Pop-Up Stores Provide Lucrative Alternative For Small Businesses

Temporary spaces serve as effective marketing tools

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Curvel Baptiste, co-owner of shoe manufacturer MilkShakeNYC, uses pop-up stores to market company products. (Source: MilkshakeNYC)

Here today, gone tomorrow. That’s almost how you could describe the latest retail store trend sweeping through New York and the rest of the nation.

Savvy entrepreneurs and larger retailers are opening up temporary stores, or “pop-ups” in empty storefronts, simultaneously boosting their brand and bottom line. The stores can last anywhere from a few days to a few months. And with the U.S. retail vacancy rate at 7.6%, for the third quarter of 2009, compared with 6.4% for the third quarter of 2008, according CoStar Group, Inc.– and the holidays just around the corner– now might be the best time to take advantage of the weak commercial real estate market.

“Normally a lease for retail space would span 12 to 36 months,” says George Ratiu, an economist at the National Association of Realtors. “Now landlords are willing to do 10 to 20 days.”

Pop-up stores are not new or uncommon in Manhattan, Paris, London, and Tokyo where the world of high fashion pervades. National brands with large marketing budgets have been utilizing the concept for years, but now that retail vacancies have increased and rents have decreased, smaller companies are starting to participate, too.

“Due to high vacancies in the retail sector this [pop-up] concept has taken on a broader appeal to a lot of merchandisers, particularly when landlords in the retail space are eager to fill space even on a short-term basis,” Ratiu says.

Curvel Baptiste, co-owner of MilkshakeNYC, a women’s sneaker manufacturer, launched pop-up stores in Washington D.C. and Brooklyn, New York, over the summer. At the Brooklyn location he rented a garage/art gallery for a little over $1,100 for three weeks, but grossed $1,200 a day.

“Retailers use pop-up stores to not only sell products … but to market their brands with promotional events and evaluate the local market,” Baptiste says.

Gucci, Target, the Gap, and Uniqlo are just a few of the many retailers that have launched pop-ups in New York in the past few years.

MilkshakeNYC, which doesn’t have a retail showroom, plans to open a pop-up store for two months in Harlem for the holidays.

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