Pop-up Shop 101: A Guide to Building a Physical Store for Your eCommerce Business?
Head of Content
⏱ Reading Time: 10 minutes
eCommerce has given many people the opportunity to start a great business with lower costs compared to starting up a physical business or a physical store. If you currently run an eCommerce store, we definitely agree with you that the internet is a great place to sell things and also serves as a passport to reach a global audience.
However, there are still lots of potential customers you might never reach if you don’t have local stores or physical channels, hence the need for temporary retail space or what you call a pop-up shop. In the United States, despite the rapid growth of shopping online, only 11% of retail sales are done online.
Having a physical space where you can reach your customers gives you the opportunity to put your brand in front of them at all times. It offers you a direct avenue to encourage sales, improve customer experience and add more channels to your omnichannel strategy.
However, having a physical store can be a big deal especially when it comes to cost and commitment. So if you have plans to establish a physical store but have been discouraged by these disadvantages, having a pop-up store is definitely the right solution for you. It gives you the ability to set up temporary retail without the costs and long-term commitment to establishing a brick and mortar store.
Regardless of how posh or cool these names sound, Pop-up shops don’t just pop out of nowhere. There are plans, strategy, and costs of establishing them too. Here will discuss the costs, steps, logistics and all that you need to know to enable you to open successful temporary retail for your business.
What Is a Pop-up Shop?
Pop-up shop is a short name for temporary retail space. They are temporary stores created by online brands without a physical presence with intent to interact with their customers and let them know about their new products or provide them with a unique shopping experience. Moreover, establish brands also use pop-up shops to create a special, unique and different customer experience.
Picture 1. Pop-up shop example
A pop-up store can be built to look like a physical store, it can be situated in another retail space like a mall, superstore, an event or in an open-air empty lot. If you run online retail, a pop-up might be a good idea especially when you need to have physical contact and interaction with your customers about a new product to promote a unique customer experience that will make a mark on their minds.
What Does It Cost to Get a Pop-Up Shop?
Factors like location, size, duration and many more determine the cost of getting a pop-up store. There’s no limit to how much you can spend, it all depends on you, what you’re looking for and how much money you’re willing to invest. However, with as little as $1,500, you can get a pop-up shop.
5 Pop-up Shop Benefits and Reasons Why You Should Consider Running One
As a business person, the most important thing at the back of your mind is sales and profits and so is it for everyone who seeks to open temporary retail. However, there are other benefits and reasons why we think you should consider running a pop-up shop.
1. One-on-one connection with your customers
Not everyone likes to purchase things without feeling or touching it first, hence the reason why a majority of buyers still prefer physical stores. Creating a pop-up shop is going to help you bridge this gap with your customers.
No matter the convenience that online-transactions bring, it can never replace the customer experience gotten through face-to-face shopping with your customers. Sometimes customers want to see these products, touch them, and see the people behind them before they buy.
Having a physical connection with your customers also helps your omnichannel marketing strategy. By the time your customers have researched your products via social media and search engines, prints and other media channels available, their online experience is complemented with an offline experience from your pop-up shop giving way to building an excellent network of customers with high loyalty and lifetime value.
2. Customer education
When you’re trying to sell products with a complex explanation, the best way to get your customers on board with it, is through live demonstrations. In some cases, video making and infomercial videos will be enough, but sometimes it won’t. Pop-up shops help you demonstrate in real life, the benefits of your products.
Open temporary retail and deploy trained customer representatives with high knowledge of the product who will give detailed and informative explanations about the products to your customers. With the pop-up shops, your customers will also have room to make questions before they are totally convinced to buy. Whether it’s a new-to-market or old products, live demonstrations give the product a boost for customers to buy it.
3. Create awareness
One of the ways to increase sales is to create awareness with a sense of scarcity of the product. Opening a temporary pop-up shop with a definite end date can drive customers to action due to the desire to buy exclusive and limited products before the chance to do so closes. This is a perfect approach if you are promoting new products, kicking off campaigns or trying to create awareness for your brand.
Picture 2. Drake’s Lower East Side pop-up shop
Put out a feeling of urgency to your customers by letting them know the opening and closing date of your temporary retail sales. You can also explore the power of social media, emails and broadcast lists to get the message out there even before the shop is opened. If your inventory is limited, you can also increase the feeling of urgency by letting your customers know that the sales will close immediately the items are sold out.
4. Testing grounds for an offline sales channel
The commitment and investment involved in setting up a physical store can be overwhelming. Without the assurance that these stores will be successful, brands find it difficult to go invest in brick and mortar.
To avoid this, you can set up a pop-up shop and use it as a testing ground. This is easier since they require a little investment compared to having a physical store. If your pop-up shop becomes successful, it’s a good indication that your business is ready for expansion into physical retail. Otherwise, you might have to go back to finding new ways to test your plans for expansion.
An example of a brand that used this strategy successfully is Warby Parker. Warby Parker is an eyeglass company that started as a digital brand. When they were ready for physical expansion, they tested their brand through pop-up stores and the experiment was successful. With this positive result, the company opened many storefronts and today, they have about 90 different retail locations.
5. Increase sales during Peak periods or busy seasons
During peak periods like Black Friday, Holidays seasons Cyber Monday and many others, opening a pop-up shop is an excellent way to drive more sales. During these periods, your pop-up will not only drive more sales but also bring in customers that might become loyal to your brand even after the shop is closed.
Picture 3. The home of Black Friday pop-up shop by Amazon
Common Spaces You Should Consider for Setting up Your Pop-Up Store
Shopping Mall: You can find available for rent; kiosks, booth space or vacant in-line stores in big malls. Renting this type of space can be cost-effective than other venues and it can also place you in front of the best costumers looking for ways to spend their money.
Pop-ins: These are stores found within another store. It offers you a great way to learn from an already existing physical store and piggyback their way to success. You can also find pop-ins in hotels.
Mobile Shops: This can be another type of space to consider especially if you don’t to be limited to one location. Rent a truck or bus and host your own road pop-up shop.
Event/Gallery Space: You can also consider using gallery or event spaces. This type of space is offered by organizers who already have the space ready for digital brands with eye-catching displays to get customers’ attention.
Vacant Store Front: This is another type of space you can explore for your pop-up shops. Look around in your ideal area for vacant storefronts or have a real estate agent find you one, customize it to what you want and get started.
Choosing the Right Location for Pop-Up Stores
Making the right decision about your pop-up store location can be done considering several factors.
The type of product you want to sell: Your pop-up shops must be located in areas where people actually have the need for your products. Use your current sales data to find out the location where you have your most customers.
Traffic: The best form of traffic can be foot traffic. What does your location look like; a neighborhood or street where there are lots of people walking by? And most importantly, would they be interested in what you’re selling?
Competitors or Complementary shops: Before you choose your location, make sure you do not have brands or physical stores already offering the same product as you might not survive with such competition since you’re new. However, if other shops around that location sell products that complement yours, then it’s a good place to start.
Where to Look for Pop-up Shop Venues
When you are ready to open your first temporary retail, you can work with realtors to get you a good venue. However, you can also search online for databases yourself. Here are some of the sites you could visit to find a suitable space for your pop-up shops:
The Right Questions to Ask Before Booking a Space
Now that you’ve found a desirable space that fits your pop-up store goals, don’t allow the excitement to stop you from asking the right questions before making a commitment with the property manager. To fully understand what you’re getting into, we’ve outlined a few questions you should ask before making payment.
What is the layout space?
Don’t make any assumptions, get the property manager to show you the complete layout space you’re allowed to use so you can visualize it and find out if it’s perfect for your needs.
What does it cost to rent the space?
Find out the actual cost for space, how it is paid; whether monthly, weekly or daily. With this, you can also check out other similar spaces according to what your plans are. Weigh your options and try to negotiate to get the best prices.
What is included in the rental cost?
Go deeper into finding out what your rights are over the space. Clarify with the property manager over what you’re getting when you pay for space. Take notes about the amenities involved (e.g. Internet/WiFi, water, etc.), occupancy dates, specific square footage and be sure you’re going to get the value of your money.
Are there additional costs?
Some rentals may have additional costs when you rent them, however, some property managers forget to tell you this when you’re about to rent the space. Find out if there are additional costs for space; for example, utility costs, be sure to clarify the expenses you’re responsible for and determine if they’re reasonable before you make any commitment to avoid unexpected charges.
Are modifications to the space allowed?
To avoid future misunderstandings with the property manager, it’s imperative you know what your limits are over the space. Find out if you’re allowed to make any modification on the space especially when you’re sharing it with other vendors. Modifications could involve drilling holes in the wall and other significant changes. So be sure to clarify your limits and find out if they’ll work for you.
Opening a pop-up shop isn’t just for driving quick sales, it can serve as omnichannel retail and be a part of your overall branding strategy. Pop-up stores are powerful tools for customer acquisition and customer retention strategy. Feel free to test your omnichannel marketing ideas, compile your data and build awareness for your brand by setting up more temporary retail if you need to.
You can also understudy and take a cue from these five world brands that executed successful pop-up shops; The Museum of Ice Cream, Barkshop Live, Glossier you, Louis Vuitton X Supreme and Ikea Play Café.
Now that you’re ready to explore, take the leap, plan, execute, analyze your results and know the next step forward!
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