Digital transformation, ever-changing consumer demand and online selling have revolutionized today’s shopping model. As a result, retail stores have been burdened with the complicated task of creating viable new options to increase revenue streams. The idea of the traditional department store model is virtually a concept of the past. Now, retailers are focusing on an innovative way to highlight their brands while providing an elevated customer experience.
Here are three reasons why the retail industry has shifted in favor of pop-up retail spaces:
Testing the Market
Pop-up stores allow companies to experiment with interactive business models for stronger engagement. The solution is a mutual win for well established retail brands as well as commercial real estate providers. Organizations are now able to use the pop-up experience as a means to pinpoint strategic locations for test markets. Pop-up retail locations continue to grow in consumer popularity 1 , due to the ease of accessibility and specifically targeted branding. Now, retailers are taking notice that these short term retail options are more than just a passing trend.
Less Space is More
Today’s retailers realize that larger storefront spaces don’t necessarily equate to greater success. For instance, Ikea (known for its massive store layout) has introduced the concept of a small-format location in Manhattan. The smaller store is an Ikea Planning Studio. Retail or Storefront-as-a-Service models are becoming more attractive to large retailers who wish to reduce real estate overhead, staffing costs, and product launch initiatives. Also, the concentrated space allows for more direct marketing instead of an overly saturated focus.
Influencing the Feedback Loop
Organizations like Fetch are helping businesses solidify their brand strategies 2 , with a pop-up store concept in mind. Fetch is a Denver based model that caters to local brands (and some brands outside of Colorado) looking for a more substantial presence in the marketplace. Fetch already has a strong brand presence, which is a win for its current sellers. The set up of such a business model affords companies the ability to determine what works well and what doesn’t, with a niche focus.
The seller interest is currently growing at an alarmingly quick rate. Local and well-established brands alike are taking advantage of the benefits mentioned above that pop-up stores provide. For instance, Target has recently opened 10 small-format stores, with plans to open 30 per year in the coming years. Pop-up stores may soon become the new standard instead of the growing exception to the rule.
1 Pop-Up Shops And Small-Format Stores Are Changing The Retail Landscape by Jia Wertz
2 Retail As A Service: The Fetch Journey by Nikki Baird