Due to empty storefronts, cash-strapped brands, and eager landlords, the hit-and-run concept known as the pop-up store has been popping up in cities nationwide.
Established companies and self-starters are using these interim spaces as a way to create buzz, test new concepts, or try out a new neighborhood or city.
A pop-up shop involves a tenant renting empty retail or commercial real estate, outfitting it to suit his or her business needs, then operating in the space on a short-term basis. Pop-ups run the gamut from holiday stores, concept stores, and tax preparation shops to events, galleries, exhibitions or restaurants.
As a short-term tenant, you might be getting a great deal for an empty space; however, costs can sky rocket elsewhere if you’re not careful. Follow these tips to increase the chances of making your pop-up profitable.
Do your research. Before snapping up an empty space, find out if there are any challenges to running a business in that spot. Is there a lack of foot traffic in the area or is there some other problem with the property? Keep in mind the space might be vacant for a reason.
Think seasonally. The key to a successful pop-up is having a significant demand for your merchandise. Selling artisanal gelato will not make much sense in an area that turns icy in the winter. Before signing a lease, consider what the conditions will be like during the period that you will be operating.
Look for alternatives. If you are not successful or not interested in persuading big investors to support you, try soliciting contributions through micro-financing sites, such as Kickstarter, which helps raise money for creative projects.
Think temporary. Unless you expect to open another pop-up after your lease is up, ideally you want to walk away from the experience without having to find a place to store your excess furniture and equipment. Rent, swap, or check Craigslist and consignment shops for affordable items that you can fix up and maybe resell afterwards. If you decide to invest in brand-new furniture or equipment, try to find out what the item’s resale value will be.
Keep buzzing. In addition to generating a lot of buzz at your grand opening, it’s important to keep customers excited throughout the duration of your venture. Companies with deep pockets hire promoters and schedule celebrity appearances. You don’t need to do that to keep the interest rolling. Send press releases to local publications and use social media tools such as Twitter, Facebook, and Foursquare to keep customers updated on freebies, special offers, and new merchandise or dishes.
Learn from it. Pop-up stores are more often about marketing rather than sales. Since you’ll still have to hire people and pay for other expenses, such as insurance and utilities, the chances of this being a lucrative venture are slim. While you’re there, however, keep an eye on which products are successful (or not) and why. Is your merchandise seasonal? Would customers continue to buy your merchandise if it were sold online?
Remember, the beauty of a pop-up is if it doesn't work, it's only temporary.