Part 1: Pop-Up Retail Basics
In many cases, pop-up shops may be treated as standalone events for independent retailers and major brands alike. However, the potential value of this retail format extends beyond a simple one-time opportunity to engage with customers in a specific market. Integrating a pop-up strategy into any on-going consumer business can be an effective way to generate excitement and drive interest among new and returning customers across multiple traditional and online channels.
Upon completion of the chapter, readers will be able to:
- Recognize differences between operating single location vs. multiple pop-up retail shops and channels.
- Identify the functions and uses of pop-up shops in omni-channel
- Demonstrate impacts of a pop-up shop on an omni-channel retailer.
- Identify implications of each consumer touch point in an omni-channel pop-up retail environment.
Setting the Context
The following video helps to set the context for the chapter with some considerations for integrating multiple channels with a pop-up shop strategy, which could include social media, an e-commerce site, direct marketing, etc.
In this example, a fictional entrepreneur who sells wigs and hair care products online meets with a consultant in an empty store space where she plans to open a pop-up. Her objective is to sell products but the consultant encourages her to consider how to use other channels to help drive customers to the pop-up as well as staying engaged with her business online post-purchase or after the temporary shop closes.
1. Pop-up shops for online-only, single or multi-location retailers
Depending on the current state and future plans of a consumer business, an omni-channel strategy may take various forms.
- For pure play e-commerce retailers, running a pop-up can serve as a means to reach new customers, grow brand awareness, evaluate the potential for additional temporary or permanent stores, and sell merchandise to those who expect to see, feel, and try an item before committing to make a purchase.
- Independent retailers with a single store may set up in an area that is frequented by its target customers with the aim of driving traffic to the permanent location, to test the viability of opening a second shop across town, or even to acquire new social media followers and newsletter subscribers to expand the reach of future communications and promotions.
- Multi-location retailers may look to pop-ups as a way to enhance hybrid shopping options with “click and collect” or product returns and exchange programs. They may promote the launch of a new private label product line through a series of pop-up shops and corresponding marketing campaigns or use pop-ups as a platform to partner with other brands and events to grow their business.
In each of these cases, the retailer must consider the integration of each touch-point and channel through which a customer might have a positive or negative brand experience.
Bell, Gallino, & Moreno (2014) have noted the relationship between information delivery and product fulfillment across different retail channels and that initial business models may lead to different nuances in how each is realized from a customer perspective. For example, they found that an online-first or e-commerce pure play retailer might “experience substantial benefits from an offline presence that simply showcases inventory.”1 Their research shows that having a strong omni-channel strategy is not just an option to consider but rather a key requirement for success as retailers determine how to integrate each element effectively.
In Figure 3.1, several examples of retailers in the Canadian marketplace have been listed within one of four quadrants. Each of these companies may develop different strategies and approaches for the integration of pop-up shops into their omni-channel efforts.
- The first quadrant represents traditional retailers (such as the TJX companies Winners and Marhsall’s) where customers acquire information about products and services as well as purchase these items in stores.
- The second quadrant shows hybrid models (including Loblaws and Canadian Tire) where customers might acquire some of their product information online yet pick up these purchases in a physical store location.
- The third quadrant flips this order by allowing customers to learn and sample products in an offline showroom environment such as a pop-up shop or traditional store front (e.g. Indochino and Warby Parker) before placing an online order that will be delivered to their home.
- The fourth quadrant offers examples of pure play e-commerce retailers (like Amazon and Wayfair) where customers browse and shop entirely online.
A 2015 report by Deloitte about Omni-channel retail suggests that for many retailers, having multiple integrated channels is critical to respond to customers demands and create a seamless experience, whether that means a traditional retailer must build an e-commerce platform or that an online retailer might experiment with temporary or permanent stores.2 With few exceptions, this is an important consideration for pop-up initiatives by retailers in any of the 4 quadrants listed above.
Indochino’s “Travelling Tailor” Pop-up Showrooms
The follow video is an example of how an online-first retailer like Indochino began using a pop-up strategy to create seamless omni-channel experiences for customers to see, touch and feel different fabrics before ordering a custom.
2. Functions and uses of pop-up shops in omni-channel environments
Chapter 2 introduced several of the formats and functions of pop-up shops. In the context of omni-channel environments where the pop-up is only one component of a larger marketing campaign or business model, retailers may employ strategies with the following functions in mind.
- Pop-up shops as a showroom to increase online sales.
With some product categories or consumer segments, selling merchandise entirely online can pose several challenges. Using pop-ups as temporary showrooms can help to build trust between new customers through face-to-face interactions and instill confidence in purchase decisions by presenting the quality and value of physical product samples.
- Generating excitement at pop-ups to drive traffic for other channels.
Whether it’s the launch of a new product line or affiliation with a high profile event, hosting a pop-up with exciting experiential elements can be a great way to drive customer traffic to permanent flagship stores, e-commerce sites, and a brand’s social media channels.
- Testing new store formats and operating procedures
In addition to using temporary shops for testing new products and potential markets, an omni-channel retailer may look to pop-ups as a way to experiment with new format ideas and customer policies. For instance, big box retailers may wish to test several small footprint store designs before expanding into new downtown locations. Traditional retailers may use a pop-up location to refine procedures, gather data, or conduct employee training programs before adding click-and-collect departments to existing stores.
- Launching new products or brand-extensions
Using pop-ups to highlight the launch of new products and brand extensions can be one way for retailers to generate buzz and media coverage. H&M is an example of a retailer that has used this strategy several times to promote new collections and create awareness about the expansion of the Men’s department prior to opening to a dedicated H&M Men’s store.
Malison (2017) has noted that the evolving role of physical stores is closely linked with effective integration of all channels – particularly as a place for completing a transaction, fulfillment of online purchases, building a sense of community, or as another step in a customer’s information gathering process that complements the “webrooming” effect of browsing online before narrowing one’s search and decision to buy a product in a local store.3 Each of these functions may be served through pop-up shops integrated with physical and online channels at retailers that traditionally fit into any of Bell, Gallino, & Moreno’s four quadrants.
The follow video offers an example of how retailers can offer personalized and seamless experiences to their customers through the integration of multiple channels and technologies.
3. The impact of a pop-up shop for an omni-channel retailer
Pop-up strategies can positively impact the growth of an omni-channel retailer’s business in several ways. As the founder of Indochino, Drew Green reported that a 3-year program of operating pop-ups across 18 cities helped inform the company’s plans to open 8 permanent showrooms, which quickly grew to account for nearly 50% of the total business.4
In a study reported by Niehm, Fiore, Jeong & Kim (2006) results suggest that pop-up shops may help build brand loyalty by catering to customers who increasingly seek unique, surprising, and engaging products and experiences.5
Korstrom (2016) noted another way to leverage an omni-channel, pop-up strategy was demonstrated by shoes.com, who decided to open several permanent physical stores that would would include a series of pop-ups within their locations to feature major shoe brands at an additional fee.6 By allowing a major brand to take over part of the store on a temporary basis, customers were consistently treated to new products and experiences and the retailer benefited from both a new revenue stream and a new way to generate traffic across the stores and online channels.
In a recent study of 46,000 shoppers, Sopadieva, Dholakia, and Benjamin (2017) reported that 73% used multiple channels and interacted with the retailer’s customer touch-points in a variety of combinations that led to increased spending both in-store and online – especially for those who used 4 or more channels – when compared with customers shopping a single channel.7
The importance of having an omni-channel strategy rather than treating a pop-up shop as a standalone event can be seen in multiple areas. As noted above, this may include finding new ways to make money in partnership with other stakeholders, the perfecting of new retail formats to help grow the reach of the business, and increasing brand loyalty along with spending per shopping trip among customers who interact across different channels.
4. Customer touchpoints across an omni-channel, pop-up retail initiative.
With many potential areas of opportunity and the importance of engaging consumers across multiple channels, pop-up retailers must carefully consider the purpose and implications of each customer touch-point they introduce. As noted above, shoppers who engage with a brand across several channels are likely to spend more than those who don’t; however, with each new touch-point can come added complexity with potentially negative implications. Poorly integrated technology, customer service issues with new staff, home delivery errors and more can all impact the overall brand experience. Thus, adding new touch-points through a pop-up initiative must take this into consideration to ensure that customer expectations are met to the same degree they would be in any of the brand’s other channels.
Woodside and Walser (2007) showed a positive relationship between a customer’s experience with a brand and the overall strength of that brand in his or her mind.8 Further, Niehm, Fiore, Jeong & Kim. (2006) noted that integrating experiential elements at every touch-point may be the most effective way to ensure that the retailer’s brand remains top of mind for customers5.
The following table provides some examples of the customer touch-points that may be present with a pop-up initiative for an omni-channel retailer.
|Pre-Purchase||Purchase Stage||Post Purchase|
|– Social Media Accounts
– Retailer Blogs
– Email campaign
– Word of Mouth
– Mass Media
– Public Events
– Mobile App
– Temporary Kiosks
– In-store Point of Sale
– Vending Machines
|– Emailed Receipt
– Loyalty Program
– Home Delivery
– Customer Surveys
In this chapter you learned:
- some differences between operating pop-ups for a single location retailer and those with multiple locations or channels.
- potential functions and uses of pop-up shops in omni-channel
- the impact a pop-up strategy may have on an omni-channel retailer.
- implications of each consumer touch point for pop-up initiatives.
- Customer Touchpoints
Mini Case Study
Tattoo Inc. creates and sells custom and pre-designed temporary tattoos. But unlike traditional, child-centered, temporary tattoos, these products look as real as permanent tattoos and stay on the skin for weeks before being washed away. The product’s uniqueness and the niche market they serve mean that finding the best geographical areas to reach customers is critical to expanding their business.
Tattoo Inc. is popular with their target market online; however, e-commerce sales account for less than 10% of total potential (estimated) sales. Identifying and operating in new markets can be costly, risky, and often lead to failure for a business with such unique offerings.
Tattoo Inc. wants to leverage their online success, find new ways to reach their target market, communicate their value proposition, experiment with tattoo designs to identify new best-sellers, and test certain geographical areas for potential brick-and-mortar stores in the future as an omni-channel retailer.
Pop-up shops come in various sizes and serve different functions. Tattoo Inc. launched several pop-ups in different markets, both in shopping malls and street-front retail spaces carefully selected by their marketing team in order to test and determine the best format and location for engaging with new customers.
The physical locations allowed Tattoo Inc. to build an even stronger brand presence and the novelty of the pop-up shop experience helped attract customers that may otherwise not have considered this type of product. The shops empowered the company to communicate their value and their brand, helped customers find designs they liked (and for Tattoo Inc. to identify the potential demand for new designs), increased their revenue streams, and identified potential permanent locations for brick-and-mortar locations. Tattoo Inc. was able to run several pop-up shops each year over the last two years, and managed to do so with a tight budget, limited time invested, and highly-valuable results.
Consider the following questions:
- What considerations should Tattoo Inc. make when deciding on a permanent brick-and-mortar location?
- List and explain 3 or more ways that a permanent brick-and-mortar location can increase Tattoo Inc.’s online sales?
- How can using a pop-up shop reduce the overall risk in identifying and setting up a permanent brick-and-mortar location?
- Bell, D., Gallino, S., Moreno, A. (2014). How to Win in an Omnichannel World. MIT Sloan Management Review. VOL.56 NO.1
- Deloitte. (Feb, 2015) Omni-channel retail: A Deloitte point of view. Retrieved from: https://www2.deloitte.com/content/dam/Deloitte/se/Documents/technology/Omni-channel-2015.pdf
- Malison, M. (Nov 2, 2016) How Retailers Can Adapt Their Brick-And-Mortar Stores as They Implement Omnichannel Strategies. Euromonitor. Retrieved from: http://blog.euromonitor.com/2016/11/how-retailers-can-adapt-their-brick-and-mortar-stores-as-they-implement-omnichannel-strategies.html
- Green, D. (June 20, 2016). How Indochino used Pop-Ups to Transition from Clicks to Bricks. Techvibes. Retrieved from: https://techvibes.com/2016/06/20/how-indochino-is-leveraging-pop-up-retail
- Niehm, L., Fiore, A., Jeong, M., & Kim, H. (2006). Pop-up Retail’s Acceptability as an Innovative Business Strategy and Enhancer of the Consumer Shopping Experience. Journal of Shopping Center Research.
- Korstrom, G. (July 18, 2016). Pop-up partnerships power omni-channel retail mix: Vancouver’s Shoes.com set to launch Toronto, Vancouver stores that sublease to other brands. Retrieved from: https://biv.com/article/2016/07/pop-partnerships-power-omni-channel-retail-mix
- Sopadieva, E., Dholakia, U., & Benjamin, B. (2017) A Study of 46,000 Shoppers Shows That Omnichannel Retailing Works. Harvard Business Review. Retrieved from: https://hbr.org/2017/01/a-study-of-46000-shoppers-shows-that-omnichannel-retailing-works
- Woodside, A. G., & Walser, M. G. (2007). Building strong brands in retailing. Journal of Business Research, 60(1), 1-10.