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Find the Perfect Space for a Pop-up Store

The pop-up store concept has been around for years, but new online tools make these retail experiments much easier.
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Pop-up retail is not a new concept. Entrepreneurs have set up Halloween- and holiday-themed stores in malls for decades. Larger stores have run pop-ups in the U.S. since at least 1999.

But now it's getting easier to experiment with temporary space and new retail concepts: New websites are popping up to help match retailers with the property owners.

One of the matchmaking sites, Storefront, focuses on e-commerce operators out of practical accident: The founders came from an e-commerce background and the company is located in San Francisco, a hot area for online activity. Also, they noticed that some big names in e-tailing--including Bonobos and WarbyParker--had experimented with pop-ups.

"One of our big partners is Westfield [shopping malls]," says Tristan Pollock, Storefront co-founder and COO. "What we're bringing to them is a lot of these hot companies. It could be a hot local company with a following or a national company. There are thousands and thousands online that haven't come offline [at all] or a lot, so right now it's a big deal."

Why You Should Go Offline

CocoTutti is one of those hot companies. The San Francisco-based chocolatier has used a combination of online sales and pop-up appearances at events and local wineries to do business. Owner Elyce Zahn learned of Storefront from a mutual contact. She decided to give a Christmas pop-up a shot.

"The store front was one shop away from Bloomingdales in the center of the city [in] the Westfield shopping mall that everyone goes to," she says. Next door was the new restaurant of chef Martin Yan. The space was $500 a day, down from a normal $1,000 a day.

""We did the equivalent amount of business that we would do in a show with 8,000 people in half the time and people that actually came into our shop were one-tenth of the people," Zahn says. Gift buyers picked up items ranging in price from $2 to $150.

Even though the store was temporary, she has gained some ongoing business from it. She received inquiries in the weeks leading up to Mother's Day. "I'm getting some people contacting us... for birthday gifts, and someone wants to do a chocolate and wine pairing," she says.

The Pop-Up Business

Westfield San Francisco Centre has found the arrangement to be beneficial in a number of ways. "We're in a unique position that our center is very healthy in the way of occupancy," says Shelly Schembre, vice-president and senior general management, "but we certainly have transition of space and movement in the Centre." Pop-ups can fill in temporary vacancies of so-called in-line space and the mall's common areas, which helps maintain revenue.

Pop-ups not only bring in revenue but also allow Westfield to cultivate future retail business. "We're developing a platform where we're cultivating the retailers of the future," Schembre says. "These retailers that we're sometimes working with are looking to dip their toe in things. Providing that space and not having them commit long term for a lease for multiple years is a win-win. We hope to be able to establish a platform where some online retailers or new products want to expand their success and grow their business in a shopping center."

Expect to see more online companies testing the traditional retail waters, though Schembre notes that the e-tailers will need to consider a few things before doing a pop-up:

  • Be thoughtful about how to represent the brand. Working in a temporary space with foot traffic is much different from online marketing.
  • Get good salespeople who can help products "resonate with the customer."
  • Have the right level of merchandise, with a mix of offerings and enough inventory on hand to satisfy people.
Last updated: May 28, 2013

ERIK SHERMAN | Columnist

Erik Sherman's work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, and Fortune. He also blogs for CBS MoneyWatch.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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