Banking on Instagrammable moments and first-party data, digitally native companies are testing pop-up stores from New York to Los Angeles in the hope of growing their brands and converting their online success into real-life traffic.
“A lot of rationale about launching these physical spaces is not just about selling stuff,” explained Abbey Klaassen, president of 360i’s New York office. “They’re actually about communicating elements of your brand and a richer, deeper understanding of what this brand is about through a physical, tangible environment.”
The pop-up shop is helping to drive online retail’s reinvention, allowing ecommerce companies to continue growing after hitting a threshold online. Marketers can grow their brand loyalty, test new products, give consumers an experience—all while potentially producing stand-alone spaces that are profitable, increasing web traffic or providing rich, first-party data about customers.
“The era of having 400 stores across America is over,” said Adam Bent, co-founder and COO of thisopenspace, a platform that helps brands find physical locations. “[Instead], we’ll continue to see brands move into a space for two to three days or three years.”
Bent noted that brokers are now “recognizing” lease structures that don’t require companies to sign a five- or 10-year commitment, which brands no longer need. Using data they’ve acquired from online sales, brands can see which regions their consumers come from, and decide to open a pop-up or store in that market, said Nate Stewart, director of strategic product initiatives at BigCommerce, an ecommerce platform.
But, while data informs a brand’s store strategy, social media only partially explains a company’s customer experience component. Pop-ups and stores let these once digitally native companies form touch and feel experiences that can drive more brand loyalty, said Steve White, vp, commerce strategy at SapientRazorfish.
“We live in an omnichannel world,” White said. “If you’re looking to invest or grow your clients, you have to seriously consider some sort of physical manifestation.”
For ecommerce companies, that might mean recreating Arizona’s Antelope Canyon for consumers to Instagram like Glossier did in its latest store in Los Angeles. Or, letting customers hold and taste products as Brandless did at its two-week pop-up site, also in L.A.
“Pop-up shops and events provide an opportunity to rethink what the ‘real’ means in ‘retail’ in terms of IRL experiences,” said Tina Sharkey, co-founder and CEO of Brandless, a household and grocery goods company. “What this means for each company may be different; for some it may be seasonal, for some it may focus on how to use products.”
Those experiences give companies an edge over others, said Bruce Winder, a retail analyst with Retail Advisors Network. The encounters let brands have both a selective showroom and receive rich feedback from consumers that’s harder to get online.
Allbirds’ permanent location in San Francisco (underneath its office) is undergoing renovations, so it’s hosting a pop-up nearby. The feedback it has generated has led the company to “double down on retail,” said Tim Brown, co-founder and co-CEO of Allbirds, including opening a store in New York last year.
“The retail store that was under our office was not something we planned, but it was a happy accident and it’s really informed our vision of expanded retail in states,” Brown said.
Klaassen thinks more of these pop-ups from digitally native brands will continue to open, and that established retailers will experiment as well.
“[Pop-ups] now mean something that is either ephemeral and doesn’t last a long time or something that is almost more of an experiential marketing initiative,” Klaassen said.
The latest pop-up shop from Away isn’t really accessible unless you’re passing through Chicago’s O’Hare Airport later this summer. The company also has four stand-alone stores, each of which is profitable. Away is planning to have 10 stores by the end of 2018.