More on pop up retail stores

No longer just a Halloween phenomenon, pop up stores are evolving into engines of economic development in downtowns and areas that have languished with vacant store fronts. We asked our Zintro experts to tell us their thoughts on popup stores and their potential long-term impact for communities.

Retailsmartguy, a retail consultant, says that he tells his retail clients that if they want to test a concept in an area that they have not operated in before, a pop up shop is a great way to do that. “Retailers can test the concept, see if there is an audience in that city, all while not paying a lot for store build-outs,” he says. “I’ve worked with landlords and encourage them to accept pop up shops. These shops can help the landlords improve the sales of nearby tenants by bringing new customers, avoiding empty spaces that deter customers, and generating excitement in a mall.”

Mark Shuda, a supply chain and retail business consultant, describes pop up stores as hyper stores. “Pop up stores typically look for square footage in inexpensive retail areas. The appeal is having a broad assortment, usually discounted, aligned to an upcoming Holiday or event,” he says. “Proprietors typically negotiate highly discounted rent; some even work off a percentage of gross sales dollars, which limit the risk to the retailer. Some downtown or mall associations also offer perks such as free signing on a mall marquee or large banners free of charge. Pop up stores can be highly profitable as they operate during peak retail periods and often have special business arrangements with landlords and vendors that eliminate risk from the product lifecycle management.”

Chuck Lee, an independent retail designer and consultant, agrees that pop ups are a great tool to test retail ideas, verify theories, prove ideas, or just increase sales at key times throughout the year. “Pop ups are great for the retailer because they can get great locations at a minimum cost. The spaces can be set up quickly and closed up just as quickly,” he says. “The property owners are usually grateful for the income on an otherwise unprofitable space and, for the most part, are flexible and eager to help make the space a success.”

Lee suggests that pop up retailers consider issues around branding and customer experience before the space is opened, especially if the pop up is tied to a major brand and to established clear goals to get everything they want from the pop up experience.

John Connors, a small business consultant, says that the economic downturn has opened up new opportunities that for years were limited to small carts in shopping malls and flea markets. “The downturn has resulted in many business failures, which have left storefronts unoccupied. These vacant storefronts have become challenges for downtown organizations and management companies. The introduction of pop up store fronts for limited items like Halloween costumes, Christmas decorations, sports memorabilia, special event merchandise, kitchen items, and others appear to be filling a void left by the failing stores,” says Connors. “Where a business could not enter into a long-term lease agreement because their sales are doubtful, landlords have agreed to accept a slice of pie (limited term leases) instead to help generate short-term cash flow rather than let the vacant building sit and drag down the image of the area. This will most likely continue until vacant commercial space availability reduces with a more vibrant economy.”

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