Pop-Up Shops Open Across the Country for Holiday Shopping Season

Temporary stores are great for testing new products and drawing new customers

popup shopChristmas Lights Etc.’s Atlanta showroom is one of many temporary stores that open during the holidays. Customers get to shop for a month-and-a-half, browsing high-end Christmas trees, lighting and other holiday decorations. The temporary store, or pop-up shop, pulls in additional sales and the company finds it’s good marketing for its core business of selling online and to commercial and wholesale customers, according to the Associated Press.

While consumers can expect to see a number of stores popping up between now and January 1st, the pop-up concept is evolving beyond a seasonal, holiday trend.

Pop-up shops are physical stores that retailers inhabit on a short-term basis, such as 30, 60, or 90 days. Some shops may even pop up for one day only. According to PopUp Insider, an industry newsletter, pop-ups can be holiday stores, concept stores, galleries, exhibitions, or cafe/​restaurant promotions, but they involve a tenant taking empty retail or commercial real estate, outfitting it to suit their business needs, and then operating the space on a short-term basis with a finite assortment of goods.

These temporary stores generally produce extra income, but small business owners increasingly use them as promotional tools and test labs for merchandise, AP reports. Manufacturers, designers and online retailers will often use pop-ups to decide whether to open an actual store.

Others, such as online retailers, use pop-ups to occasionally connect face-to-face with their sites’ primary clientele. These temporary stores can be used to introduce consumers to a retailer’s brand, as well as create a sense of urgency among consumers.

Entrepreneurs are increasingly shunning permanent storefronts for temporary establishments. According to market research in July cited by Reuters news service, the number of U.S. pop-up stores has grown from 2,043 in 2009 to 2,380 in 2012.

Vacancy rates at U.S. regional malls and local shopping centers fell to their lowest level since 2009 during the second quarter and third quarter, according to real estate research firm Reis. The national average annual cost of renting a 6,000-square-foot retail space in a strip center is $16.27 per square foot or $97,620 per year, compared to a little more than $1,000 to house a pop-up shop for four weeks.

Pop-up shops aren’t anything new, but a sluggish economy gave them a boost. “When we’re in good strong economic times, it is much more challenging to get a great location at a reasonable price,” says Patricia Norins, publisher of the Specialty Retail Report. “But right now there are tons of location opportunities, and prices have come down.” As a result, many landlords looking to fill vacancies are willing to agree to short-term leases just to get someone in the door, giving business owners a golden opportunity.

Interested in setting up shop short-term? Here is a quick guide to opening a pop-up shop.

Find the right location. Finding the right neighborhood or store location is critical to ensuring the success of a pop-up shop. This includes doing due diligence on area demographics, other retailers present in the neighborhood, visibility, foot and vehicle traffic. Do some ground work scouting for spots that fit your particular business. For instance, if you are opening up a pop-up cupcake shop you may want a refrigerator on the premises.

Scrutinize the landlord. Finding landlords with space for lease to temporarily house your wares can be a hectic process. Ideally, you will want a landlord who has done a temporary lease arrangement before. How willing is the landlord to offer lower rental rates on a daily or monthly basis? How flexible is the landlord when working with you to modify or improve the space? These are key questions that need to be asked during lease negotiations, and will weigh heavily in ensuring the success of your pop-up store.

Stock up. Pop-up shops demand a lot of effort for a little bit of time, in terms of stocking and moving inventory. You may be starting out with existing product to sell or maybe you’re starting from scratch. The amount of stock you will need depends on the size of your retail space and the length of time you will be in that space.

Get the word out. Alert potential customers to upcoming pop-up shops by sending e-mails to current customers, luring them with new products, low prices, and other incentives to check out your pop-up location. Use social media to heighten the excitement. Use Twitter to tweet your location and offer discounts.

Follow through. After your shop closes, make sure you follow up with people who visited your store. You want to capture email addresses and contact information at the point of purchase—or before they set foot out of the shop by offering some type of promotion. Engage customers by soliciting their feedback.

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