Posted on 06/18/2015

By Chanille Dunbar, Senior Product Manager

Flash retailing has been around since Vacant popped up its first shop in Los Angeles in 1999. For one month only, the shop opens up in major cities around the world to sell limited-edition products from known brands and rising designers.

Since then, other brands have hopped onto the flash retail train (or, more likely, a traveling bus). They take form in mobile trucks, kiosks and temporary residency in vacant brick and mortar spaces. From tech gadgets to designer sunglasses to homemade crafts, an array of businesses have opened pop-up shops for assorted reasons.

Why Pop-Up Shops?

The primary purpose of a pop-up shop is more marketing-driven as opposed to sales. A pop-up store is defined by a finite amount of time, from four days to three months. There are several reasons why a business might consider a pop-up shop:

Test the market for a new business
Have a business idea, but don’t know how it will be received? A pop-up shop could be a great way to test your product or concept without having to lock in a lease. In our headquarters’ city, Austin, stores often get their start and garner brand attention through First Thursday, a monthly block party on our tourist-attracting retail strip of South Congress Avenue. Budding brands might also choose to connect with other established, non-competing businesses to rent out a portion of their shop. For example, Co-Star has designated space to serve as a partnership opportunity and momentary home for new brands, which can take advantage of the consignment store’s prime location and existing patronage.

Contributing to a cause
Because pop-up shops are rarely for the purpose of driving immediate and large amounts of sales revenue, some retailers are leveraging them for the betterment of society. Consider H&M’s beach container store and their contributions to WaterAid.

Launch a new product
Pop-up shops are not just for new brands. Designer names also utilize this market strategy to build excitement and raise awareness of a new product launch. Nike launched their SNKRS app this February with a pop-up shop parked in the heart of All-Star week in New York City. Other companies like Hewlett-Packard, Luis Vuitton and Warby Parker have also culled brand buzz with similar campaigns, on the streets and inside malls. You may have heard about the Lilly Pulitzer pop-up at Target selling out in record time. Some consider it a sales failure but, considering the market-driven purpose of pop-ups, others argue it was an attention-grabbing success.

Re-engage an audience
For years, Disney brought their animated classics “out of the vault” for a limited time before pulling them off the shelves again. These limited-time releases is a tactical move to create a sense of urgency and newness around their movies that have been around for generations. Likewise, brands that want to stay relevant can do so by hosting flash sales and a unique shopping experience through pop-up shops that appear in neighborhoods one day and are gone the next. E-commerce companies like Amazon and eBay pop up around towns, often around the holiday season, to remind consumers of their offerings and give them a space to test out their gadgets.

Lease Administration for Pop-Ups

As opposed to long-term shops, pop-up locations are not in a lease. Instead, locations normally include a security deposit, have an agreement with the mall or shopping center for the space (as opposed to a lease), and are normally in a common area where they cannot make big or permanent changes. Booths and spaces can be as inexpensive as $50 a day. A pop-up shop may be favorable to a traditional kiosk because it allows retailers to test their brand in an environment before committing to a long-term lease.

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