How to Start a Pop-Up Shop and Set Your Brand Up for Operational Success
Stitch Labs is the best operations platform for multichannel management.
Pop-up shops are effective tools for brick-and-mortar and e-commerce brands to give their business an extra boost. Estimated to generate $50 billion in revenue in 2018 as an industry, a pop-up requires fewer resources than a permanent storefront — and it’s only a short-term commitment.
Although a pop-up is only temporary, it’s not always easy to pull off. The to-do list seems to be never-ending, and small yet important details often fall through the cracks.
Nothing worth having ever comes easy. With careful planning and a strategic approach, you can make your brand’s next pop-up shop the success you’ve always imagined, or at least one that’s newsworthy.
Why brands use pop-ups
Though pop-ups have been trending for a while, it’s still a tactic that many brands continue to have success with. There are many reasons pop-up shop business ideas are so successful.
Whether your brand needs a boost, you’re testing out something new, or you’re simply looking to scale up your competitive advantage, we have provided some of the motivations behind launching a pop-up:
The path to purchase was traditionally linear, but as more channels are implemented, more opportunities to sell emerge—which also makes it more likely to lose a sale. Multichannel selling and exploring offline retail through pop-ups is one way to capture sales regardless of where the customer is.
Consider this: Only 7 percent of shoppers are online-only, while nearly three-quarters use multiple channels throughout their purchase process. The consumers who have heard about your brand and browsed your products online are primed to visit your pop-up event.
You also have the scarcity principle working in your favor. Pop-ups exist for a limited amount of time; if a consumer doesn’t jump on the opportunity to experience it, they miss it altogether. This fear of missing out (FOMO) will drive shoppers to your pop-up, and hopefully translate to revenue.
Build buzz and awareness online
Although your pop-up is happening offline, that still translates to an online boost. L2’s Intelligence Report: Death of Pureplay Retail found that online brands get a significant digital boost when they engage in physical retail. You can use a one-time brick-and-mortar approach to supplement your digital efforts.
To optimize your pop-up for this boost in digital awareness, set your space up to prompt visitors to share their experience. St. Ives’s pop-up event in New York City was bolstered with social media posts hashtagged with #StIvesMixingBar.
Create an immersive brand experience
Pop-up shops offer digitally native brands the rare opportunity to connect with customers face-to-face. This in-person interaction rounds out their digital engagement with your brand, culminating into an immersive brand experience.
This is important not only for the perception of your brand but also for your bottom-line. A Harris Group study found that 72 percent of millennials would rather spend money on experiences than material items. An experiential pop-up can give them a reason to spend money on both, not to mention foster a stronger brand-customer relationship.
Test new markets and concepts
While a permanent brick-and-mortar requires more capital to pull off, a pop-up is a small-scale and more accessible way to test physical retail as a selling channel. You can use a series of pop-ups to see where the market is more viable, concentrating on areas where you have lots of existing online shoppers.
Before Glossier invested in permanent storefronts, they tested physical retail through pop-up shops. Half of shoppers who visit their store and pop-up locations convert; Warby Parker’s brick-and-mortar expansion began the same way.
But, you don’t just have to test having a store. Brands also use pop-up shops to test new product ideas, markets, campaigns, messaging, partnerships, and more.
Women’s intimate apparel brand Evelyn & Bobbie has used pop-ups to test product ideas and get more feedback from shoppers. In fact, the main goal of their first-ever pop-up was exactly that: to learn which products their customers liked and why.
“[We wanted] to gather and collect fit data to keep improving our algorithm online, where customers can input a series of measurements and then be assigned to their correct sizing,” says social media and PR manager Cassie Pauley. “It’s radically changed our business model as we shifted from selling entirely online.”
As e-commerce continues to evolve at a rapid pace, it’s more important than ever to differentiate yourself from the competition. Pop-up shops are one way to do that.
Pop-up shops can help you stay competitive through testing and optimizing your products and strategies, creating stronger connections with customers, and ultimately boosting sales. It can also give you added reach during busy holiday and selling seasons so you can stay a leg up on everyone else.
Sometimes, the drive to stay competitive comes from external sources. CEOs, upper-management, and investors may put pressure on the team to do a pop-up because it’s buzzworthy. If you take a strategic approach, you can ensure that your pop-up is successful and appeases leadership.
Provide added services and education
Retail as a service is one of the latest industry trends; in other words, it’s no longer enough to just be a store. And, pop-ups are a great way to provide added services and value to your customers.
Take a look at Nordstrom Local. This innovative pop-up shop concept is completely merchandise-free. Instead of selling product, they provide styling services, alterations, and curbside pick-up.
And if you have a new or technical product, consumers may first need some education before they’re ready to buy. Especially considering that brick-and-mortar shoppers prefer in-store because they can physically touch, see, feel, smell, and even wear the product, according to a survey by Retail Dive. You can use a pop-up as a way to demo your product and prove the value to customers.
Seeing is believing, right?
How to start a pop-up shop
Although a pop-up may be technically “easier” to pull off than launching a full-on storefront, it still requires serious planning. Our biggest pop-up shop tip? Approach it more like hosting an event and less like launching a business.
“Making sure that you have the right operational processes in place is one of the most important factors in having a successful pop-up,” says Raana Radfar, Customer Success Manager at Stitch Labs. That includes everything your customer sees along with everything that’s going on behind the scenes.
When it comes to determining how to start a pop-up shop, you’ll want to consider the following:
- Store layout and design
- POS system
- Inventory management
- Tracking KPIs
Choosing your location really boils down to the goals of your pop-up. If you’re testing a physical storefront, go where your biggest clusters of customers are located. If you want to get a bunch of feedback or build buzz about your brand, go to a major market like New York City or Los Angeles.
It’s also a good idea to host your pop-up in an area that has ample parking or access to public transportation. If it’s too difficult to get to your event in the first place, customers may be dissuaded from coming.
Especially if you’re not doing much marketing and promotion, you’ll want to be in a place that has lots of foot traffic. Look for other businesses that complement your own brand. Do they have similar customers as you? If so, that’s a good indication that you may benefit from their foot traffic.
Some locations are established pop-up venues, like Fourpost’s Mall of America and West Edmonton Mall spots. Brands share the space with other tenants, and consumers are already aware of and seek out the venue. This is a great way to piggy-back off the venue’s success.
Or you might be doing a mobile pop-up shop, in which case you’ll want to secure multiple locations in advance to book your “tour.” The Rick and Morty mobile pop-up, the Rickmobile, is one great example of a perpetually traveling retail experience. They’ve sold to more than 70,000 customers through their pop-up.
Store layout and design
When it comes to customizing the space for your event, it’s important to remember what you can and cannot do — and to get it in writing. This should be well-documented on your lease agreement.
Once you understand the limitations of what you can do with the space, think about the bigger picture of your pop-up. “Understand how you want the pop-up shop to run,” says Radfar. “It’s important to set those expectations from the start which will allow you to put the processes in place as you’re getting everything together and training the team.”
Your clear vision will help dictate what other systems you need to put in place for a smooth event.
For example, some pop-ups are meant to be fulfillment centers. Others are more for customers to place orders for products to be sent to their home. This should inform the design of your space, as that layout also sets expectations for your customers.
Your pop-up can’t run itself; you’ll likely need to enlist some additional staffing help to pull off the event. This can go one of three main ways:
- Hire temporary retail staff
- Use existing employees to staff the pop-up
- Leverage the venue’s staff (if available)
To hire temporary retail staff, you can check the standard job boards like Indeed, Monster, and even Craigslist. But there are also more niche job sites where you can post the opportunity and/or peruse qualified candidates. Here are just a few:
You can also share the need on social media or with your email list. Who knows, one of your existing loyal customers could also make the perfect brand ambassador at your next pop-up.
Once you’ve found the talent, it’s important to train them appropriately. “Your processes are only as good as the team that’s actually doing them,” says Radfar. “Make sure that you have a really strong onboarding; visual diagrams of your processes are always helpful.”
For instance, often the person who takes a customer’s “order” isn’t the same individual who retrieves the actual product(s). You’ll want to set up specific communication guidelines between those individuals. Is this information they need to give one another, or do you have your tech set up to automatically notify the appropriate people? It can also be helpful to designate a point person, or team lead, for each “department” of your pop-up.
“Lay out that groundwork from the beginning,” says Radfar. “And make sure you have a team that understands the importance of process.”
In regards to the tech you’ll need, the point-of-sale is arguably the most important, says Radfar. This isn’t only where and how you’ll be administering transactions, but also where you’ll collect more information that you can analyze later on.
She also recommends setting up any email marketing campaigns prior to the pop-up. “If you’re creating a POS order for a purchase that gets shipped to the customer, you need to make sure there are automated emails updating them on the progress of the order,” she says.
When it comes to choosing the right POS system for your pop-up, consider the following:
- Does the POS talk to your inventory software?
- Do you need a solution that can run on a mobile device?
- What types of reports or metrics do you need to track?
- Are you running multiple pop-ups or just one location?
- Do you do offer gift cards, promotions, or a loyalty program?
- Does it offer centralized retail management?
- Will it automatically sync data with the rest of your tech stack ecosystem?
- Is it cloud-based?
- How long is the contract?
Here are some POS options you may want to try, depending on your needs:
Regardless of the option you choose, it’s important that your POS seamlessly integrates with your inventory management software. Which brings us to our next consideration …
You’ll want to make sure your existing inventory management software can integrate with this new selling channel. If it can’t, this could be a sign that it’s time to upgrade.
As we mentioned before, you’ll want to make sure the IMS you’re using will integrate seamlessly with your POS. It’s essential that these tools talk to one another so operations can stay smooth and everyone can be on the same page.
Plus, it’s more important to be nimble in a pop-up environment. Things are moving fast, and you need the tools that can keep up. Set up stock alerts to notify your team when it’s time to grab extra inventory, reroute the orders to ship-from-store, or pull something from the shelves (even if only temporarily).
Remember, you don’t need to put everything on display at once. “A lot of pop-ups hold really small quantities of inventory and just for their core products,” says Radfar. “For example, if they sell 500 SKUs, they’ll maybe only put 50 SKUs of their highest-grossing or most-popular items in stock and they’ll hold the inventory in the back room of the popup.”
What happens when a customer wants to purchase two items, but only one is available? You’ll want an IMS that can handle advanced order management — things like rerouting, splitting, and more.
Forecasting for a pop-up can prove difficult, especially if it’s your first one. Many pop-up spaces don’t have tons of room to store extra stock. To make sure you have access to product when you need it, let your 3PLs in the area know about the upcoming event. They may be able to offer extra space to store merchandise or support when it comes to quickly fulfilling orders.
No warehouse nearby? Consider enlisting a temporary one. This can help you replenish merchandise quickly during the pop-up.
Stock level is just one KPI that you’ll want to keep a close eye on before and during your pop-up shop. And to really have operational success, it’s important to look at the data holistically.
It’s important to look at inventory across all your warehouses and selling channels. “You can create low stock thresholds for your pop-up warehouse and create an automated transfer order based on the thresholds already in the pop-up,” says Radfar. “That transfer order, if you’re using an integrated 3PL, will get sent to the 3PL. Then they’ll send it to the pop-up once they receive it.”
You’ll also want to keep an eye on your conversion rate. In other words, out of the people who entered your pop-up, at what rate are they converting? To understand this, you’ll need to somehow set yourself up to track foot traffic. This could be through a tool like Dor or ShopperTrak. If your conversion rate starts to dip, this could indicate understaffing, out-of-stocks, or other challenges in your pop-up which need investigating.
Conclusion: Moving forward with your pop-up shop
A pop-up shop is a savvy way to not only boost offline sales but also online engagement with your brand. While they require lots of planning, with an organized and process-driven approach, you can set yourself up in a matter of days.
Remember to set expectations for the type of pop-up experience you’re having — both internally and to your customers. Watch your pop-ups’ performance throughout its duration so you can keep the momentum going.