What is a Pop-Up Shop?

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Estimated reading time: 6 minutes

Have you ever visited your local shopping mall, strip mall, or outdoor farmer’s market and seen a storefront with a minimalist layout and design that seemingly appeared overnight and is filled with shoppers? We are referring to a pop-up shop, a temporary retail business that is usually set up in an outdoor or indoor space for a short period. The idea is to build excitement about the brand and drive customers to a website or an already established store. In addition, they are an excellent way for entrepreneurs to test their products and services before investing in a brick-and-mortar location.

Pop-up shops are becoming more popular than ever all over the United States. For example, some shops sell food and beverages, while others sell clothes, shoes, jewelry, or holiday-themed items and gifts. Pop-ups are great for generating buzz around a brand without having to launch an expensive marketing campaign. So, what is a pop-up shop, and do they work? This Balboa Capital blog post answers these questions and explains how they can benefit new and established brands.

What is the history of pop-up retail?

The idea of temporary retail space has been around for centuries. Merchants and caravans traveled to various locations to sell spices, antiques, carpets, cloth, yarn, and medicine. They would sell them to shoppers on the street and at outdoor markets and fairs. Most of the goods were handmade and imported from Europe. When the industrial revolution began in the late 18th century, many manufacturing companies relied on traveling merchants to sell their goods to customers. This helped create a demand for goods among people. In addition, it paved the way for manufacturing companies to establish sales channels and build brand awareness.

Fast-forward to 1922, when the nation’s first outdoor shopping mall opened in Kansas City. The Country Club Plaza featured buildings and towers inspired by Spanish architecture and open plazas adorned with beautiful tile and iron accents. When the Plaza opened, it only had a handful of shops. To attract more customers, the founder of the Plaza invited merchants to line the streets and sell their goods, attracting shoppers from all over the area.

In 1956, the nation’s first indoor shopping mall was built in Edina, Minnesota, and it was an instant hit with the community. Developers and retailers noticed, and shopping malls started popping up in cities and towns nationwide. Large department stores served as mall “anchors,” and small independent retailers and restaurants occupied the remaining space. Many malls also had booths and kiosks in areas with high foot traffic for merchants to sell their goods.

There were close to 4,500 shopping malls in the United States in the 1960s, and they were places to go for shopping, dining, and entertainment. Malls experienced brisk business until the 2000s when the Internet changed how people shop, and shopping habits began shifting away from malls and large department stores. Today, there are just over 1,000 malls, and many have plenty of space to fill. Forward-thinking mall landlords are looking to pop-up retailers to fill empty spaces and increase overall sales.

How do you open a pop-up shop?

You may be considering a pop-up shop if you want to try a retail presence for your startup but do not have the funds to lease a brick-and-mortar location. It is faster, easier, and more affordable than getting an actual storefront. Plus, pop-up shops can be opened almost anywhere and anytime, so you don’t need a lot of working capital to start one. All you need is an idea, some merchandise, and a space to put it in. There are many ways to open up a pop-up shop, but one of the most popular ways is to rent out space at an existing store or mall. Outdoor events such as fairs, concerts, galleries, amateur sporting events, and farmer’s markets are also viable options, providing they will likely attract the target audience for the products you sell.

Check online or contact your local Chamber of Commerce to see if there are any pop-up shop opportunities in your area. If you find one, you will need to get the complete list of requirements and read the fine print. For example, there may be guidelines pertaining to pop-up store dimensions, stock space, lighting, and signage, to name a few. And make sure that you fully understand the lease agreement and obtain the necessary licenses, permits, and insurance.

How much does a pop-up shop cost?

There is no “one-size-fits-all” price to open a pop-up shop; the costs range from $1,000 to $150,000 or more. First, the costs associated with opening a pop-up shop will be determined by many factors, such as the venue, size of your shop, and storefront location. A shop in a large, high-end shopping mall will typically cost more than a shop in a small, open-air market. Next, the type of shop will determine its price. For example, “shops within a shop” are located inside stores, which are relatively affordable. An example of this type of shop would be a local landscape photographer with a booth to sell prints inside a furniture and home décor store.

Perhaps the most expensive shop would be one custom-built from the ground up, with temporary walls and flooring that need to be assembled by a construction team. These are popular among large retail brands that want to test new product lines, offer special promotions, or act as content creation studios for customers to take smartphone pictures of products and share them on social networks such as Instagram.

Are pop-up stores worth it?

The success of your pop-up store will be based on your business goals and marketing strategy. Perhaps you want to establish your brand. Or, you already have a brand and want to test out a new market in an adjacent city. In addition to selling products, you might engage potential customers with product demonstrations and invite them to ask questions on the spot. No matter what your shop’s goals are, it is important to keep them focused on the needs and expectations of your customers. Test out new products, get feedback from customers, and give shoppers a reason to buy.

Some argue that pop-up shops are not worth it because they don’t give you enough exposure. However, this is not true because pop-ups have been around for years and have been very successful in different markets.

Summary.

There is a growing trend of pop-up shops. Many commercial real estate owners and mall landlords have dedicated pop-up spaces to help attract shoppers. A pop-up shop might be worth looking into if you want a budget-friendly way to see if your product is worth investing in. With a pop-up shop, you can get your product into consumers’ hands without spending big bucks on a physical storefront.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.