Shop before it goes pop
Pop-up stores create intrigue for The Latest Scoop
A non-descript flight of stairs on Vancouver’s West 4th Avenue leads to the space Deb Nichol is transforming from a cinder block warehouse into a retail spectacle.
Ms. Nichol’s company, The Latest Scoop, opens retail outlets for just five months a year. It operates furniture and clothing stores that appear in different locations for short periods of time. Using what Ms. Nichol calls “planned spontaneity,” the stores become events in themselves.
“I’ve had $5-million display suites, and old warehouses where there are holes in the wall,” says Ms. Nichol, whose stores pop up in different locations. “I’ve worked really hard to get that intrigue,” she says. “They ask, ‘What’s she carrying now?,’ and ‘Where is she now?’ “
Ms. Nichol is part of a broader movement across North America that began in the early 2000s. Popup retail outlets use temporary locations, selling products for as long as it lasts, before shutting down, and often opening up somewhere else.
And it isn’t just independents pushing pop-up retail. Target Corp. has hosted more than 20 pop-up stores since it piloted the concept in 2002. Most recently, it used a popup event in Toronto in February to showcase New York designer Jason Wu.
“It’s a buzz marketing tool,” says Joshua Thomas, a spokesman at Target, which is planning to roll out 150 stores north of the border by next year. “We execute it to get noticed.”
As a beachhead for Target’s Canadian launch, it was a good way to seed nontraditional marketing channels. “Increasingly, we’re relying on earned and social media efforts. Traditional advertising isn’t always necessary,” Mr. Thomas says.
Social media and buzz is what Ms. Nichol capitalizes on. Word of mouth drives business to her store. She advertises using only her mailing list, and then waits as customers begin texting and contacting their friends about her latest pop-up outlet — often from within the store.
Ms. Nichol has been in retail since she ran a store on Vancouver’s trendy Robson Street in the 1980s. Her motivations are different than those of such retailers as Target.
“Most people open up with the intention of test marketing an area for a full-time store and expanding their database,” she says. “But I open up to catch the happy months.”
The “happy months” are when customer volumes are up and retailers can make money, rather than fighting to break even. For Ms. Nichol’s fashions and furnishings business, those months are April to July and November to December. The rest of the time, she closes down and avoids paying rental or staff costs.
But this selective marketing makes for a work-intensive spring. Other retailers may carry the same product lines for months at a time, ordering far ahead. Conversely, Ms. Nichol’s lead times are figured in weeks rather than months. During her open season, she visits Los Angeles weekly to pick up new products, and brings back as much as she can physically haul, shipping the rest.
She will often circumvent distributors, dealing directly with importers. She sweetens the deal by taking prearranged volumes of product at regular periods during a set timeframe. This enables her to offer items at lower prices than department store chains.
Not everyone is in the pop-up business to make money. Robin Kort, founder of Vancouver-based catering firm Swallow Tail, regularly hosts temporary restaurant events in exciting locations around town.
Losing money (or barely breaking even) has been a given for the Swallow Tail Supper Club, Ms. Kort says. Advertised via her mailing list and social media, she regularly attracts paying guests to exotic locations such as lakeside homes nestled in the forest, where she recently hosted an Alice in Wonderland-themed event.
Temporary restaurants are even more work-intensive than temporary retail stores says Ms. Kort, who must deal with chefs cooking from momentary menus in unfamiliar temporary kitchens.
Work-intensive events aren’t the only challenge for pop-up businesspeople. “It can be difficult to start up because developers don’t want to deal with you,” Ms. Nichol says. Retailers just starting out with no track record can find it difficult to persuade a developer to give them a short-term lease.
But developers also stand to benefit. Pop-up stores can drive huge foot traffic through a spot, and can provide much needed revenue for developers in between long-term tenants. The amount of commercial space leased in the greater Toronto area fell 6% in the first quarter of 2012, compared to a year earlier. Perhaps a little pop-up retail is just what developers need.
And the returns on Ms. Kort’s loss-making ventures are invaluable: “This year I doubled the catering business by increasing visibility to the public through the pop-up restaurants,” she says. It stimulates word of mouth, and also attracted the Food Network’s Bob Blumer, who ran a show about the Supper Club.
That’s the kind of pop-up publicity money can’t buy.