f COVID has taught us anything, it’s the value of the human connection. The importance of togetherness, community and engagement has, perhaps, never been stronger. Retailers and indeed, many other brands, understand the quintessential need for unique consumer experiences which foster a human bond. Pop-ups started based on this need – think Farmer’s Markets – but they’ve quickly evolved. While many thinks of pop-ups as in-person experiences, COVID has forced us to rethink them as digital experiences. It may be only fitting then, that the industries most-negatively impacted by COVID are now positively positioned to take advantage of pop-up stores both off and online. Consumers want intimate, authentic and compelling experiences now more than ever, and pop-up stores provide the ideal avenue for driving customer connections.
The pop-up or flash retailing market in the United States is estimated to be a $50 billion industry, and it’s for good reason. Studies has shown that 91 percent of consumers have a more positive feeling about a brand after attending an event or experience while 84 percent of customers say they want to be treated as a person and not a number. That shows how short-term shop spaces are a proven vehicle for doing just that.
Pop-up stores are a form of experiential marketing, also known as participation marketing, which aims to create memorable and meaningful connections with customers through captivating and unique experiences that feel authentic to the brand. They allows customers to experience the brand and differentiate the brand from others.
However, by their nature, this type of business is temporary, offering a limited window to entice customers. This short-term approach means that brands can experiment with novelty items, introduce new merchandise or test concepts without the hard cost or risk associated with long leases and associated overhead costs. They can also get increasingly creative. The skincare and cosmetic company, Glossier, rented a popular café for a month in San Francisco to create a pop-up makeup/coffee shop. William Sonoma offers world-class cooking classes from popular chefs as pop-ins in their stores. Yet, even these seemingly more costly and imaginative endeavors pale in comparison to the price of adding store locations.
Short-term spaces are also less expensive than traditional brick and mortar stores. Thus, brands can create magical experiences, save money, and drive revenue. Shoppers are also often willing to pay more for a better customer experience, making the creation of unforgettable shopping experiences worth the effort.
Pop-ups tend to grow their presence during a holiday season to engage customers, but the truth is that they’re effective any time of the year and the concept is attracting more followers each year. In the past, Chanel created a Winter Wonderland Pop-Up in New York City. The wonderland offered customers ice skating, seasonal treats and experiential shopping experiences. Nordstrom offers on-going pop-ins or specialty shops in their store, and during the holiday season, they provide customers with select merchandise not typically found in their stores, along with gift wrap services and curated gift guides. Both brands know the power of engaging the consumer whether through nostalgia or an enhanced shopping experience. That investment not only can boost short-term profits, but it can increase customer loyalty for long-term gains as well.
Another brand, Athleta, consistently engages their customers through unique events. They use their category of activewear to create meaningful athletic experiences. They offer small, work-out sessions such as yoga in their stores. These sessions add an element of community by sharing the staying-fit experience with others while also fostering brand awareness. In addition, they provide a great way for customers to test out their activewear in a real-world environment while scoping out the newest merchandise. A win-win for customers and brands.
Although pop-ups are typically in-person experiences, the pandemic altered consumer expectations to reflect the power of digital pop-ups as well. Consider Warby Parker’s initiative which uses virtual reality technology to allow customers to try on glasses in the comfort of their own homes. Think of the possibilities. Brands can create virtual pop-ups that bring merchandise (shipped to your home in advance) to try on, music from an up-and-coming band, and influencers together. A few years ago, Gucci used virtual reality to allow customers to try on shoes, and other brands are producing virtual fashion shows. These efforts could be combined into a virtual shopping experience to reach a broader audience while personalizing the brand. These unique endeavors create rewarding occasions for customers that build brand affinity and loyalty.
Virtual Going Physical
There is also the prospect of online merchants using pop-ups to make some offline buzz. eBay, for instance, has launched a pop-up store in the United Kingdom in 2019 where they showcased products from some of their top artisan sellers. This gave consumers an opportunity to connect directly with the artisans and engage with their products. This effort tapped into another benefit of pop-ups – the ability to showcase local artists and lesser-known brands.
Clearly, brands are using this new business model to engage existing customers, reach new consumers, and drive revenue, and brands and artisans an opportunity to expand their presence. That doesn’t mean that creating interesting pop-ups is easy to do or that everyone should rush into the game. Rather, some products and offerings work better for this type of experiences than others. Retailers, fashion brands, hotels, food and beverages manufacturers all have great opportunities to separate themselves from the competition by utilizing pop-ups. It is really a question of if the brand can be incorporated into a broader lifestyle experience. B2B brands can also partake in the fun, especially wholesalers, but think outside of the box because a veiled sales pitch will not cut the mustard.
Tips for Artists and Brands
Successful pop-ups require the right location, ambiance and allure to pull perspective customers to them. Short-term spaces can come in a variety of locations from mobile (similar to food trucks) to outdoors areas such as festivals, farmland, museums and/or even intimate settings like a small neighborhood boutique or spa. The most important thing is to select a location that supports or reinforces the essence of your brand – an event on a farm for Verizon probably doesn’t do much for their brand positioning. The right location also depends on where your customers frequent. For instance, the locale that might attract Millennials may not be enticing to Baby Boomers. The shortened timeline also lends itself to partnering with interesting venues offering experiences such as limited time exhibits, short-term musicals, performances or plays and seasonal events. Pop-ups can also be used as an in-store attractions to create in-person excitement for a loyal vendor in need of a pizazz pick-me-up. Scouting and finding the right location that reaches your target customer can take time. Once you have the location, assessing the concept for a short duration offers real-time customer feedback and the ability to home in on meeting the market needs.
Exclusivity is another benefit of pop-ups. Brands can use pop-ups to honor their VIP customers, create focus groups or market research as well as test or launch new products. Consumers tend to love the idea of having access to something that others don’t as well as the notion of receiving special treatment. In addition, the concept of “experience it before it’s gone” or FOMO (fear of missing out) is a great driver for creating urgency as well as appeal. Exclusivity provides an incentive for customers to share the experience in advance, during and after the event. The elite feel can make people brag about the event or about the product on social media, and it provides the best platform for generating interest and engagement.
Just as pop-ups can be utilized to test new product launches or a potential new store location, they can also be used to test the concept of the store itself. Moreover, it’s wise to consider partnering with another complimentary brand or other artists to share the expenses or utilize their storefront. This approach affords cross-promotion and an ability to tap into an existing customer base. Marketing promotions, working with influencers and specialty offers of unique merchandise such as locally made products, will also help ensure the success of your pop-up store. While pop-ups avoid much of the hard cost of brick and mortar, brands will still need to think about their marketing budget. Social media is ideal for reaching new customers, but don’t disregard the value of offline marketing tools as well. Creating appealing mailers and distributing flyers or catalogs can be effective in reaching new audiences, but keep in mind, the experience is what the customer will most likely remember. Put the effort into the aesthetic, the quality of the event, and the experience. Ensuring that the customer feels honored and appreciated is the best way to have and maintain a successful pop-up.
While major brands such as Puma and Levi’s have been using pop-ups to entice customers for some time, other brands such as Kraft Foods have also jumped into the fun. These brands understand that purchasing is being increasingly driven by creating connections between customers and the brand. The takeaway is that pop-ups drive revenue and brand loyalty through offering unique customer experiences. That is why so many brands have moved away from the one-size-fits-all approach to traditional marketing and instead embraced a more personalized approach. Pop-ups provide a more intimate, curated, and unique customer-centric experience where customers feel valued. This is a critical distinction in an age where product attributes and discounting can often dominate marketing efforts. Gone are the days of transactional sales. Today’s customers want to feel distinct, important and understood. That’s what really earns their business.