How Big Brands Ruined Pop-Up Retail (And How They Can Fix It).
When I started out in economic development during the 2008 recession, pop-up retail was everywhere.
In an economy that was bleeding jobs and shuttering stores everywhere, pop-up retail seemed like a silver bullet. Pop-ups provided space for local entrepreneurs to grow businesses. They filled empty storefronts that otherwise were gaping reminders of scarcity and loss. They created momentum and energy at a time when people felt scared and uncertain. Real estate owners were eager to experiment, if it meant a shot at revenue and a bit of publicity and excitement. Win, win, win.
And so we had a mini golden age of pop-ups: dog biscuit bakeries, vintage sellers who also made greeting cards, speakeasy-type bars that were only open a few days a month, and social-impact salons, part hair, part ideas.
Manifesto Bicycles, a pop-up shop in at Popuphood in Oakland, CA. Popuphood launched a year or two after the 2008 recession. The project’s goal was to create opportunities for local businesses to grow and stabilize, while activating vacant storefronts and energizing empty streets. This New York Times article gives a good overview of the project at launch. Now, links to Popuphood’s website redirect to Storefront, a venture-backed company that is described on Crunchbase as “the world’s largest marketplace for short-term retail spaces.”
Photo by Jason Henry for SF Gate, via the New York Times.
But as the trend has grown, the model has begun to shift.
As the pop-up movement gained popularity, corporate brand teams began to see the marketing potential in the model. Rent a space, deck it out in photogenic installations, sell product in some innovative way involving tablets probably, give the superfans a new experience, and pick up a ton of brand awareness IRL.
As big brands rolled out pop-ups around the country, the market dynamics began to shift. In the early days of the pop-up trend, pop-ups were a great way for smaller companies to test new markets or products before investing in brick and mortar locations. Big brand pop-ups are totally different—they are designed as large-scale marketing opportunities, driven by eyeballs, not profit. The result? Smaller retailers lose out on pop-up space opportunities because they can't compete with the marketing budgets of major corporations.
Here are three problems with pop-up retail I’m seeing these days:
Small business pop-up shops are being crowded out by large corporations.
Pop-ups are becoming less about experimentation and entrepreneurship and more about marketing
The economics of pop-ups don't always pencil out for small business owners or landlords.
Let’s look at each of these in more detail.
Pop-Up Problem #1: Small business pop-up shops are being crowded out by large corporations.
In the early days, I saw a lot of pop-up projects that focused on creating affordable space for local entrepreneurs. But as often is the case in our capitalist economy, big brands began to move in--literally--and drive up prices.
When a big company does a pop-up shop, they can afford to pay much higher rents than a small business. This drives up prices for everyone, making it harder for small businesses to afford pop-up space. And it’s not just the rent. Big brands can also afford to pay for prime pop-up locations and premium build-outs, while small business pop-ups have to do their best with leftover casework and inadequate systems in less-trafficked neighborhoods.
Big brands often don't support the local economy. They bring in their own mass-produced items, staff, and marketing materials. Since their procurement and staffing, and training, are often centralized, they don't buy from local vendors, and they don't hire local workers. By contrast, small businesses are much more likely to source their materials and staff locally.
This is a huge problem, because one of the main reasons we support small businesses is because they put money back into the local economy. When big brands come in and do pop-ups, they don't support the local economy in the same way. In fact, they can often take money out of the local economy.
When a customer shops in a local pop-up, their money goes to local artisans, for goods made from local or recycled materials. They buy items that celebrate and perpetuate local traditions and culture. They experience terroir, and the power of community economies. When a customer shops a big-brand pop-up shop, they buy merchandise manufactured overseas, possibly in unsuitable conditions. Instead of supporting a local business owner and growing the Their money goes to publicly traded corporations or venture-backed startups, paying back yacht-owning financiers instead of contributing to sustainable community growth.
The thing that annoys me the most is: big brands don't need pop-ups to succeed. They're already successful! They have so many resources and options! A pop-up is just a marketing gimmick for them. But for a small business, a pop-up shop can be make-or-break.
There are a few things that can be done to correct for the impact of big-brands on the pop-up market. Some ideas to level the playing field for small businesses in the pop-up retail space:
Sourcing locally: A requirement that all pop-up shops source a certain percentage of their products, buildout, and/or marketing materials from local vendors. This would support the local economy and put pop-ups back in touch with their original community focus.
Providing jobs and training: Incentivizing larger companies to create employment opportunities for local residents, so that pop-ups benefit the people who live nearby, not just the people who come to visit. Local residents should also be given priority for any training or apprenticeship programs that pop-ups offer.
Encouraging local business partnerships: Local economic development groups can design programs and incentives that encourage landlords to rent to small businesses rather than large corporations. These could come in the form of tax benefits, partnerships with philanthropic groups, or other creative solutions.
Investing in the community: One way that big brands can support the local economy is by donating proceeds from their pop-ups to local causes or a local economic development fund. This would help to offset some of the negative impacts that they have on small businesses. It would also send a message that they are invested in the community and care about its long-term growth.
Clear economic development policy: Restrictions on the number of large commercial pop-up shops allowed in a certain neighborhood or city, or requirements that a certain percentage of pop-up shops be local businesses. Smart policy can create localized economic growth and make sure that pop-up retail benefits everyone, not just the landowners and biggest brands.
Reducing environmental impact: Requiring all pop-ups to use recycled materials, renewable energy, and/or sustainable practices in their buildouts and operations. This would help reduce the ecological footprint of pop-up shops, making them more environmentally friendly.
These are just a few ideas. What's important is that we start thinking about ways to make pop-up retail work for everyone, not just the big brands. It’s time to change the way we assess the success of pop-ups. Instead of simply looking at sales numbers, we should also be considering how much a pop-up has added to the local community or economy.
A Wayfair pop-up shop at the Natick Mall in Massachusetts. Does Wayfair really need a pop-up? Aren’t they already doing an enormous global business without any stores? Can a pop-up even show Wayfair’s ridiculously enormous collection effectively? Do we really need a demo space for basic metal kitchen stools and too-small rugs? This pop-up was in a central part of the mall during the holiday season. Imagine how much a small local business could have sold with that space—and how that would benefit the local community. Imagine a holiday pop-up with local secondhand and vintage shops, so shoppers could buy something unique and sustainable for their loved ones. This kind of pop-up encourages wasteful and unethical shopping practices, adds little value for customers, and sends local spending to Wall Street, instead of Main Street. Malls—you can do better.
Image by AMP Agency for Wayfair, via Boston Magazine.
Pop-Up Problem #2: Pop-ups are becoming less about experimentation and more about marketing.
Pop-ups are known to be experimental: they are about trying something new, taking risks, and being scrappy. Since pop-ups are temporary by nature, they are a great environment to test products, services, and ideas to see if they have potential.
But as pop-ups have become more mainstream, they are also becoming more formulaic and less innovative. Many big brands use pop-ups as a marketing tool to reach a new audience or test out a new product, without actually taking any risks. As a result, the pop-up landscape is becoming increasingly corporate, and less creative and innovative. Instead of creative solutions born of constraints, we are seeing more cookie-cutter pop-ups that lack originality.
There are a few things that could be done to encourage more experimentation and entrepreneurship in the pop-up space. One way to fix this is by encouraging pop-ups to take risks and experiment with their concept, product, or marketing. This could be done through offering grants partnerships, or other incentives to pop-ups that are willing to do something innovative, especially if it ends up adding value for the local community. What if a big brand worked with local artists to decorate their space and sell their work? What if corporate retail brands sponsored a weekly community event catered by local operators?
So much of our built environment has become homogenized: retail streets dominated by major global companies, downtown neighborhoods full of fast casual concepts and drugstores, box stores with vaguely colonial fronts grouped around a parking lot courtyard, multi-use monster buildings with towers of cookie-cutter apartments stacked above a literal mall. These retail environment are easy to navigate for the customer and easy to rent for the landlord. But they also strip neighborhoods of their history and local character, and create bland, corporate, classist spaces that offer little in the way of culture or community. They are safe and boring. They are efficient and ultimately soulless.
Innovative pop-ups can help to break up the monotony of the built environment and add some much-needed life to our streetscapes. They can add whimsy and humor, support local businesses, and create a sense of place. When done right, pop-ups can be a force for good in our cities and neighborhoods. We need places that encourage creativity and risk-taking. We need pop-ups that are willing to experiment and fail, because that is how innovation--and local economic growth--happens.
Here's a few ways a pop-up can be innovative
Move beyond shopping and support community activities: A pop-up can support local businesses by hosting events, like workshops, performances, or shop-in-shop retail opportunities. This could be done through a partnership with a local organization or by working directly with local businesses. Let your space become a platform for the community, and use it to support local talent and creativity.
Change the way you think about marketing: A pop-up can be a great opportunity to experiment with new marketing strategies, like guerilla marketing or experiential marketing. This could be done by working with local artists or performers to create an interactive experience for customers: have a local shop design and distribute old-school flyers on bulletin-boards throughout the neighborhood; sponsor a singing group to do a performance outside; have one of your team go out and promote other local businesses on a larger retail account. Get local, specific, and tactile with your marketing. Delight people. Give them a special moment.
Be creative with your space: A pop-up doesn't have to be a traditional retail space. It could be a food truck, a mobile shop, or even a temporary installation in an empty lot. Get creative and think outside the box when it comes to your pop-ups. What if your company cut costs by buying a mobile retail unit that you could use over and over, and turned the cost-savings into a fund for local pop-up grants? What if you re-used a trade show setup and made it into a story about sustainability and zero-waste? Find ways to cut costs and make pop-ups sustainable for your company, and invest the extra funds into local people and initiatives.
Doing something that is not retail: Non-retail pop-ups can add value to a community by providing services or experiences that are not typically found in commercial spaces. For example, fill a corner with books and create a pop-up library; build planters into a parklet and set up a small teaching garden, or turn part of your pop-up into a creative workshop or maker space. Step outside shopping, and let your brand stand for community engagement instead.
Interacting with the environment: A pop-up can enliven a space by interacting with its surroundings in an unexpected way. This could be as simple as setting up a chalkboard on an empty wall and encouraging people to write messages, or hanging art from local artists. It could also be more interactive, like providing umbrellas for customers during a rainstorm. Find ways to connect your pop-up with the time and place it inhabits, and make memories for people. Leave your mark on the community, in a good way, through pragmatic and artful action.
Prioritizing sustainability: For example, a pop-up could be made completely out of recycled materials, or use solar power to run its lights and air, or set a goal to run a zero-waste pop-up and share their learnings on social media. Let your intervention be a step towards a more sustainable world, and use your resources to help others learn about eco-friendly practices.
Big brands spend so much on pop-ups--shouldn't that investment result in innovative models and helpful outcomes for all? Corporate pop-up planners can channel their resources into these types of projects to create more than just a fun temporary space--they can use their power to support local economies and build community.
Zara pop-up shop in London: Zara has over 2,259 stores and is present in 96 countries around the world, and the number continues to grow. Zara already has more than 15 stores in London, and a huge e-commerce business. Do they really need a pop-up space? These pop-ups are a “click-and-collect” concept, meaning customers come by to pick up things they’ve ordered online, avoiding the need to go into the crowded stores. So this means that Zara now has an even bigger footprint, and even more channels to sell its already unsustainable and non-size-inclusive fast fashion. This space could have been used so much more creatively, in a way that actually generated value for local Londoners.
Photo by Zara via WWD.
Pop-Up Problem #3: The economics of pop-ups don't always pencil out for small business owners or landlords.
Pop-ups sound cute and easy, don't they? They're quick, light, and inexpensive right? They're a fun way to get a lot of exposure and benefit without a ton of investment, right?
Right?
Wrong. Many pop-ups are anything but cheap or easy, and they often leave small business owners--and landlords--with a ton of costs. On the small business side: move-in and move-out are expensive, and most pop-ups are too short to effectively amortize those costs across time. Insurance and permitting can take time and money to procure, and pop-up timeframes are often too tight to get these components in place in time. Not to mention that staffing a store is labor- and cost-intensive, and many of these businesses are doing it for the first time.
On the landlord's side, there are costs as well. Pop-ups are often in vacant storefronts, but getting a space ready for retail is not cheap. The space needs cleaning, and bathrooms need supplies and maintenance. Landlords have to pay to keep the lights on and heat or AC running--if the space was vacant, those costs would go down. Pop-ups need support to access building systems like trash and loading docks, and issues and repairs in the space can tie up building staff that are needed for other priorities. And if a pop-up damages the property in any way, the landlord has to coordinate and pay for repairs before the next tenant could come in.
In short: pop-ups are not always the low-cost solution they appear to be. In fact, they can often be quite expensive--and that's before we even get to the question of profitability.
So what's the solution?
There are a ways that pop-up programs can be designed to minimize cost (and waste) and create more symbiotic partnerships for all:
Longer term pop-ups: Longer term pop-ups amortize cost and create more opportunity for market awareness to develop. With a longer pop-up, small businesses can staff more effectively, have more opportunity for sales and customer exposure, and plan for growth. Longer timeframes also are a hedge against bad weather or other impacts--a few rainy weekends can ruin the profitability of a short-term pop-up.
Community involvement: Pop-ups that involve the community from the beginning are more likely to succeed financially. This could mean working with local chambers of commerce, business improvement districts, or other small business support organizations. It could also mean working with local schools or community groups on joint programming or events. By involving the community in the pop-up from the start, you create a sense of buy-in and support that can increase brand awareness and foot traffic, meaning higher engagement and revenue.
Creative partnerships: Strategic partnerships with other businesses, nonprofits, or city agencies can help to defray some of the costs of a pop-up. For example, a city or landlord could create a partnership that connects small businesses with a pop-up fund run by a philanthropic organization.
Using a different budget approach: Many pop-up programs are managed through a landowner's leasing team, instead of in partnership with their marketing department. Developers and landlords spend tens of thousands on traditional marketing and PR--why not reallocate some of that budget to a pop-up program? Offering free or low-cost rent to local pop-ups in exchange for content and exposure on their channels is a great way to reset the value exchange and align incentives for all. Pop-ups are always marketing engines--why not just treat them as such?
West Elm Local Pop-Up Program: West Elm stores display local artist’s products in their stores under an innovative program called “West Elm Local.” This is a great example of the ways that big brands can use their resources to create local impact and community value, while still adding value for the big brand, and by extension, the landlord.
Photo by West Elm via Metropolis.
These strategies are a start, but there are many other ways to make pop-up programs more successful for all involved. What's important is that we start to think about pop-ups not as a quick fix or a fad, but as an opportunity to create more symbiotic relationships between brands, landlords, and small businesses.
It's time for real estate owners and big brands to step up and help small business pop-ups thrive, working together to create programs and spaces that generate value for everyone. With the right approach, pop-up retail can be a win for everyone involved.
What are your thoughts? Have you seen any examples of big brands supporting small business effectively--or not? Have you been to any pop-ups that have created community connections, or have ideas for how they could do it better?
I’d love to learn more about your thoughts and experiences in the comments below. Thanks for reading! I hope this post has given you some food for thought on how big organizations can help make pop-up retail a success for everyone involved.