Pop-up shops: what are the advantages of this concept?

The retail market is increasingly saturated. With classic marketing and traditional sales models, companies find it hard to stand out from the mass of suppliers. But many younger customers prefer out of the ordinary shopping experiences. Shopping should be fun and therefore companies use pop-up shops to create exciting shopping experiences. By acting as though there is a limited amount of goods on offer as well as there being a time limit, this creates a feeling of exclusivity. Limited or special editions make the customer feel that they have acquired something special.

A pop-up shop (also known as pop-up store or pop-up outlet) is usually a shop or small warehouse where sales also take place. The business premises are temporary – trendy districts as well as backyard warehouses can be used as sales locations. Unusual locations reinforce the idea of the products on sale being extra special, which is exactly the impression pop-up shops want to give.

The sale always has a time limit – the pop-up shop therefore only exists for a limited period. Often the company's goods are only available to buy at this shop and the stock is limited: Customers therefore only have a short window of time to buy the products. Many large companies create a similar shortage of goods even in permanent shops by having changing themes or seasons: certain goods are only available in one season.

Product exclusivity through time limitation – this is the essential concept of many pop-up shops. This concept makes it possible to offer products profitably on the market without having to rent shop space in the long term. This makes it particularly suitable for start-ups, young designers, and other market participants who do not have permanent offline sales space available to them.

Pop-up shops can boost sales in the short term as well as serve long-term marketing or branding goals. Sales-orientated pop-up shops are designed to increase sales in a timely manner. They are also well suited for presenting new products or launching them on the market. The opening of a pop-up shop can often generate a great deal of media interest, which can be used to push new offers.

In the long term, media coverage benefits the development of the brand and also strengthens it. In addition, a pop-up shop is a good way to acquire new customers. It also allows larger companies to cost-effectively test new marketing strategies, sales concepts, and target group orientations, since a pop-up shop, unlike a permanent shop, does not represent a permanent investment. If a strategy doesn't work, there are no long-term consequences. However, successful strategies can be used later at other locations.

Evaluating the success of the shop is relatively uncomplicated: How many visitors did the store attract and how much turnover did the pop-up shop generate? These questions can be answered quickly. That's why pop-up shops are often used to test new products in the field. If successful, the concept can be pursued permanently (e.g. a permanent shop could be set up instead of a pop-up shop).

The low costs are another major advantage of pop-up shops: sales space and staff are only required as long as the pop-up shop is up and running. As the company is not tied to a location or retail space in the long term, there are no permanent costs for rent and maintenance.

In most cases, the advertising costs are comparatively low because pop-up shops benefit greatly from viral marketing. In social networks, pop-up shops are treated as community tips, and users point their friends and contacts in the direction of the shop of their own accord.

A prerequisite for this, however, is that you as an entrepreneur consider the needs of your target group when creating the shop. Because a pop-up shop deviates so strongly from usual stores, it rarely reaches a mass audience. Therefore, be aware of which target group you want to reach before planning your pop-up concept. Remember: Ideally, a visit to your pop-up shop is a special event for your visitors that will help you to promote your brand. The customer wants an experience that they can associate with your brand. So use your pop-up shop to connect new customers to your brand in the long term.

Each pop-up shop has its own content orientation, which is why it’s so exciting for customers to enter and explore these kinds of shops. Unusual sales locations and a limited or innovative product range provide a special shopping experience that stands out from the usual shopping experiences. That alone is incentive enough for many customers to visit a pop-up shop. Due to the exclusiveness and the limited variety of goods, visitors get the impression that they have just made use of a shopping opportunity that they might otherwise have missed.

Many customers don't just want to buy goods, they also want to associate a story with them and in the best-case scenario be able to tell this story. This is what usually happens on social networks these days. If a customer tells others about the positive shopping experience they had in your shop, this has an extremely good advertising effect for you.

The location itself can also play a part and increase the target group’s interest, attracting potential new customers. Locations such as warehouses, courtyards, or other unusual retail space can be an incentive to visit a shop. The unusual business premises, in particular, have given many pop-up shops additional charm and familiarity.

The success rating of a pop-up shop depends largely on why you decided to open it in the first place. The store’s purpose could be to increase sales and to increase brand awareness. If a company is primarily interested in the latter, a pop-up shop could be seen as a success even if there are low sales figures. Many pop-up shops have been able to increase the popularity of brands despite low sales figures. And larger companies in particular are often not dependent on the turnover and profit of a single shop, while higher brand awareness is much more valuable to them. In addition, they often use pop-up shops to test certain concepts on a small scale.

The e-commerce marketplace, Amazon, has also used the pop-up concept. Especially in the run-up to Christmas, a pop-up shop is a good opportunity to launch new products on the market and therefore boost sales.

According to the British Retail Consortium, almost one in eight shops in the UK are vacant. Pop-up shops benefit from these empty spaces, and in return they bring back life to the high streets as well as generate money for the landlords that own these spaces.

London also now has its own pop-up shop. The fashion shop on Baker Street enables customers to try on and see what suits them before they buy. It will be open for a week and will also host different events such as denim customisation and beauty trend discussions. Those that want to purchase an item of clothing can do so the traditional way at the till, via tablets provided in-store, or they can scan the product with the Amazon app.

Please note the legal disclaimer relating to this article.