Joseph Marver wasn’t having the best October selling dresses in his California store a few decades ago. But he did notice that customers were waiting in line to get into the costume store across the street.
When the costume shop moved to another location, Marver sensed an opportunity. So he decided to replace the dresses in his store with Halloween costumes.
The change was a resounding success, according to The Seattle Times. Sensing a bigger opportunity, he opened a temporary store in a mall the year after. And that location grossed $100,000 over about a month.
To promote the stores, Marver posted billboard ads on the highway. He also sought to rent storefronts as close to a Walmart or Target as he could.
His concept would become Spirit Halloween Superstores, which he later sold to New Jersey-based Spencer Gifts. At the time of the sale, Spirit had 60 temporary stores. In 2016, Spirit had more than 1,100 pop-up stores in the U.S. and Canada.
And the chain has revenue in the millions, too. The company brought in $400 million in sales during the 2015 season, according to research from Moody’s Investors Service.
“They’ve done a good job creating the right atmosphere and stocking the right assortment of products,” Raya Sokolyanska, a Moody’s senior analyst, told Bloomberg. “Everyone sells Halloween costumes, from Walgreens to Walmart, but among the specialty retailers, they’ve been winning share.”
Beyond Costumes
The term pop-up shop may have been first coined at the beginning of the millennium, when California-based Vacant started opening temporary apparel stores.
Vacant sought to place temporary stores where customers were likely to be engaged. For example, the company facilitated the opening of pop-up shops that sold board shorts and hoodies near skate ramps.
Today, according Vacant’s website, pop-up stores can be used for companies to launch a new product, test a consumer market or generate brand awareness. And they can be ideal stores for holidays and big events such as London Fashion Week and the Brazil World Cup.
But it is not easy for any company to open a pop-up store. And newer brands can face some challenges “as there are a lot of companies in the marketplace now attempting to lease space for short term, and most of these spaces are unsuitable for a retail activation,” Vacant said on its website.
Mall Pop-Up Shops
Like Marver, who opened a pop-up shop in a mall, shopping centers are becoming a popular location for pop-up stores. More and more malls are dedicating space to the pop-up style of short-term retailers, The Wall Street Journal reported in 2016.
In the Woodbury Common Premium Outlets outside of New York City, for example, Rent The Runway worked with Simon Property Group to open a pop-up shop.
“They sold some of their existing inventory and they had unbelievable success,” said David Simon, chief executive of the Simon Property Group, during an earnings briefing, as the WSJ quoted him. “There’s so much creative stuff going on with new ideas and new concepts.”
The plus for the malls and the retail brands is the “easy accessibility” of the space. Since brands don’t have to sign a five- to 10-year lease, they can focus on offering the best, newest and freshest of their available offerings.
In addition to mall owners, department stores, too, are also getting into the pop-up shop business. Macy’s, for example, is testing out pop-up stores in 10 cities — from Las Vegas to New York — in a new concept named “The Market @ Macy’s.”
Through the program, brands can pay a one-time fee for a space on Macy’s first floor to advertise or sell their products while retaining all of their sales. Compared to traditional pop-up stores, Macy’s own staff services the brands. And the retailer is flexible on timing: Brands can stay for as short a time period as a month.
While the pop-ups benefit brands with flexibility and staffing, they also benefit Macy’s. Through the pop-up stores, Macy’s can gain insights into customer preferences. And, of course, the promise of new products could drive customers to visit its stores.
Pop-up stores can also go high-tech. As Spanish fast-fashion retailer Zara renovates its flagship store in a London mall, for example, it has come up with an innovative solution to sell to customers: opening a digitally enhanced pop-up store in the same building.
The 2,150-square-foot location will feature both women’s and men’s clothing, but with a unique twist: All merchandise will only be available for online purchase. In addition, the store, which will be located at London’s Westfield Stratford Mall, will support pickups for online orders.
And if Zara’s “click and collect” service — in which robots will now fetch items from the back of the house for customers — is any indication of what’s next in retail, perhaps the new generation of pop-up shops will need less (human) staff.
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