Examining the Power of Brick-and-Mortar through Pop-Up Shops - ShopperTrak

Examining the Power of Brick-and-Mortar through Pop-Up Shops

Article
by Bill McCarthy on 3-31-17 in Industry Trends

One retail trend that’s popping up everywhere? The pop-up shop. The temporary brick-and-mortar store stands, which can operate for up to 120 days at a time, are a retailer’s goldmine, as the shops can not only provide a plethora of insights into what to expect from a permanent store, but also offer advantages in and of themselves. Clearly, pop-ups are valuable: in 2016, Pop Up Republic estimated the industry’s worth to be $50 billion.

Pop-up shops exemplify the power of brick and mortar, especially for digitally native brands. The shops enable retailers to analyze physical foot traffic and conversion rates — metrics that are unavailable on digital platforms. The benefits of brick-and-mortar store spaces are so transformative that online-native companies are altering business models, often by using pop-up shops as a first foray into the world of traditional retailing.

Pop-Ups as a Segue

The cosmetics company Birchbox is an example of a digitally native brand that used pop-up shops as a transitional step. Birchbox has functioned as an online-only brand since 2010, until the company opened its first and only physical location in 2014. When Birchbox opened its first brick-and-mortar doors, it tested the waters in other spaces with pop-up shops. If the pop-ups in these new regions find success, they may result in additional physical stores.

Pop-ups can also give online retailers an opportunity to provide customers with a tangibility aspect to shopping that would have otherwise been unavailable on digital platforms. Birchbox products, for example, have a high-touch aspect. Pop-up shops would allow customers to try on different lipstick shades or hand lotions before purchasing them, adding a rare hands-on element enhances the shopping experience and likely attracts more customers.

Pop-Ups as an Attraction

Pop-up shops have a huge advantage in terms of attracting customers in another way: they will always possess a limited-time-only element. To avoid feeling like they may miss out on an opportunity to explore a new store, shoppers are likely to walk in. While the fear-of-missing out-induced popularity may skew conversion rates, it also spreads brand awareness. Even if a customer enters the store and doesn’t buy anything, she could tell her friend about it.

Pop-Ups as an Informative Resource

The popularity of pop-ups can give retailers crucial insights into shopper habits. Retailers can analyze customer demographics, best-selling products, average transaction size (ATS), as well as the number of store visits at the pop-up location, and then tinker the brand’s design accordingly before moving to a permanent store. Additionally, the impermanency of a pop-up provides some flexibility for location. If retailers are not achieving ideal traffic levels, they can simply move to test out a different spot.

Understanding traffic data is important for any brick-and-mortar store, but it is measured differently for pop-up shops and permanent stores. Pop-up shops track foot traffic on an individual store basis, whereas permanent locations compare traffic between stores. So while traffic data in pop-ups is still informative, it may vary by location.

Pop-Ups as a Retail Success

Popular brands like Google, Glossier, Bonobos, and even Sprite have found success with pop-up stands in Manhattan. Other companies take a different approach to pop-ups by placing a store within a store. Giant department stores, like Nordstrom, Neiman Marcus, and Best Buy, allow small pop-up stores inside. These traffic-heavy locations allow for pop-ups to hone in on very specific customer demographic.

Companies can utilize pop-up shops as segues in order to gather data to create a successful permanent physical store spaces. The utilization of these temporary stands by digital native brands speaks to the power of brick and mortar. Regardless of how long a pop-up shop may last, brick and mortar is here to stay.

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Read more posts by Bill McCarthy

Bill McCarthy is the General Manager of the Americas, in which he oversees regional efforts pertaining to the Traffic Insights business unit.

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