Picture strolling through your local shopping center and stumbling upon a store that wasn't there yesterday—a vibrant space showcasing exclusive products that will vanish in just a few days.
This is the thrill of pop-up retail, where the temporary is prized and searched for.
As a retail investor, staying current on emerging trends within the retail industry is vital. By better understanding the components of retail trends like pop-up retail, investors can ensure they are partnering with the most innovative firms.
In this article, we’ll explore pop-up retail, how it works, why it matters to investors, and why it has become a trend in shopping centers and malls.
Pop-up retail refers to a temporary retail space set up for a limited time, usually a few hours to a few weeks. These stores "pop up" in vacant retail spaces and disappear when their time frame is up. The concept is designed to create a sense of urgency, drive foot traffic, and generate excitement among shoppers.
Pop-up retail isn't just another business trend—it's a revolution breathing new life into shopping centers worldwide. These establishments manifest like retail magic, creating destinations and attractions that last from a couple of hours to several weeks before disappearing without a trace. This exclusivity and rarity often generate a sense of FOMO (fear of missing out) among shoppers, who will keenly watch for pop-up events to attend. This type of retail's strength lies in its reminder to shoppers: nothing is permanent, so enjoy opportunities when they arise.
Pop-up retail can take different forms depending on the retailer's goals. Well-known brands launch some pop-up stores as part of a marketing campaign, while others may be used by smaller businesses or startups looking to test the market.
For instance, during the holiday season, a pop-up store may feature seasonal merchandise or holiday-themed products, creating a unique shopping experience for customers. On the other hand, a brand may launch a pop-up to promote a new product line or engage with customers more effectively.
While the power of pop-up retail lies in the variety it holds, the location of pop-up retail environments usually falls into the following spaces:
In shopping centers and enclosed malls, there may be designated pop-up spaces where different businesses rotate in and out regularly. These spaces are often marked as temporary, and the turnover creates a fresh and exciting customer experience.
The beauty of pop-up retail lies in its flexibility. A luxury brand might transform a space into an immersive art installation for a weekend, while a local artisan collective could set up shop for a month-long holiday market. The possibilities are as endless as the imagination, offering a platform for innovation and experimentation.
Pop-up stores offer several benefits to retailers, shoppers, and shopping centers:
Pop-up retail allows businesses to set up shop without a long-term lease commitment. This is especially beneficial for small businesses, startups, or online brands that want to try physical retail without the overhead costs associated with permanent storefronts.
Think of pop-up retail as the ultimate "try before you buy" for businesses. Established brands and ambitious startups alike are discovering that these temporary spaces offer a golden opportunity to:
For shoppers, pop-up stores offer a unique and ever-changing experience. In an age where almost everything is available at our fingertips, pop-up stores bring back the excitement of the hunt. They transform ordinary shopping trips into treasure hunts, where customers might discover:
Additionally, the obvious ticking clock nature of pop-ups creates a sense of urgency for consumers. The temporary nature of pop-ups makes them feel like some sort of exclusive club for shoppers swift enough to visit the attractions.
In some shopping centers, pop-up spaces are regularly filled with new tenants, meaning customers can expect a different experience every time they visit. This variety helps drive foot traffic and keeps shoppers engaged with the center, and pop-up retail tenants also benefit a shopping center's health in other ways.
By adding pop-up spaces to their property, property owners are enabled to:
Pop-up retail is a great way for shopping center owners to utilize vacant spaces that would otherwise generate no income. Instead of leaving a retail space empty while waiting for a long-term tenant, landlords can lease it out on a short-term basis to pop-up tenants. This provides a steady revenue stream while keeping the shopping center lively and active.
Pop-up stores can serve as mini-case studies, testing what kinds of retailers and products the local community responds best to before the property owners bring in permanent tenants that fall within that category. This “testing the waters” method comes with significantly reduced costs compared to the complicated process of opening a permanent store.
Additionally, pop-ups are a great way to gather data about customer behavior. By using pop-ups to determine what their customers like or don’t like, shopping center owners can leverage these insights to shape their future development and tenant mix.
For example, if a company believes a significant desire for a bubble tea shop within their mall's community, they might host a 4-week bubble tea cafe pop-up. If the community responds very positively to this event, there is a large likelihood that this type of retailer will be successful within the property.
On the other hand, if the event is not a success, it is easy to shelve the idea of a bubble tea store and try some different type of pop-up that might be received better by the shoppers in a specific community.
By staying updated on what customers want, you are empowered to ensure that the investment firm you partner with considers these wants and implements them into its overall retail strategy.
Pop-up retail is changing not just how we shop but also how we think about retail spaces. In a world where change is the only constant, these adaptable, exciting, and temporary stores prove that sometimes life's best things aren't permanent.
For retailers, it's a chance to write their own rules. For shoppers, it's an opportunity to be part of something special. For shopping centers, it's a strategy that turns spaces into destinations and customers into communities. For you, as an investor, it empowers you to discover the needs and desires of shoppers in a community. Pop-up retail gives investors and shopping center investing firms the edge to stay informed on trends within the retail sector and specific properties.
As we look to the future, one thing is clear: pop-up retail isn't just a trend—it's a transformation. In a post-COVID-19 world, we have entered a retail landscape that increasingly values experiences over transactions; these temporary spaces create lasting impressions that keep shoppers returning for more.