The Power of Pop-ups: From Fad to Retail Mainstay

Pop-up stores or “flash retail” have graduated from passing trend to popular practice. Historically utilized for the sale of seasonal products (think temporary stores that only sell Halloween costumes), the pop-up has evolved into an attractive option for retailers of all shapes, sizes and experience. Smaller, emerging companies have jumped on the pop-up as an affordable, low risk option to introduce new brands and test new markets, but the benefits have caught the eye of even the biggest and most sophisticated of retailers. Just this month Amazon announced that it would be opening 100 pop-up stores in U.S. malls to promote its hardware devices. Their goal?To use the pop-up as a means of reaching consumers on multiple access points to inspire them to shop more online.

The advantages for retailers are diverse. Temporary by design, pop-ups provide retailers with an opportunity to roll out a new brand without the cost associated with a long-term lease. There’s also an inherent buzz generated by the idea of a new product line that will only be available temporarily. Bostonians recently witnessed this frenzy with Kanye West’s Back Bay pop-up introducing his new clothing line. Shoppers camped out overnight and lined the city blocks in Boston’s Back Bay to see and purchase Kanye’s new “Pablo” apparel. Uniqlo, a Japanese retailer that deals primarily in casual wear, recently used a pop-up concept in Faneuil Hall as a means of introducing their brand before opening more permanent locations in malls in Natick and Chestnut Hill.

Restaurants have also taken great advantage of the pop-up. Eateries such as Gather, Commonwealth and Juliet have hosted specialty pop-ups where ramen, sushi, tacos and other tasty treats are served for just a few nights or by invitation. Boston’s South End based restaurant “Wink and Nod” took the pop-up concept one step further by inviting budding restaurant groups to run their restaurant kitchen every 6 months in the hopes of giving new chefs a chance to showcase their talents. As Deborah Byrnes of Retail Resource Inc. noted, the pop-up restaurant concept embraced by Wink and Nod is “a great way to get investors.”

The pop-up may be an attractive option for many retailers, but the role they play for landlords is more complicated. On one hand, pop-ups can quickly fill vacancies, often with the possibility of tenants converting to long-term leases. Often, pop-ups do not require much by way of build-out or financial investment by the landlord. Landlords need to realize that this kind of short term occupancy does not require a lease with the same complexity as that for a 10 year deal. Rents tend to be lower for pop-ups, and they are a short-term solution to vacancies that most landlords would prefer filled with long-term, creditworthy tenants. Some landlords may consider that, on a short-term basis, some rent is better than none, and “lights on” is better than a dark store. Pop-ups also allow landlords to fill a vacancy while simultaneously marketing the space to long-term occupants. Pop-ups can also bring in local tenants and new concepts, and the buzz generated by a new brand can put a shopping center on the map.

The pop-up has changed dramatically from the days of Halloween masks and holiday calendars. Today’s pop-up stores are highly adaptable and impactful, allowing retailers and landlords the flexibility to foster new and creative concepts in a constantly evolving market. Time will tell, but the pop-up may have evolved from being a trend to a common practice here to stay.

Related topics: Landlords, Pop-up Retail, Real Estate, Restaurants, Retail, Retail Sales