How Online Retailers Use ‘Pop-Ups’ in the Physical World

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    Chances are, when you think of pop-ups, you think of those online annoyances that you typically try to block. It turns out there are pop-ups in the physical world, too, but rather than being annoying, they’re kind of cool. I’m referring to temporary brick-and-mortar extensions of online retail outlets that, well, pop up in various locations to give those retailers a means of providing a touch-and-feel experience to customers.

    I recently had the opportunity to discuss this phenomenon with Melissa Gonzalez, founder and CEO of Lion’esque Group, a pop-up retail consulting firm in New York, and author of the book, “The Pop Up Paradigm: How Brands Build Human Connections in a Digital Age.” I opened the conversation by asking Gonzalez what determines whether a permanent location or a pop-up is the better way to go as a means of creating a truly distinctive brand for an online retailer. She said there are a lot of factors:

    First, it really depends on the reason as to why they want to do a pop-up—why they want to have a retail space. Sometimes they’re new, and they want to announce that they’ve launched a brand, but they’re not really at the stage where they have the infrastructure to run an online site plus a storefront. Online in itself is its own animal, and needs a full team, so they might want to do a pop-up just to bridge that touch-feel gap—to let people know that they’ve launched, let people touch and feel the brand, get to know the designer behind the brand, and then continue the conversation online. They also might not be sure where they want to be geographically, so a pop-up store is a great way to test that market before they sign a long-term lease. Sometimes they just need a short-term activation to educate customers—maybe they’re launching something new, or forming an exclusive partnership, and they just want to get marketing buzz around that. So it really depends on their goals.

    I noted that Amazon opened a brick-and-mortar store in Seattle in November, so I asked Gonzalez for her thoughts on the likely strategy there, and whether there are any takeaways that are relevant to a discussion of pop-up retail. She said it’s all about enhancing the customer experience:

    I think you’re seeing more and more that these successful online stores are opening brick-and-mortar, because consumers, as much as they’re digitally connected and living on their smartphones, all crave human interaction at some point. So more and more, you’re seeing a lot of these bigger brands doing it, where they can kind of showroom the brand—customers can come in, they can have experiential engagement, and they can still shop wherever they want. For a lot of these big guys, where the purchase happens doesn’t matter that much—it could be mobile, it could be online, it could be in-store. But it’s in-store where they can really create a customer experience. So Amazon is doing it, and Microsoft opened their store in Manhattan, and eBay is doing all these collaborations with brick-and-mortar stores. It’s furthering that human connection and the relationship with the brand—it’s another touch point in the whole equation.

    So if Jack Ma of Alibaba came to her and asked her for her advice on a U.S. retail strategy, and whether he should do a permanent brick-and-mortar location or a pop-up, what would her advice be? Gonzalez laughed, seeming to savor the very thought:

    I don’t think they’d have a problem having the infrastructure to be able to have a permanent store, but I would advise them to start with pop-ups. I’m sure they have plenty of data on where traffic comes from, but I would have them use pop-ups as a marketing strategy—go on a road show and test different major cities and the engagement they find in each, and use it not only as a marketing opportunity, but as a learning opportunity before planting a stake in the ground and signing a long-term lease anywhere.

    I asked Gonzalez how common is it for retailers to have pop-ups in multiple locations at the same time. She said that certainly happens:

    You definitely see it with the larger brands, because it takes a bit of a budget—you need teams in multiple places at the same time. It tends to be tied around something, like they’re launching something new, or it’s a holiday and they’re going to take over X amount of mall space for the holiday season. It’s a very well thought-out and coordinated effort—they have one singular message that they’re introducing across multiple cities at the same time. It can be as simple as a kiosk type of pop-up—you see a lot of fragrance brands do it across malls for the holidays; or it can be as extensive as really building out brick-and-mortar stores in multiple cities at the same time. Or you see some companies go on a tour—we just worked with a company from Dallas called Mizzen+Main that did a pop-op in New York City, then they traveled over to San Francisco; they did one in Dallas before that. They’re learning about their customers, and if they were to open a space, where it resonates the most. So it’s definitely happening, where they’re building, breaking down, and going to the next location, or they’re popping up in 10 or 15 locations all at the same time.

    As for what factors determine the length of time a pop-up should be in operation, Gonzalez said she always talks to her clients about their goals in order to determine that:

    If it’s strictly marketing-based and experiential, and nothing is being sold in the store, shorter is better. Those tend to be three to five days at the most—you kick it off with a VIP reception with media and influencers, and then word gets out in the first couple of days, and by day four or five you’ve covered your target market, and it’s time to close doors. If you’re really testing a retail location, and trying to collect data, I always recommend a month or more. Then you can really bring in technology to study traffic patterns and door count and dwell time, and tie it to your point-of-sale data, and study social media engagement to determine what products people are talking about the most. You really need a longer time to collect that data.

    I also spoke with Gonzalez about how ROI is calculated in the pop-up world, and about the biggest mistakes that pop-up retailers tend to make. I’ll cover those topics in a forthcoming post.

    A contributing writer on IT management and career topics with IT Business Edge since 2009, Don Tennant began his technology journalism career in 1990 in Hong Kong, where he served as editor of the Hong Kong edition of Computerworld. After returning to the U.S. in 2000, he became Editor in Chief of the U.S. edition of Computerworld, and later assumed the editorial directorship of Computerworld and InfoWorld. Don was presented with the 2007 Timothy White Award for Editorial Integrity by American Business Media, and he is a recipient of the Jesse H. Neal National Business Journalism Award for editorial excellence in news coverage. Follow him on Twitter @dontennant.

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