Woman shopping at a local pop-up shop

Retail reinvented: What we can learn from popular pop-up shops and how to start your own

Tuesday, February 14, 2023

The scene: Saturday morning, 8 AM. A quiet city street normally reserved for dog walkers and coffee runners at this hour. But today, there’s a line 80-people deep already inching around the corner. Video game release? Book signing? Celebrity pug sighting?

Nope: It’s the grand opening of the city’s newest retail pop-up store: a jewelry brand that counts Grammy winners, celeb influencers and other A-listers among its customer base. And it’s in town for two weeks only.

What’s the draw? Why the commotion? And could your business benefit from setting up something similar?

Today, we’re talking pop-up shops: what they are, who they’re for and why they’re successful.

Let’s start at the beginning.

Icon of three woman entering a store to shop

A pop-up shop is any sort of temporary retail space. That could be a brick-and-mortar store, kiosk within a larger store or shopping center, even a shop on wheels. Both small businesses and large enterprises use pop-ups to expand their physical presence, build brand awareness, launch pop-up experiences and more.

Part of the allure can be tied to the here today, gone tomorrow scarcity threat. Their fleetingness creates a sense of urgency, a risk of FOMO for shoppers. And for many retailers, the short-term investments have paid off.

80% of companies that have opened a pop-up store said it was successful.

Storefront

Two men looking at items together in a store

Why should I open a pop-up shop?

From marketing campaigns to data collection, the benefits of retail pop-ups are ample and tempting. They are a relatively low-risk and low-cost way for retailers to test new locations, markets, concepts or inventory before committing to a long-term lease or other big business moves. Here are just a few examples of how retailers could benefit:

Pop-up events are a creative marketing strategy

Beyond being great outlets for testing new markets, pop-up shops can be a fun addition to your marketing efforts — especially for specific launches you want to build buzz for. That could include:

  • New products or collections

  • Collaborations with other brands

  • Partnerships with influencers, bloggers or other public figures

Types of retail pop-ups

Icon showing a store front

Short-term brick-and-mortar storefront

Icon of two stores side by side

Store within a store

Icon of a kiosk

Shopping center kiosk

Icon of a food truck

Mobile store

Icon of a both with two employees

Booth at a holiday market

Icon of a display holding products

Display at an event

Move through old inventory (fast)

Excess inventory sitting around with a new season creeping closer? Rid yourself of it with a warehouse sale. Often just a day or two, they’re a low-cost, high-impact way to draw a crowd and quickly get rid of stale merchandise. No need to get fancy with it — even luxury brands are known to hold this kind of pop-up sale in literal warehouses, empty offices or other modest industrial spaces.

eCommerce and direct-to-consumer (DTC) businesses can test a move to physical retail

  • For an ecommerce business that has only ever sold online and is considering shifting into physical retail, a pop-up store is a great way to test the waters and decide if a storefront is a smart move.

  • Because they naturally attract foot traffic – especially in a high-traffic shopping area or downtown – a storefront can serve as a new marketing channel for a startup retail brand that wants to boost brand awareness

  • Some online retailers open pop-up spaces during the holidays to give their customer base the opportunity to touch, feel, browse and shop for gifts in-person.

  • It’s rare for an ecommerce brand to have one-on-one conversations with customers, so connecting with them in a physical setting is a useful way to gather feedback (which can’t be replicated with a customer service chatbot). This is even more helpful if you’re an apparel or footwear retailer that can now get real-time sizing feedback. Or if you sell goods like candles or beauty products, seeing shoppers’ initial reactions to things like scent and texture can be extremely valuable for future inventory planning.

Opening a pop-up shop is approximately 80% less expensive than opening a traditional brick-and-mortar store.

Retail TouchPoints

Established physical stores can identify new, profitable markets

  • Whether you have one storefront or twenty, it’s critical to do extensive market research before opening an additional location. And what better way to judge a new region – or even a particular shopping district – than by actually setting up and selling there? Signing a short-term lease for a temporary store is a safeguard: Imagine committing to a long-term physical space, only to find within the first few weeks that your target audience really wasn’t there.

  • Capitalize on a swell of foot traffic without committing to a year-round store when you open a pop-up in a seasonal town. There’s always demand for retail in vacation areas, so summer locales like The Hamptons and ski towns like Vail are no strangers to pop-up shops.

Wholesale brands experiment with direct selling

If you use resellers to market and sell your products but have considered dipping your toes into direct sales, a pop-up location may be a great option for you. In removing the middleman, your margin will soar, but you may find that the cost of renting and staffing a retail store isn’t worth that trade. Only a pop-up experiment will tell.

hands holding a mobile device to take a picture of a crowd in a store

What can we learn from the most successful pop-up shops?

The most successful pop-up shops create experiences unique to their individual locations. That could be as simple as cheeky signage and creative design elements or exclusive merchandise and celebrity collaborators. Here are a few pop-up shop ideas inspired by brands that are paving the way.

Do it for the ‘gram

From Adidas’ lifesize shoebox store to Glossier’s flower-covered London location, an Instagram-worthy pop-up space is key to its marketing strategy — even more so if you cater to millennials and younger. Because in the same way that 40% of people under 33 prioritize “Instagrammability” when choosing a travel destination, they’re also increasingly interested in retail experiences they can adorn their feed with.

Plus, user-generated content is poised to be one of 2023’s biggest social media trends, and business owners are finding that customer influencers can be just as – if not more – valuable than traditional bloggers and influencers. And when you’ve got customers organically posting about your business on their own social media accounts, that’s free marketing. So give them something to talk about!

Tip: Create a hashtag specific to the pop-up, and display it with your Instagram handle in a few places around the store.

Offer exclusive merchandise

Hill House Home, an apparel and lifestyle brand that recently moved from online only into brick-and-mortar retail, created limited-edition dresses for their Nantucket pop-up, available to purchase only at the island location. The idea of securing a “collectible” was so incentivizing for the brand’s cult following that they later announced plans for pieces exclusive to their Palm Beach and New York locations.

One in three people under 40 will pay more for a limited-edition product.

YPulse

Give shoppers a hands-on experience

Take a page out of jewelry brand Little Words Project’s book: Their pop-up shops feature on-site customization bars, where shoppers can design their own bracelets. Similarly, skincare brand St. Ives’ summer pop-up featured the St. Ives Mixing Bar, which let customers create custom body scrubs and lotions. And at Chanel’s four-day Chanel Beauty House experience, guests were invited to have their new makeup purchases applied in one of the pop-up’s makeup artist cabanas, before heading back inside to pose in a Chanel-branded photo booth.

The lesson? Pop-ups have to be more than transactional. Today’s shoppers crave experiential retail. They grew used to the ease and comfort of online shopping during the pandemic. So if you’re going to lure them to your physical store, it’s a good idea to give them a memorable experience that they won’t find elsewhere.

Add a philanthropic element

A slider icon demonstrating 73%.

73% of Americans consider a company’s charitable work when making a purchase.

Smart retailers are keeping that stat in mind as they strategize their pop-ups. Shoe retailer Keds worked with media brand Refinery29 on an International Women’s Rights Day pop-up that benefited She Should Run, which champions women who want to run for public office.

On the other side of the pond, Harrods created a month-long extension of its department store in London, with all proceeds benefiting child protection charity NSPCC. Think about nonprofits that align with your brand values, and consider how you could partner with them.

Collaborate with another retailer to create a pop-in

You don’t have to have your own free-standing store to see success with pop-up retail. Many businesses have experimented with pop-in shops: a small retail space within a host store. Furniture retailer West Elm created West Elm LOCAL, which invites local artisans to showcase and sell their works in various West Elm locations. And Nordstrom’s Pop-In@Nordstrom is an ongoing series of temporary pop-up shops showcased in the larger department store. It has given brands like UK-based Liberty London, for example, an outlet to test its products in the US market.

Two woman finalizing their purchase with a

How to set up a pop-up shop of your own

Rent or reserve a location

By now you can probably see that there are plenty of types of pop-up shops to choose from. If you’re interested in renting your own brick-and-mortar store, start by connecting with a real estate agent or property management company to identify vacant storefronts in your target neighborhoods and shopping centers.

Lucky enough to be based in an area with an existing pop-up collective? Consider getting on the waitlist for an open space. Not only will you benefit from the shopping center’s existing foot traffic and management company’s marketing efforts, you’ll also be surrounded by fellow retail entrepreneurs you can network with and learn from.

If you’re feeling overwhelmed by the idea of any lease – even a short-term one – think about participating in a local holiday or other seasonal open-air market. You’ll still reap many of these benefits and – like in a pop-up collective – benefit from the press and traffic the market is already driving.

Choose your duration

“Here for a limited time” just doesn’t promote the same sense of urgency as “Here until March 31 only.” If you end up seeing success and choose to extend your tenancy, go for it — but advertise an end date so interested shoppers know to hurry in.

Secure your pop-up shop point of sale and payments technology

You don’t have to have a permanent location to reap the benefits of modern retail technology. Your pop-up needs a mobile, cloud point of sale and card reader to process transactions and manage inventory remotely. Look for one with the following features:

Mobility and reliability: Especially if your pop-up is mobile, or you’re setting up shop in some sort of open-air market, you need an iPad/tablet-based POS. Be sure to secure a backup internet source, like a hotspot, should wifi be spotty.

Secure payment processing: Get a payments solution that allows you to quickly and safely take credit card and digital payments from anywhere.

Cloud inventory management: In planning your pop-up, the source of your inventory is one of the first things you’ll have to decide: Will you use existing stock? Place new orders? Heartland Retail makes it easy to transfer inventory between locations and channels, and easily receive it upon arrival. After you open and start to get a feel for demand, the real-time visibility will help you pivot quickly and place reorders or additional transfers as things are (or aren’t) selling.

Real-time metrics: If you’re selling in multiple places, you want to be able to keep an eye on all of your locations and channels, no matter where you are. A cloud POS with real-time data gives you a holistic view of your entire business — turns out that with the right technology, you can be in two places at once.

Robust reporting: Whether it’s one day or one month, your pop-up is going to feel like a whirlwind and be over before you know it. With a POS like Heartland Retail, you can rest easy knowing that the system is collecting detailed sales, inventory and customer data with every transaction. When your pop-up wraps, you’ll be able to report on and analyze all of those metrics, helping you make better decisions for future events.

User experience: Temporary pop-ups often rely on temporary staff, so you need a user-friendly (but feature-rich!) system that’s quick and easy to set up and train employees on.

Keep in mind that while pop-up experiences can (and should!) be fun, at the end of the day, you want to see conversions: browsers turning into buyers. Don’t get so caught up in building a photobooth and choosing a catchy hashtag that you lose sight of your sales plan and overall goals for the venture. Remember to remain true to your brand, stay on top of your inventory, make pivots when necessary and give customers a way to continue shopping with you after your pop-up wraps.

Good luck!

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Heartland is the point of sale, payments and payroll solution of choice for entrepreneurs that need human-centered technology to sell more, keep customers coming back and spend less time in the back office. Nearly 1,000,000 businesses trust us to guide them through market changes and technology challenges, so they can stay competitive and focus on building remarkable businesses instead of managing the daily grind. Learn more at heartland.us