-esque Group suggests 50% of pop-ups see an average increase of 30% on social media engagement over the lifespan of the pop-up shop.
- As a Learning Center: This can be two-way. First, for businesses that are introducing a new product or service, a pop-up may provide for a unique opportunity to spend more time educating the consumer about the functionality, how to use, or unique benefits of the product. At the same time, it can also be used to gather data from customers in the form of customer feedback.
- Testing New Geographies: Often using more mobile forms of pop-ups, existing restaurants, for example, may invest in a food truck to test new cities or extend sales to events. The mobility of a pop-up is one of its most appealing abilities. Pop-ups are agile in their locations, and once a business discovers their customer base is frequenting a different area or a specific open spot, it has the opportunity to better reach them.
- E-Commerce Leap to Bricks and Mortar: Recent research from Main Street America suggests 86 percent of e-commerce businesses launch from the location of where their founder resides. Thus, pop-up programs provide a great opportunity for those e-commerce businesses to test the waters of what a bricks and mortar experience might bring to their businesses.
Despite the global pandemic and its impact on certain retail sectors along with restaurants, many existing businesses used this time to test business model pivots in which pop-ups were a core component. Examples include:Belfast, Maine
– The Moody Dog
, started out as a mobile retailer in the form of a food truck, specializing in pies, cookies, and cakes. Spotting an opportunity, the business decided to use another form of a mobile pop-up—a push-cart—to expand offerings through a menu of specialty hot dogs. Success and a large following have now resulted in other pop-up activity near the Marshall Wharf Brewery, and a more permanent “hidden,” as they call it, kitchen and take out space. https://themoodydog.com/Libertyville, Illinois
– In January, Chrissoulas
, a popular Greek restaurant located in Libertyville, Ill., opened a pop-up featuring a small menu selection of ramen specialties called Westside Ramen
. In addition, the main restaurant added delivery service along with a new wholesale seafood business. It is important to note that the pop-up took on a completely unique look from the original business. The website styles and social media
are completely different, providing a unique experience to new customers in addition to their current customer base. The pop-up was a huge success, and ramen will be a new addition to Chrissoulas’ regular menu.
Recommendation for Main Streets
1. While it may seem obvious, if you are running a pop-up program as an event, fixed space, or to create new product showcases within existing businesses, adjust your market and philosophy to include your existing businesses as pop-up vendors
2. Create a pop-up education program for your existing businesses
. As part of COVID-related business adjustments ranging from pickup, delivery, and e-commerce additions, pop-ups can provide another great opportunity to reach new consumers, test new services, build brand identity, accelerate social media following, and/or explore new product concepts at a relatively low cost.
3. To accentuate your business recruitment program, rather than totally focusing on a move of a particular target retailer or restaurant, start with exploring pop-up opportunities for them in your community
. This will give them a chance to examine the market demand and local consumer feedback prior to making such a large, more permanent investment.
4. Target online retailers in your community
. For example, many may be Esty-like vendors eventually seeking to have a bricks and mortar store. A quick scan of Etsy demonstrates that many of these online vendors are truly Bricks and Clicks.
5. Educational and case study resources to consider as you explore pop-ups include:
- Ground Floor Pop-Up Toolkit: A resource for landlords & storefront activators to create win-win dynamics on the path to recovery – Wallplay
- Pop-Up Program Development: Lessons Learned and Best Practices in Retail Evolution – MSU EDA University Center for Regional Economic Innovation
- The Pop-up Primer: The ultimate guide to create your own creative placemaking project and activate your storefronts – Miles
In conclusion, for those existing businesses looking to explore new product opportunities, test model adjustments, or explore new geographies, the timing—despite COVID—is nearly perfect. Retail vacancies are at all-time highs in many areas, landlords are looking to be more flexible with short-term lease options and pricing, and capital is cheap to borrow if needed. As Main Street programs, in addition to our efforts to build entrepreneurial pipelines, viewing pop-ups through an expanded lens represents an important addition to our retention, expansion, and recruitment efforts.
Meet the Author
Matthew Wagner, Ph.D., Vice President of Revitalization Programs:
Matthew Wagner, Ph.D. serves as Vice President of Revitalization Programs at the National Main Street Center, Inc. In this role, he is responsible for driving the Center’s field service initiatives including the development and delivery of technical services for Main Street America and Urban Main programs, directing the Center’s new research agenda, as well as professional development programming through the Main Street America Institute.Read Matthew's bio