Spring 2012

Pop-ups: A New Domain for Online Retailers

by Beth Mattson-Teig

Cyber retailers test the waters of brick-and-mortar retail through pop-up stores.

Online retailers ranging from small independents to giants such as eBay and Google are testing a new domain—the bricks and mortar of pop-up stores.

These online retailers are turning to temporary stores to drive customer traffic to their websites, boost sales and promote brand and product awareness. “The pop-ups become almost a catalog showroom for some online retailers,” says Andy Bailen, managing director at 3Pe Consulting LLC, a retail-consulting firm based in Denville, NJ. Other online retailers look at pop-ups as an added strategy to increase cash-and-carry sales, particularly during the busy holiday shopping season.

For example, eBay launched “Christmas Boutique” pop-up stores during the last holiday season in major cities such as New York, San Francisco and London. The London store, which was located in the busy West End shopping area, was open just five days from December 1-5. Although the store included a sample of merchandise with about 350 different items, the main objective was to drive traffic to the website during the busy holiday season. Customers could scan a barcode and buy products using their smart phones, or visit the website for more shopping choices. “They had a little bit of merchandise as part of their promotion, but the goal was to lead people to the eBay site and have the purchases made through the site,” adds Bailen. The store counted 2,500 walk-in customers and eBay’s Facebook fan count jumped by 25,000 after the five days.

Testing the waters

Online retailer Glennz Tees launched its first pop-up store in March 2011 at South by Southwest, a 10-day music, film, and interactive conference and festival held in Austin, Texas. “We wanted to get our shirts out there to market and build awareness and also to see how sales performed outside of the website in a bricks-and-mortar location,” says Walter Stokes, general partner for Austin-based Glennz Tees. The online retailer sells custom designed T-shirts created by New Zealand illustrator Glenn Jones.

In particular, Glennz Tees was targeting the convention center portion of the event, which draws thousands of new media professionals such as bloggers and other social media gurus to the Austin Convention Center. Glennz Tees has found that its custom-designed T-shirts resonate with that core demographic. “We wanted to take advantage of all these folks coming to town,” says Stokes. The interactive tech festival typically draws more than 14,000 registered attendees.

The Glennz Tees pop-up ran from March 10-20—the day before the festival to the day after the festival. The store was a huge success with sales during the 10 days equaling the volume of shirts that Glennz Tees typically sells online in one month. The phenomenal exposure to the stream of traffic going in and out of the convention center was an added bonus. “Just from a marketing perspective, we were really pleased with the opportunity,” Stokes says.

Location matters

Executing a successful pop-up store can be a steep learning curve for online retailers. Glennz Tees quickly realized the value of following the old adage—location, location, location. The retailer was able to secure a prime spot in a vacant storefront that was about 150 feet from the front doors of the convention center.

Choosing the right location is vital to any pop-up store, but prime spots are particularly desirable for online retailers looking to get the most bang for their buck. “These pop-ups are targeting very high-profile, high-traffic locations in shopping malls or urban street locations that get a ton of traffic,” says Bailen. One of the advantages of the high-traffic location is that there is a steady flow of people that helps to drive awareness, he adds.

Online retailers also need to be adept at getting up-and running quickly without spending a lot of capital on costly improvements to the space. Glennz Tees signed a 30-day lease commitment for a 2,500-sq.-ft. street-level storefront just a few weeks prior to its opening date. Conscious of costs, Stokes outfitted the space with used fixtures and shelves purchased from IKEA. He relied heavily on the merchandise to create colorful and creative T-shirt displays throughout the store.

The company was able to pull inventory directly from its Austin warehouse to stock the pop-up, and hired friends and existing customer service and warehouse workers who were already familiar with the brand to help staff the store. They brought in 45 different designs with about 10 different SKUs per design ranging from baby onesies to men’s XXL.

The online retailer learned that the buying patterns in the bricks-and-mortar location were different than the online medium. Overall, Glennz Tees sold a higher percentage of kids’ shirts and baby clothes through the pop-up than the retailer typically sells online. “I think our online customers are buying because the brand really resonates. But with the pop-up shop, people were doing more souvenir shopping,” notes Stokes.

Glennz Tees would consider doing the pop-up again if they can find the right location. “Bricks-and-mortar retail could be really interesting for us, but we want to be very deliberate about it,” says Stokes.