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08/27/2021

How Pop-Up Retail Stores Fit into the World of Uncertainty

As retail continues to dig itself out of the hole of 2020, when the COVID-19 pandemic decimated foot traffic and sales for many categories, pop-up shops are continuing to gain momentum.
Melissa Gonzalez presentation

In uncertain times, retail stores that are agile and adaptable will gain the most traction. Pop-up retail experiences can fill a number of brand needs and boost consumer engagement without needing to place significant investment into brick-and-mortar. And pop-ups may be just what some brands need to bring consumers back from the depths of retail’s low points during the COVID-19 pandemic.

That’s according to Melissa Gonzalez, principal of MG2 and CEO of The Lionesque Group, who recently spoke about pop-ups at retailX 2021 in Chicago.

“Pop-ups are not going away,” Gonzalez said. “The store has a modified role, and agility is critical.”

Not only are pop-ups a fresh way for brands to re-emerge from the pandemic and engage with consumers, they also present a number of opportunities for brands to launch new products or services, as well as test new partnerships. 

The Case for Pop-Ups

 

One of the most successful pop-ups is based around seasonality. Halloween pop-up stores set up shop for just a few months at the tail end of summer to sell customers decor and more for Halloween, and then the retailers pack up and vacate their spaces until next year. The model has worked well for these types of stores, and other merchants have similarly leveraged seasonality for pop-up shops.

Dormify, which sells bedding, furniture and decor for dorm rooms and apartments, is another example and a brand that Gonzalez has worked with for pop-up spaces. The company relies on the back-to-school shopping season before kids head off to college. 

“The key time for [Dormify] is when students graduate high school and are entering college,” Gonzalez said. “Those summer months are critical.”

And the brand doesn’t just set up shops. Dormify also offers customers the opportunity to sit down with a dorm stylist to help find their signature style. In Chicago and Washington, D.C., where Dormify had stores last year, sales rose more than 200% in those areas, according to Gonzalez.

Combining Physical Space with Tech

 

Adding new features and unexpected elements to pop-up shops can make them more successful and become a unique driver for a brand. Pop-ups are also opportunities for brands to combine their technology capabilities with physical spaces. For example, brands can launch a new website alongside a pop-up setup or a pop-up could provide brand amplification for a new product launch online.

In the beauty industry, Sally Hansen successfully used a pop-up to launch its AR app that finds personalized nail colors based on skin pigmentation. 

“Sally Hansen came out with an augmented reality app to scan the pigmentation color of your skin,” Gonzalez said. “It would virtually paint your nails based on pigmentation of skin and recommend a color. [We came up with] a personalized nail salon for you. [In the pop-up], you came in and went to a vending machine and could pick the recommended color or pick something else. You could then go get a complimentary manicure.”

The vending machine, personalization and other features of the pop-up helped Sally Hansen see 50,000 downloads for its app in the first month. More than 2,500 people came through the pop-up store, Gonzalez noted. 

Similarly, luxury brand Burberry launched AR capabilities through Google Search and used an immersive store experience to engage customers with the app. Users in the store can use the app to hover over products and learn more. When not in the store, the app can also create the store experience at home using AR. 

Testing Partnerships and Space

 

As retailers look for ways to survive and thrive in brick-and-mortar after the pitfalls during 2020, brands are no longer looking at each other as adversaries. Instead, retailers are looking at other retailers as potential partners––and using pop-ups to test partnerships. Pop-ups are also opportunities to test spaces for more permanent stores in the future.

“We’re thinking of partnerships as things that are unexpected in retail, and we’re seeing so much of that happen lately,” Gonzalez said. “It’s not about being competitive, but about how we are leveraging each other.”

Partnerships aren’t necessarily between retailers, however. Fitmatch, a 3D-AI apparel technology platform that matches shoppers with the items that fit, teamed up with Brookfield Properties in a pop-up experience, where shoppers could come into a store and take a body scan to create a 3D avatar of themselves, showing them how clothes would look. 

Brands have also used pop-ups to test store spaces before moving into permanent locations. The short timeline and innovations in the spaces enable brands to gather consumer data quickly, which can then be leveraged for strategic decisions down the line.