Llenrock reports: Why pop-up shops aren’t just a trend

August 17, 2016

Tatiana Swedek, Llenrock Group

 It’s funny how the overall needs of urban communities translate throughout most sectors of commercial real estate. Just think of the current needs of people today! We place a high level of value on characteristics like walkability (urban) and want all of our experience to be unique, nontraditional, convenient and tech-savvy. We see this impacting sectors such as multifamily, hotel, office, and retail. When it comes to the retail sector, it seems like we’re overwhelmed with headlines like “Clicks Defeat Bricks.” Figures from Black Friday showing online shoppers totaling 103 million people over the four-day weekend, compares to 102 million who ventured to brick and mortar stores, have stuck with people for months. You know what people aren’t talking about? How the sector is actually improving. After all, change isn’t always bad.

Gravitating away from chains

This past year, big mainstream retail companies like Target and Macy’s announced that they’d be closing a number of stores due to low sales. The companies have blamed store closures on everything from the popularity of e-commerce to global warming for causing a decrease in sales of winter apparel. But, maybe people (especially in more urban environments) just don’t want clothing that is mass-produced anymore.

Enter: Pop-up Shops.Good for big AND small brands

These temporary retail spaces can sell everything from beer to yogurt to clothing. They essentially “pop up” in an unused space for a few days, weeks or months without a long-term lease required. They’re the Airbnbs of Retail.Pop-ups are good for start-up designers and brands who have a strong online customer-base but are looking to expand into brick-and-mortar every so often. But it’s not only the small start-ups utilizing these spaces, big names like Walmart and Hermes have turned to this strategy to help better reach their customers.

Think Global: Good for the community & economy

We all know about financial crisis in Greece. What we may be less well-versed in is the alternative ways Athens is attempting to revitalize their economy. In a city crippled by debt and vacant shops, initiatives like nomadic bars and cinemas are traveling throughout the city to provide temporary entertainment and pop-up restaurants are providing the community with low-cost food venues, according to The Guardian.

In Oakland, companies like Popuphood are using pop-up shops to not only help businesses profit but to help revitalize a community. According to Be A localist, Popuphood is “a for-profit small business incubator that creates pop-up retail clusters to develop entrepreneurs, activate unused spaces, and stabilize the local economy by revitalizing neighborhoods block-by-block.” Pretty cool idea.

Good for landlords, too!

So, these shops are opening doors for smaller self-made brands and creating a need for space-finding organizations to take wasted urban spaces and turn them into something positive for the community.

But what about landlords?

How does this help them?

With many retail companies, like Circuit City and Borders, going out of business, pop-up shops are giving landlords an alternative to compensate for the rent lost between long-term tenants.A traveling market allows retailers to reach more consumers. Imagine how many more customers you can attract by opening shop for a couple of days in New York City then, three days later, being in business in Philadelphia. It’s a guerrilla marketing tactic for a lot of online-based brands who want to make an impact beyond the screen at a feasible price.

As the Hightower Blog says: “We live in a weird world. Major corporations want to seem like small businesses, and small businesses want to seem like major corporations.” Too true.

When it comes to pop-ups, these temporary retail spaces are a concept that is here to stay.

Tatiana Swedek is a communications associate at Llenrock Group.

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