We see it happen every Halloween and Christmas. Stores set up shop, let everyone know they are there, they get lots of traffic, and yet, before you know it, you can’t remember what business used to occupy the now-empty building space. But if you look a little closer, you may notice that these stores that come and go – usually specializing in a single product, theme or niche – are around much more than just around the holidays.
Walk through any mall and you will see these “pop-up” stores, as they are referred to, in the form of kiosks selling the latest nail-bed oil, the hottest gadgets that all the teens are after, or even temporary bookstores selling a collection of close-out books.
At the outset, it may seem that these pop-up retailers are more of a headache than they are worth. But if you really look at what is going on with this trend, it becomes clear that the transaction is a win-win situation for all concerned.
How it Works
Pop-up stores work by someone setting up a temporary store, either in a kiosk or by renting retail space. Just like any long-term store that opens, the business moves in, stocks its shelves, and then opens its doors to the public.
The only real difference between a pop-up store and a permanent one is that the pop-up store knows it is only going to be there for a set amount of time. The traditional store, in all honesty, has no idea how long it will be there, because that is largely dependent upon its ability to sell a lot and not see its lease go through the roof when it comes up for renewal.
In today’s economy, many commercial retail spaces are sitting empty, and more businesses close their doors each month, adding to the problem. Building owners who may have been reluctant to do short-term rentals in the past are now, shall we say, much more open to the idea of short-term rentals. Gone are the days of being bullied into one- or two-year-long lease agreements.
Why it Works
In short, pop-up stores create big time buzz. When people see them, it’s something new and exciting, and they stop in and purchase. The stores give the public a crack at what you are selling, but with more of an urgency to buy, simply because the consumer knows that what you are selling won’t be there in a week.
Pop-up stores are highly effective, not only when it comes to selling holiday-related items, but also for specialty items, trendy products, limited-edition goods and, believe it or not, restaurants! These stores provide entrepreneurs with a chance to test their product on the community without having to make long-term commitments in the form of lengthy leases and agreements. It also gives you a chance to get your name out there, let people know you are a real person and company, collect your prospects contact info, and then continue those sales online.
Deep down, we all know that some businesses may only thrive this way, which is not necessarily a bad thing; it really comes down to knowing your product and your audience. If you are selling Halloween costumes, for example, you will spend 11 months out of the year simply chewing through what you made during the month of October. A Halloween costume retail store would have a difficult time being profitable each month of the year.
Let it Pop
So think about what you have to offer, and whether a pop-up store would be the better route to take. If you love to make fudge, for example, open a pop-up fudge shop mid-November and close it down Jan. 1. (We all know that everyone starts their diet then.) If you like to make watermelon boats for backyard picnics, set up shop just during the summer months. You may be amazed by how much you can cash in over such a short amount of time.
Pop-up stores may not be the best route for every type of business. (I mean, who wants to hire a pop-up pool installer, for example?) But stores like this are a sensible approach for many types of businesses. And, in our current economy, they provide a win-win situation both for entrepreneurs and for those trying to lease retail space. So let the popping begin!
Mike Michalowicz is the Author of the business cult-classic, The Toilet Paper Entrepreneur and is a columnist for the Wall Street Journal. Michalowicz has built three multi-million dollar companies, is a frequent expert guest on MSNBC, CNBC, ABC and other television networks, and is a nationally renowned speaker. His website is http://www.ToiletPaperEntrepreneur.com and his book is available at Amazon.com and all major bookstores.