Innovative brand policy: Success factor pop-up store – Part 1

Pop-up store: This innovative business model is the latest trend in ‘world of experience’ marketing. The temporary shop units, which put brands firmly in the spotlight, test out new articles with a combination of exclusive products and limited opening times, stimulate sales and create exciting brand experiences. Additionally, they offer retailers the opportunity of attracting the attention of their desired target group both affordably and in a highly frequented manner.

According to a market analysis by the EHI trade research institute in Cologne, one in two of the 1,000 largest online shops in Germany now operate offline businesses also.

The cost per square meter in German retail is rising virtually unbridled in the inner cities, and doing so in the face of tumbling sales figures. Small and young companies in particular see themselves exposed to ever more aggressive price wars and increasing predatory competition. In view of this, entry to the marketplace is possible only with difficulty, so that new concepts, like that of pop-up shops, tend to bubble up. These help not only in lifting off from the competition, but also in attracting the attention of ‘lead users’ and ‘influencers’. Although the pop-up store has experienced a delayed arrival in Germany, it has now since developed into a highly popular marketing channel.

“[…] pop up stores give consumers the opportunity to learn about and purchase new products while providing the marketer real-world insight into consumer attitudes and behaviours at the point of purchase” (Market Wire, 2005).

Pop-up stores do not fit the typical image of retail and are captivating precisely because of this

The main task of pop-up stores lies in making brands perceptible to consumers. Products are presented within an intimate world of experience, so that an emotional dialogue between brand and consumer becomes possible. Above all, “the experience that the customer can have in the purchase, use or ownership of a product shifts to the forefront of brand identity”. (Pine und Gilmore, 2000, “The Experience Economy: Work Is Theater & Every Business a Stage”, p.36).

Products placed innovatively in the limelight

The stores communicate carefully planned with their target group, usually over social networks like Facebook or Instagram. The company thus employs viral communications mechanisms and delivers its content directly to its followers by informing of store parties, sales campaigns or daily news.
A limited access to information over select channels underlines both the uniqueness of the concept and the exclusiveness of the store. This sets the company apart from its competitors and presents itself as a special feature for its customers.

Through its detachment from the mainstream, the pop-up store satisfies an emotional need for individuality. This sensation of social exclusivity then lodges itself in the memory of the consumer. The company thus stays remembered and the consumer builds up a relationship with the brand, meaning stimulated, at best, towards further purchases.

The luxury shoe brand “The Generic Man” opened for a duration of four weeks a Pop-up Store at Urban Outfitters Los Angeles, USA.

The luxury shoe brand “The Generic Man” opened for a duration of four weeks a pop-up Store at Urban Outfitters Los Angeles, USA.

Pop-up store as brand experience

As an unconventional marketing tool, the pop-up store is aimed particularly so that the brand becomes authentically perceptible. The consumer enters into a direct interaction with the company and experiences their shopping as an event. This shop concept is targeted especially at young, urban and trend-conscious individuals. For this reason entirely, the store often “pops up” at fashionable sites. It is thus bound together with its location and is conceived upon the attitude to life within that local scene.

The design of the store, in turn, is shaped by the identity of the brand (cp. Kastner 2014, “Success Factors of Pop-Up Stores”, p.9). Additionally, the store is often characterised by a modern yet simple shop design, low rent and operating costs, as well as by a low investment sum.

Pop-up store: Opportunities and risks

Decisive factors that contribute to the success of a pop-up store are brand and customer loyalty objectives, oriented over the longer term. Brands can be made known swiftly over the Internet and its social networks. But only upon personal customer contact will the loyalty of the consumer to the brand be bolstered. Above all, low advertising costs, exciting locations and interesting target groups, an elevated credibility from word-of-mouth recommendation, but also a direct contact to manufacturers and customers illustrates the pop-up store as an attractive marketing instrument. Pop-up stores offer a good opportunity for online retailers especially to test new brands as well as markets. Simultaneously, the value of the brand can also be increased. For PR purposes, it is also helpful to attract towards you the interest of local media and influencers.

OpportunitiesRisks
Low running costs Possible inflation
Exciting locations Optimal opening period unknown
Exclusivity factor Uncertainty about needed or desired transparency regarding time limitations
Comparatively low advertising costs Degree between publicity and secrecy difficult to estimate
High credibility of word-of-mouth recommendation (from lead users and influencers) Lacking control of word-of-mouth recommendation
Differentiated target groups
Direct contact to manufacturers and customers
Test run of new products possible

Pop-Up Stores: Opportunities and risks  (Source: Self presentation in the style of transfer – Werbeforschung und Praxis)

In the second part of our article “Innovative brand policy: Success factor pop-up store”, we will be closer examining selected success factors of pop-up stores and  explaining the advantages of innovative store concepts to eCommerce retailers.

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