Pop-up retail stores are popping up everywhere. Even superstore behemoth Wal-Mart is joining the trend this holiday season. With the national retail vacancy rate at a record high, opening a temporary shop in an empty storefront is an attractive option for both business owners testing new products, markets, or ideas and landlords looking to shrink their losses with short-term leases.
“[Pop-ups are] a great way to market your products and get the word out to a new or bigger area,” says Christina Norsig, founder and CEO of PopUpInsider.com, a site that lists provisional real estate for rent nationwide.
Of course, pop-up stores don’t really just pop up. They require advance planning, and you also need to be able to ramp up hiring and management at a moment’s notice. Ricky’s, a beauty-supply chain in New York City, requires a full year’s preparation for its 30 pop-up stores that sell Halloween costumes, even though they’re only open for a couple of months. Poor management of your pop-up shop could do long-lasting damage to your business.
If you’re thinking about launching a pop-up, Norsig recommends asking — and answering — six key questions about your retail business to make sure your pop-up shop is a stand-up success.
- What is your goal? Define what your business aims to get out of its pop-up store. Are you looking for marketing buzz, extra sales during the holidays, or a location for a permanent store? Have a clear goal before you get started.
- Where is your target market? Location is the most important thing to consider when opening a pop-up. Choose a site that your target audience has access to, is aware of, and/or is willing to frequent.
- Is this the right space — and landlord? Once you’ve found a location that will appeal to your target market, consider the stores that surround it. Do they complement what you are doing? Do they have the customers you need? In addition, have a detailed, frank conversation with the landlord to make sure both of you are content with the short-term terms. Pop-up retail leases are not typical, by-the-book contracts, so be sure to discuss the length of your lease, decoration and modifications of the space, and final cleanup responsibilities.
- Are you selling the right merchandise? Planning a year in advance makes it hard to know what trends will be hot when your pop-up opens. Back in 2008, Ricky’s thought the Mike Myers film, The Love Guru, would be a hit, and it was stuck with $15,000 of merchandise in its pop-ups after the movie bombed. It’s best not to overthink what you’re selling. Successful pop-ups sell a mix of items that customers have demanded in the past, asked about in your permanent storefront, and frequently searched for on your website.
- How will you ring up sales? The sophisticated registers and software used by most retailers are too costly for an outlet that will only operate for a couple of months. Simple credit credit-card processing tools like GoPayment work best: “You can arm your sales associates sales with wireless devices to help customers check out and pay right on the spot,” Norsig says.
- How will you market your pop-up store? Considering the short-term status of pop-ups, it’s important to get the word out and create buzz. Putting a notice on your website and in e-newsletters to customers will draw your current client base. To attract new prospects, social media is a must: Set up a Facebook page, Twitter account, or even a YouTube channel (for example, you could post a video of you setting up the pop-up). Good, old-fashioned marketing tools, such as advertising in the local paper and posting flyers on lampposts, can be effective, too, Norsig says. In any case, it’s crucial to time your marketing right: Don’t do it too early, and don’t wait until the last minute. Starting a slow, steady campaign a month or so before your grand opening is a good way to drive traffic to temporary stores.