Pop up shops rise to the challenge

Pop ups are now a mainstay of retail life, said the Financial Times this week. They asked our CEO Nick Russell to estimate the number of pop up shops in London. Read his reply and the FT’s take on the rise of the pop ups…

Pop up stores rise to challenge of reviving retail, says Financial Times
Pop up stores rise to challenge of reviving retail, says Financial Times

The Shop is dead. Long live the shop.

Pop-Down Square Cinema Area, Mike Lim, Shoichi Sado, Olivia Wright and Isobel Davies @PopDownSquare

Good article in The Times this weekend by Matthew-Paris about the future of shopping.

The internet changes how we buy and think, but old memes and behaviours take time to change:

“Thus we suppose that shopping and walking are somehow connected, and Americans suppose that shopping and driving are somehow connected. And everyone thinks a shop is a place — a place in a place; a place you go to and, being a place in a place you go to, will thus be either a specialist shop in a mixed cluster, or a “supermarket” or “department store” with the cluster under one roof. The news that these places can now be virtual, accessed on your screen, hardly needs to be laboured. “

As the role of the shop – a place in a place – changes, so no doubt will the way we search, select and transact real spaces. Does it alter the value of space? Does it change the ability or desire to ‘sell’ in real spaces? Whilst an increasing number of our transactions become virtual, our desire to meet and experience the real world, real things, real people, real products seems more permanent than the ‘form’ this engagement might take.

Thats where WeArePopUp.com can help. By enabling people to say what they mean by a shop – by allowing people to propose what a ‘shop’ should be – for what use, over what time at what price, with what activity with which collaborators.

“But still that hand from the past grips us… [finally] online shops (though not online shopping) will prove — like the out-of-town shopping centres that the internet killed, like the traditional high streets that the shopping centres killed, and like the street vendors and markets that the high streets killed — merely transitional.”

Offline shops are changing but activity, offline shopping, will transition to new forms – the shop is dead, long live the shop.

Welcome To The Future Of Retail – Part 3

In previous posts we have highlighted some of the recent changes to bricks-and-mortar landscape: increasing vacancy rates, reduced consumer spending and lower footfall.These trends are contributing to the rise of short-term “pop-up” retail both in the UK and internationally. However, We Are Pop Up also think this is the beginning of a structural change in the way we use space, rather than just an economic cycle which will fade in time.

Some of the social and technological forces that are changing consumer activity will have profound consequences for both shop space and brands, and offer a great opportunity for those that can capture the imagination of a new audience. For facts and figures about the Rise Of The Mobile Audience, see our overview here.

MAKING YOUR STORE YOUR STAGE


There are an increasing number of retailers seeking to enhance engagement, from Levi’s Craft Of Music campaign, to Westfield’s Future Fashion events, exciting fashion start-ups like TheEdit @wearetheco and the Vogue-sponsored Fashion Night Out across London’s West End. Even pure-play online retailers like Capital One or eBay are increasingly experimenting with physical spaces and pop-ups to build engagement.

It may seem obvious, but physical engagement with a brand or community or product is the core advantage that a ‘shop’ – or increasingly ‘pop-up’ – enjoys over an online experience.  Mobile computing is an agent in this physical to digital (or vise versa) journey.

The number of ways in which we can participate in a shopping experience is multiplying. We can share our experiences with our social media audience and are provided with digitally enhanced forms of service in-store. Just see how John Lewis bridges this gap with digital kiosks and incentives that cross platforms. For a new generation of retail, these steps are the key to engagement and profitable loyalty.

image

Hot Tub Cinema – a traveling theater and hot tub experience in London.

How To Engage In The Digital Age

It is estimated that the Vogue Fashion Night Out, for instance, increased footfall across Bond Street by a remarkable 92% – and a recent conversation with Caireen Wackett at Yellow Door reminded me what Mary Portas said back in September 2011:

“The only way for bricks and mortar retailers to compete with online is brilliant real life shopping experiences. Retail is no longer about number of units on the shop floor – it’s about offering a playground for your customers. Throwing big exciting events is one way to draw a crowd – but I believe the High Street should invest in better experiences for their customers every day.”

Big exciting events – the “theatre” of the retail world – don’t scale particularly well on the marketing and PR budget line. But mobile is a channel that can deliver personalized and exciting engagement everyday (remembering the late Steve Jobs’ caveat to “start with the experience, then work back to the technology”). A solution that can combine someone’s recent search history and preferences, the time of day, a particular location or even the last thing they bought, opens up the potential for far more nuanced and meaningful business-to-consumer journeys.

This more nuanced engagement delivers a more ‘authentic’ experience that all parts of the retail spectrum are currently seeking; from a start-up’s first steps into retail – like those working with Pop Up Britain – or an online retailer taking seasonal space, and even fully fledged independents and brands. A new generation of retailers is thinking not only about what they can provide to augment our lives, but also what kind of self-contained experience might captivate us most meaningfully. This indicates an exciting move away from old advertising models that told us what we wanted, and instead is built around what we actually do and care about.

Deloit predicts that over the long-term we will see a significant downsizing of store portfolios:
“This will vary markedly depending on the retailer’s category but reductions by as much as 30-40% are foreseeable over the next 3-5 years.” However some retailers, notably Apple and Nike, have led the way by showing that brand only stores can deliver great customer experience and provide a physical corner-stone to their consumer engagement. As vacant retail space grows more and more flexible, it is only a matter of time before the capacity and liquidity problems in the market are resolved. We can imagine a platform where all retailers have the opportunity to create active digital communities around the physical in-store experience, however short-term or permanent their presence.

This is where We Are Pop Up can play a vital role – enabling great physical experiences, reducing transaction costs and making the process of having a shop as easy as paying for a product online using PayPal.

image

Kellogg’s Ran A ‘Pay With A Tweet’ Campaign at a Soho, London shop in 2013

The CBRE (the world’s largest commercial real estate firm) observed that in the 1970’s, a retailer needed approximately 200 stores to access 50% of the UK’s population. Today it only needs 90 – sometimes less (assuming, of course, they are optimally located). Let us stretch the theatre analogy further to that of a traveling troupe – how many stores are required globally, over what locations and which time periods, to make sure a significant percentage of the world’s population enjoys your show?

I was recently asked to attended a meeting of the Small Business Statistics group at No. 10, hosted and chaired by Lord Young. The group was discussing the fragmentation of parts of the economy as an increasing amount of trade is transacted by e-commerce platforms like Ebay – and what challenges that this poses for measuring activity and productivity – in the first recession in living memory where unemployment has gone down! The conversations in the room were enthusiastic, and focused on new ways to transact and how to make the most of current market shifts.

Capturing mobile audiences represents an unparalleled opportunity for brick-and-mortar retailers. From start-ups to independents to brands – those that embrace mobile platforms in an intelligent and timely manner have the chance to create and sustain real competitive advantage.

Perhaps with the rise of the mobile audience are we about to see the rise of mobile retail itself.


Further Reading

The Changing Face of Retail – Deloit

M-shopping: Final nail or final hope for the High Street? – Sponge

Other parts of our Future Of Retail installments


This post kicks off a weekly series where each of We Are Pop Up’s team members will take a turn applying their expertise to the concept of pop-up. This week features Alastair Moore – COO and Co-Founder of We Are Pop Up. You can ask him questions on Twitter @latticecut.

Welcome To The Future of Retail – Part Two

Examples of pop-up retail in the UK

1) Test marketing in Covent Garden, one of the UK’s most popular shopping destinations:

• Chanel: Launched a six-month boutique at the start of London 2012.

• Tom’s Shoes: US brand tests UK shop in Seven Dials.

• Private White VC: Manchester men’s brand opens second retail store.

2) Protecting/revitalising historic property:

• The Gin Garden showcases The National Trust’s Fenton House in Hampstead.

• The Midnight Apothecary highlights the Brunel Museum’s campaign to turn a historic vault from London’s Thames Tunnel into a concert hall.

3) Community economic development and social sustainability:

• StartUp Britain’s PopUp Britain is a scalable template for enabling local entrepreneurs.

4) Brick-and-mortar brand building:

• Independent watch company Uniform Wares moves from a featured spot at the Dezeen Watchstore shop to Uniform Wares brand shop for the London Design Festival.

• Corrections rehabilitation charity Fine Cell Work’s shop in Mayfair brings puts skilled-labour products into shopper’s hands.

 

Worldwide examples of pop-up retail

5) Marketing campaigns to deliver real-world, immersive consumer experiences:

• Bob Dylan ‘Tempest’ stores (London, Berlin, NYC, LA)

• Michael Chambon’s ‘Telegraph Avenue’ record shop (Oakland,   California)

• Mumford and Sons’ General Store (Sydney)

6) Small and large business alike achieve new levels of community and customer engagement:

• Odd Future x Colette (Paris)

• The Junkyard (Beirut)

• Puma Yard (London)

• Pernia’s Pop-Up Shop (Delhi)

7) In NYC, several campaigns are using pop-up shop concepts for social service delivery:

• Barbershop x Health centre in Harlem

• School registration centres

8) Pop-up hotels, “the most extreme example of the pop-up phenomenon” (Travel and Leisure), testing the boundaries of unique consumer experiences.

 AirBNB’s designer ‘Picks’

• Design Hotels Project: San Giorgio, Mykonos

• Nikki Beach and Target boutique hotels at the Toronto International Film Festival

Growing awareness of pop-up retail

Pop-up retail is receiving increasing amounts of press coverage as it moves into industry and mainstream consumer consciousness. Whilst major cities lead the way – like Berlin, London, New York, Paris, San Francisco – there’s activity from Ayers Rock, Australia to Zurich, Switzerland. Further, there is heavy interest from the travel industry as pop-up destinations are often hyperlocal experience.

• Rise of the Pop-Up Shop – Travel and Leisure (October 2012)

• Pop-up Shops Go MainstreamWall Street Journal  (September 2012)

• New York’s 8 Best Food Trucks – Zagat (August 2012)

• World’s Best Pop Up Restaurants – American Express: Departures (July/August 2012)

• 10 of the best London pop-upsBritish Airways High Life (July 2012)

What’s Next?

We Are Pop Up has sparked interest from a variety of sources: from independent proprietors to multinational brands, and from local councils to NGOs and national government. The question is no longer if pop-up retail will emerge as a significant force, but when it will reshape the global retail industry.

Based on both the drivers mentioned in State of UK Retail, as well as the growing body of Examples, pop-up retail is gathering steam. Current property models are broken and fail to sufficiently address the needs of the short-term retail category. The future will be very interesting.

 

“All journeys begin from identifying opportunities”

Read other parts of this series.

Welcome To The Future Of Retail – Part One

The State of UK Retail

We have been reading a lot of stories about the current face of the UK retail market. Amidst speculation and concerns about the changing character of post-recession high streets, data published recently has helped disambiguate the situation. Last week, The Local Data Company’s report “Too Many Shops” identified the following shifts in the UK retail sector:

• A decade of lost growth as consumer spending is back to 2002 levels.

• 13% of retail transactions in the UK occur online.  By the late 2010s, 50% of  transactions are expected to occur on mobile devices and VISA’s online platform.

• High Street footfall is down 5% nationally.

Clearly consumer spending is down and already moving from offline to online spending. In the long-term, the proliferation and popularity of mobile devices brings with it the desire to transact in every way possible on the platform. In the short-term, brick-and-mortar retailers have been put under  pressure from online purchasing. Without any model currently in place to mitigate this shift, the type of spending correlates directly to where it is spent. For the moment, online sales does mean sales made outside of physical shop space.

• 1,500 shops per year closed between 2000 – 2009.

• 5,000 shops closed each year in 2010 and 20011.

• 1 in 7 UK shops has fallen vacant.

This sharp rise in shop closures is most commonly attributed to both decreased footfall (and related spending), and consumer consolidation (as more people go to fewer shops). Traditional department stores are being overlooked in favor of independent intermediaries and innovative brand stores. Primary examples like the Apple Store and Niketown have found renewed success through well-crafted  and heavily designed shops. We see the most success in retail shops that are highly engineered  and driven by experiential retail concepts.

• 52% of retail leases expire between now and 2015.

• 6.6 million square feet of new space has been added from 2005 – 2012.

• There are currently 50,000 vacant shops in the UK.

As more space opens up on the property market, consumer patterns change. But shops have trouble changing with them. Long-term leases mean that most shops cannot flex to match the flux. With so little room for competition, pricing adaptation, and innovative strategy, we can expect that retailer mobility will also be on the rise. With half of long-term leases expiring soon there is a good chance that the markets going to be on the move. (Additional information on UK and European retail shifts are available from Matthew Hopkinson’s presentation Multichannel Stat Attack from the Mobile Retail Summit 2012).

Pop-up shops are part of the solution”, said Simon Danczuk MP.

New consumer expectations are driving the rise of short-term “pop-up” retail in the UK and internationally. Made clear by high-fashion and Big Brand shops, consumers desire to associate themselves with products and brands in a more meaningful and creative way. The “pop-up” model facilitates innovative, specialized and (most of all) personalized shopping experiences for a new generation of shoppers.

For retailers, running a pop-up de-risks many common brick-and-mortar challenges. Without the pressure of a long-term lease and deep financial investment, they can offer a wider variety of stock, test prices and iterate designs faster.  (Another way to say it is that short-term engagements allow the market to correctly price retail property, but that is a conversation for another time.