The experience economy is here, and pop-up shops are set to surge
In a world where Experience-Market fit is becoming increasingly important, pop-up shops can help your brand stand out.
?As human beings, we crave stories. We love the brands that tell us the best stories, and in doing so, make us resonate with them at an emotional level. In the words of marketing guru Seth Godin,
?The best companies (read Amazon, Apple) have always understood the importance of building immersive and compelling experiences for their consumers. Over the past decade, consumer needs have changed substantially, as have the number of options available to them, no matter the product or service they are looking for. Having an excellent product or service is usually no longer enough; we’re increasingly seeing that brands that provide memorable experiences to their customers are the ones that stand out. The lure of experiences for customers has only been accelerated by the global pandemic, which has further increased people’s appetite for real-life connections and experiences.
?This series of articles covers thought leadership on the experience economy and aims to equip you with important insights on Experience-Market fit, showing you exactly how to achieve it for your brand. You’ve got a broad introduction to thinking in terms of experiences rather than products or services vis-à-vis market gaps, and you’ve learned how brands become ‘experience disruptors’ from this article. It’s now time to delve into one particular format of building Experience-Market fit in a way that is quick, inexpensive, efficient, and complementary to the increasingly hybrid physical-digital world we live in – the pop-up shop.
Building a human connect in the new world of shopping
There’s no arguing that the world of retail has changed. The pandemic has accelerated technology trends and the whole world now connects and shops online. Children go to school online. Grandparents connect with their friends over zoom meetings. We order in from Uber Eats. We have our groceries delivered to us. We watch Netflix, or listen to Spotify, and we pay using digital wallets. E-commerce now largely drives product and service sales. More and more shopping has migrated online, driven by easy access, convenience, and safety preferences. However, the more online and tech-driven our lives become, the more fragmented and lonelier they seem to get. And the traditional brick-and-mortar store still does play an important role: it helps us with brand trust, sales guidance, and gives us a chance to see, feel, touch, and smell exactly what we’re buying, be it a couture wedding gown or a specific shade of paint color.
?The world of consumption has been made complex to navigate; on one hand, consumers now expect a frictionless experience made possible by online shopping, on the other, they have a sense of pent-up need to have real-life experiences. Brands that understand this dichotomy and are able to identify and address Experience-market fit by delivering memorable experiences will successfully evoke strong emotional and lasting bonds with their audiences. The pop-up shop can help do exactly this.
?The pop-up shop is a retail format that sits perfectly poised between the new online and traditional permanent offline store formats – its temporary, physical, bold, disruptive, multi-sensorial and deeply immersive. It provides the excitement of something novel, exclusive, and ephemeral which ensures that people stop and pay attention. It can be an invaluable tool to build personalized human connects, offer old-school style face-to-face assistance, and get real time feedback – essentially drawing customers into deep conversation and connection with the brands they represent.
Why are pop-up shops so captivating?
If you’ve been to an excellent pop-up exhibit, chances are, you’ll never forget the store or the brand. For instance, imagine spending time walking through a Russia-based ski-resort’s exhibit made of massive ice blocks, on which a thousand travel-related dreams of people from around the world have been carved. Or, imagine going through Nike’s exclusive 3-day display of shoes,
where you’re first presented classic Jordans dipped in gold, followed by pairs owned by Michael Jordan, then by All-Star themed new releases, to then be finally led to your very own customization centre [1].
Such experiences make it hard for customers to forget the brands, not to mention drastically increase people’s intentions to book those ski vacations or buy those customized shoes.
As demonstrated brilliantly by these brands, a bold pop-up shop makes for excellent Experience-Market fit and phenomenal brand recall. It builds excitement and urgency in the minds of customers. Further, each pop-up shop is usually very unique and therefore memorable. A pop-up shop could take the shape of a press-review, or a workshop. There could be play with lighting, signages, sounds and displays. There could be curb side pick-ups, appointment-bookings, or digital payments to combine experiential aspects with those of safety. In this new experience-driven economy, pop up shops captivate us so much because the products or services they display promise us the experiences we didn’t know we craved.?
The (many) functions of a pop-up shop
As a brand, you’re likely on the look-out for new and effective ways to reach your customer, which only seems to be getting harder to do. At the end of 2020, organic reach was following a declining trend, with the average reach of an organic Facebook post down to 5.2% from 7.7% two years ago [2]. Further, just building reach isn’t enough, you need to build connection. Brands that are able to build genuine, one-on-one connections with customers report a compounding effect in their returns on ad-spends, sometimes by as much as 5X. You can certainly build online presence to have your customers learn about products through social media and search engines, but complementing your online presence with a physical, immersive, offline experience to match is an excellent way to reach and connect with an engaged audience.?
Enter the pop-up shop.
As an entrepreneur, you may have toyed with the idea of a pop-up shop at some point in your journey. There are several drivers that could have triggered your interest. Many such shops are set up by brands for a trial-run prior to the launch of a larger brick-and-mortar store. Some are set up to build some buzz around a new limited-edition collection. Others help their companies with in-person, accurate, and real-time feedback from their customers. Yet others have been found to successfully lower their brand’s average customer acquisition cost. They provide efficient channels to experiment with pricing or product-bundling. They’re a great way to study brand acceptance in a new market. All of these have always been extremely valid reasons to set up pop-up shops, and they’ve been further underscored with a rising demand for immersive experiences in a post-pandemic world.?
A 6-step guide to get you onboard the pop-up shop wagon
Now that you’re convinced you need a pop-up shop to have an edge in the experience economy, it’s time to build your first one.
You’ll need to come up with a strategy; the more experiences you offer your consumers, the more they compound, so you want to avoid going with only one event. Think of the Facebook algorithm; it has a ‘learning phase’ for one to two weeks, after which it begins to optimize based on your objective. The longer you keep your ad sets active and the more optimization events you generate, the easier it is for Facebook to optimize your campaigns, reducing your cost per event and getting you more efficient results. The same applies to your pop-up events in real-time.
You want to think through your roll-out, factoring in the ideal number of exhibits, locations, themes, and budgets you want to work with. Here’s how to get started.
#1. Look for inspiration?
One of the earliest pioneers of the pop-up phenomenon was perhaps the luxury brand Louis Vuitton with its exhibit at Chicago’s West Loop.
The brand set up what looked like a usual boutique store, with a few differences; the traditional brown shades had been swapped for bold orange ones emblazoning the ‘LV’ logo, and fashion had been merged with art in the way it was presented via a gallery experience. The main difference however, was that this store was only open for 30 days; here was an experience that was not only new and more immersive to its consumers, but also very limited [3].
You want to think of your pop-up shop as the ultimate chance to get up close and personal with your consumers, while reiterating what your brand is made of, in a creative and urgent setting. There are several great examples for you to learn from. Fashion house Valentino, in an attempt to demonstrate its commitment to uniqueness, held a digital art exhibit in SoHo earlier this year, collaborating with Matthew Stone, who is known for digital paintings on linen. The beauty brand Glossier rose to fame with a pop-up shop in Covent Garden, London; the store is said to have attracted over a 100,000 consumers in less than three months. Even if your brand is not well-known yet, a pop-up shop can be a great way to build a name for yourself. BarkShop, an e-commerce-only brand, ?created its pop-up shop to provide a by-appointment physical space for dog-owners to bring in their furry friends, where they could pick out their favorite toys. Kanye West’s team went with pop-up shops across 21 cities to showcase his ‘Life of Pablo’ merchandise, and brought in over a million dollars in sales in two days. Fashion brand ThredUp went with offering in-pop-up one-on-one styling services after studying customer data and needs. In a particularly creative approach, color measurement and matching brand Pantone set up a pop-up ‘Pantone Café,’ allowing consumers to ‘taste’ Pantone colors and to provide them with a more sensorial experience [4].?
Each of these examples is an authentic and different way for a brand to connect with its audience while assessing Experience-market fit. You are limited only by your imagination.?
#2. Do your homework
Before you get your first pop-up shop up and running, you want to make sure you’ve done your homework well. Begin by setting the right goals – what do you hope to accomplish with your pop-up shop? How will you know it has been successful? What key metric are you hoping to hit – is it the number of new customers attracted, brand awareness built, or sales revenue earned? And how are you planning to measure this? Once you’ve given some thought to your main goal, spend some time on the following:?
Try to get the location advantage. Where you place your pop-up shop will mean its success or failure, and luckily, you should have a wide range of choices as the pandemic has led to a lot of commercial space being made available at lower rents and better terms at many places.
Get your numbers in order. A pop-up shop typically costs anywhere between ~$1,500 to ~$33,000 [5]. As you work your budget, remember to factor in location-based rent, upfront deposit, expenses for amenities and utilities, the size of the pop-up shop you need, and the duration for which you plan to run it.
Stay on the right side of the law. There are several legal documents you’ll need to have in order as a pop-up shop owner and operator. These will typically include a lease (or in some cases, a license) that will capture your commercials, liabilities and responsibilities, the relevant business permits to operate your venture as per your event ideas, and insurance documents for you to hedge against risks.?
Use design well to capture the imagination of your audience. There’s a lot you can do with the layout of your shop; leverage all design elements available at the site such as pillars or windows to create a truly exciting experience.
Don’t miss out on operational details. What product SKUs are you going to display? How will you ensure enough inventory and timely re-stocking? Are you going to accept payments in cash? Are there any safety measures you need to take? How can you make the check-out process faster? These might all seem like small concerns, but will add up to your customers’ overall experience with your brand and you want to make sure you give them a memorable one.?
#3. Choose the right shop spot
Once you have a shortlist of viable venues available for your pop-up shop and you start to filter these, keep in mind the fundamentals. For instance, if you’re launching a new vegan skincare brand, a street with several vegan cafes and yoga studios might be a good idea. Take a closer look at your existing consumer database (if you have one) – where do your customers spend a lot of time? Which spot can offer you the maximum footfall of your desired audience? Is a high street the best way to go, or would you be better off at a mall? Perhaps you could consider putting up a pop-up shop within an established brick-and-mortar store (a ‘pop-in’) that complements your brand. You could consider collaborating with a hotel, a gallery, or a public park, and if you don’t need to be tied to one spot, a rented truck could be an excellent choice as well.?
#4. Sell, sell, sell
There are many ways in which you can choose to market your store such that you draw in a large audience. You could consider press releases, conduct traditional advertising campaigns, collaborate with influencers, or enlist the services of local freelancers. Remember, it isn’t just the size of the audience you draw, but also its alignment with your brand – the ultimate goal, even though not an immediate one, is to get paying customers. So, in marketing your pop-up shop, try to reach your relevant audience where they’re most likely to see you, whether it’s on twitter or through a flyer at a library. Further, keep in mind that you want to keep the momentum around the awareness you’ve generated going even after you’ve taken off your pop-up installation, so to plan your social media roll-out and website articles accordingly. Consider how best you can get in (or stay in) touch with the prospective customers you met during your exhibit. ???
#5. Reflect on your successes (and learn from your mistakes)
Once you’re done with your event, it’s time to compare your performance metrics with the target goals you had in mind when you launched the shop. If you had set a sales target, evaluate how well you did in revenue by customer category, by date, and product line – what performed well, what did not, and why? Did any employees come up with particularly innovative ways of pitching your products or services? How much footfall were you able to attract? What constructive feedback did you receive? What’s being said on social media? How has engagement increased post your event? Learn from each exhibit so that you make the next one better.?
#6. Incorporate the human connection
Perhaps one of the most important next steps you can take following a pop-up shop exhibit is considering how to incorporate what consumers have loved about it into your brand and the experience it provides in a long-term manner. The popularity of pop-up experiences such as farmers markets, local bazaars, and food trucks has been attributed to the human desire to try new things, to interact face-to-face with sellers and other buyers, to chat over recommendations, and to experience something different or ‘fleeting’[6]. Pop-up shops show you that customers crave surprise, novelty, and spontaneity. The more you can figure out how to make your brand more human, the more it will thrive, and studying the performance of your pop-up shop can give you excellent clues.?
Typically, ~80% of the retailers that try out pop-up shops consider it to be a success in improving their brand visibility, product launch and customer connection[7]. It’s time for you to try out yours.
References
[1] The Cramer Team, 9 Incredible Examples of a Pop-Up Experience and Why We Crave the Ephemeral, Cramer, https://www.cramer.com/insights/9-incredible-pop-ups-and-why-we-crave-ephemeral-experiences/?__cf_chl_managed_tk__=pmd_bbe0060d4fc414555983a8778407a34841ead9be-1626692090-0-gqNtZGzNAvijcnBszQe6?
[2] Katie Sehl, Organic Reach is in Decline—Here’s What You Can Do About It, Hootsuite blog (2021). https://blog.hootsuite.com/organic-reach-declining/
[3] J. Brenner, Louis Vuitton opens pop-up in Chicago’s West Loop, Forbes (2019) https://www.forbes.com/sites/juliabrenner/2019/06/11/louis-vuitton-opens-pop-up-in-chicagos-west-loop/#1657b82e44c9
[4] Adrien Kerbrat, 23 Smart Pop Up Shop Ideas to Steal From These Successful Brands, Storefront blog (2017). https://www.thestorefront.com/mag/12-most-talked-about-pop-up-stores-2016/
[5] Alexandra Sheehan, Pop-Up Shops 101: Everything You Need to Know to Try Temporary Retail, Awaken Solutions blog (2020). https://www.awakens.co.za/pop-up-shops-101-everything-you-need-to-know-to-try-temporary-retail/
[6] Peter Merholz, The Future of Retail? Look To Its Past, Harvard Business Review (2011). https://hbr.org/2011/12/the-future-of-retail-look-to-i.html
[7] Mark S.Rosenbaum, KarenEdwards, and Germán Contreras Ramirez, The benefits and pitfalls of contemporary pop-up shops, Business Horizons Volume 64, Issue 1 (2021). https://doi.org/10.1016/j.bushor.2020.10.001