The Next Major Retail Trend: Pop Up Stores

No long term leases required, just a couple of weeks with low overhead.

A Gap Pop up store in New York

A Gap Pop up store in New York

Pop up stores are the next step from traditional retail distribution to internet distribution. While the practice has been around for a long time, in this economy the trend is becoming visible. National brandname stores like GAP, Ann Taylor and American Eagle, yes even Gucci is using the trend to either introduce a new line or close out an old one. Toys “R” Us is opening no less than 350 temporary Holiday Express Toy Stores, many of them in freestanding mall outlets and JC Penney used the experiment successfully during a back to school campaign in California.

The idea is not new, but with national brands getting into it, it has gained a sense of legitimacy.  Was it considered a bit shady in the past, a quick road to a quick buck? Well, today it is developing as a product test and brand buzz method.

No long term leases required, just a couple of weeks with low overhead. “They are making a short-term investment for what could be a long-term gain,” says Faith Hope Consolo, head of retail leasing at Prudential Douglas Elliman, who has been besieged with requests for prime pop-up locations throughout New York City.

“Pop-ups are a national phenomenon,” says Consolo. Well, considering that¬† Gucci is opening pop-up shops in Miami, New York, London, Berlin, Paris, Kong Kong and Tokyo, it may well be an global phenomenon.

As landlords and mall operators struggle to fill vacancies, and companies try to squeeze as much revenue as possible from the high-traffic holiday season, temporary retail outlets, or pop-up stores, are very much the rage. “Because of the significant empty-space issue across the board, pop-ups are an opportunity for both entrepreneurs and big brands to make some money without having to worry about the overhead of a five-year lease,” says Mike Kraus, retail consultant for allbusiness.com. Plus, if your store is going to shut down anyway, you don’t have to fret about bankruptcy.

Some Pop-ups will be tricky for shoppers, as return policies are often much stricter. If a temporary store is part of a chain, you can usually return an item to another location if the one you shopped at goes out of business. But if it’s a one-time operation, you’re out of luck. So enjoy the deals that these quickie outlets will be offering this holiday season and most probably into the new year. But pop-up shop at your own risk.

We see the pop-up stores as an intermediary answer to a changing retail structure with the inevitable end result of selling and buying on the internet taking over the majority of retail sales. The question of course will be, “What to do with the retail spaces currently available throughout the nation”? Yesterday I went to garage, yard and estate sales. There were 37 sales between Amelia Island and the eastern part of Yulee. We could ‘only’ do about 15 because of the distances between them. I can see retail space in strip malls turning into consignment shops and malls for weekend re-sales in the near future (5 years or so). In other words another layer of retail sales – the previously owned category.

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8 Comments

  1. helenotoole

    Things are changing everywhere due to the economic situation. Retail is looking for a flow to adapt to that will produce revenue. Pop Up's, I can see them happening more and more.

  2. Colin Clark

    Helen, it goes beyond that. And the reason is only partly the economy. It is partly opportunity and mobility as well. Just like the moving “nomadic” tribes of Farmers Marketeers. The overhead is minimal beyond the physical excercise and they bring their product to the customer (or as close as). We have trial tested the concept of huge urban and suburban malls and in the end they have proven to be too cumbersome in terms of distances, parking problems and inflationary price hikes because of the jump in overhead cost. Now internet has come along and product cost plus shipping to your front door is less expensive than the mall purchase. It is only a matter of time before this fact to sink in and change the retail structure. And that is what's happening right now. Unstoppable.

  3. tommylee

    The “Previously Owned” outlets maybe a very short term trend as will be the pop-ups since logistics will even become too costly in comparison to the online purchase. Retail as we know it from yesterday and today will not survive tomorrow against online shopping. The technology equation of exponential growth coupled with “seeking” trust by using social networks for personal experience/advice rather than trusting the one sided marketing messages is also “unstoppable”.

    Yard sales is a different “beast” altogether. The beast is based on SOCIALIZING. It is a “away from the computer” meeting people gathering event next to hunting for bargains. Question will be if “Yardsale or Garage Sale” organizers will go through the hassle of transporting their bargains to a Mall. I personally doubt it unless it is organized as a community sale “event”.

    Strip mall as prime commercial retail property will not survive in the “saving” trend.

    The owners of strip malls better come up with other futuristic uses and one I could think of is to turn them into “hands-on schools”. If not, the bulldozer will one day simply flatten them to to turn them back into “green parks” else the deterioration, the chance of homeless people taking them over to live in a “homeless community supporting entity” will become a reality.

  4. Ameliaprivateeye

    Mall retailers and the anchor stores especially, they all have websites. Factor in the crime level of a mall parking lot, and it is no wonder that many people I know now simply order online from the stores and brands they trust!

    This pop-up retail trend started years ago with flea markets. Some, like the one at Pecan Park Road or the one in Waldo, are in a fixed location, with permanent and temporary tennants (including the typical family garage sale) selling not only used items, but brand new stuff, still in the box, at reasonable prices… .

    Swap Meets, Flea Markets and Rummage Sales are sometimes temporary or they may be an annual event held in fields, parking lots and community centers. I think people are looking for value. They want to pay a fair price for goods and services; and savvy consumers know the bargains are best found nearly anywhere EXCEPT the large retail malls!

  5. helenotoole

    Things are changing everywhere due to the economic situation. Retail is looking for a flow to adapt to that will produce revenue. Pop Up's, I can see them happening more and more.

  6. Colin Clark

    Helen, it goes beyond that. And the reason is only partly the economy. It is partly opportunity and mobility as well. Just like the moving “nomadic” tribes of Farmers Marketeers. The overhead is minimal beyond the physical excercise and they bring their product to the customer (or as close as). We have trial tested the concept of huge urban and suburban malls and in the end they have proven to be too cumbersome in terms of distances, parking problems and inflationary price hikes because of the jump in overhead cost. Now internet has come along and product cost plus shipping to your front door is less expensive than the mall purchase. It is only a matter of time before this fact to sink in and change the retail structure. And that is what's happening right now. Unstoppable.

  7. tommylee

    The “Previously Owned” outlets maybe a very short term trend as will be the pop-ups since logistics will even become too costly in comparison to the online purchase. Retail as we know it from yesterday and today will not survive tomorrow against online shopping. The technology equation of exponential growth coupled with “seeking” trust by using social networks for personal experience/advice rather than trusting the one sided marketing messages is also “unstoppable”.

    Yard sales is a different “beast” altogether. The beast is based on SOCIALIZING. It is a “away from the computer” meeting people gathering event next to hunting for bargains. Question will be if “Yardsale or Garage Sale” organizers will go through the hassle of transporting their bargains to a Mall. I personally doubt it unless it is organized as a community sale “event”.

    Strip mall as prime commercial retail property will not survive in the “saving” trend.

    The owners of strip malls better come up with other futuristic uses and one I could think of is to turn them into “hands-on schools”. If not, the bulldozer will one day simply flatten them to to turn them back into “green parks” else the deterioration, the chance of homeless people taking them over to live in a “homeless community supporting entity” will become a reality.

  8. Ameliaprivateeye

    Mall retailers and the anchor stores especially, they all have websites. Factor in the crime level of a mall parking lot, and it is no wonder that many people I know now simply order online from the stores and brands they trust!

    This pop-up retail trend started years ago with flea markets. Some, like the one at Pecan Park Road or the one in Waldo, are in a fixed location, with permanent and temporary tennants (including the typical family garage sale) selling not only used items, but brand new stuff, still in the box, at reasonable prices… .

    Swap Meets, Flea Markets and Rummage Sales are sometimes temporary or they may be an annual event held in fields, parking lots and community centers. I think people are looking for value. They want to pay a fair price for goods and services; and savvy consumers know the bargains are best found nearly anywhere EXCEPT the large retail malls!

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