Stores bank on temporary sites to boost holiday-season sales
Stores bank on temporary sites to boost holiday-season sales
The Blade, Toledo, Ohio
As co-owner of Cake in a Cup, Lori Jacobs was searching for a way to draw more people to her award-winning gourmet cupcake store that lies tucked back in a strip center off of Central Avenue in Sylvania Township.
One day this fall, the answer popped into her head.
Ms. Jacobs and her partner, Dana Iliev, would open a pop-up store in Franklin Park Mall.
Pop-ups -- temporary stores that carry a limited amount of merchandise -- have been around for more than a decade, but their numbers are growing quickly as retailers, including small ones like Cake in a Cup and big ones like Target and Toys R Us, see them as good ways to bolster seasonal sales or test the potential for an additional store without making a huge investment or signing a long-term lease. Toledo-based glassware maker Libbey Inc. is also experimenting with the concept this year.
Cake in a Cup's pop-up store -- a small glass display featuring four of their most popular cupcakes -- opened Nov. 1 and will remain through December. Ms. Jacobs and Ms. Iliev, who won an episode of Cupcake Wars on the Food Network channel in 2011, hope the move will win them some new customers, but also help decide on whether they need a second full-size store.
"The idea of pop-up stores has grown in the last few years," said Kathy Grannis, a spokesman for the National Retail Federation. Sometimes called "flash retail," pop-up stores let a store owner "put their brand in front of customers that may not know about that brand for less of a risk than signing a full-term lease," she said.
PopUpInsider, an industry newsletter, defines the concept as temporary tenants stemming from an event lasting one day up to one year. Pop-ups can be holiday stores, concept stores, brand marketing, events, galleries, exhibitions, or cafe/restaurant promotions, but they involve a tenant taking empty retail or commercial real estate, outfitting it to suit their business needs, and then operating the space on a short-term basis with a finite assortment of goods.
According to market research in July cited by Reuters news service, the number of U.S. pop-up stores has grown from 2,043 in 2009 to 2,380 in 2012.
Exactly when the concept originated is subject to debate. Some credit the start of the trend to West Coast retailers a decade ago. But other sources argue that pop-ups began in the late 1990s on the East Coast.
Christina Norsig, author of Pop-Up Retail, an industry guidebook, and the founder of PopUpInsider, said it can even be argued that Toledo-based Hickory Farms Inc. began the first pop-up stores with its seasonal mall ministores several decades ago.
"You could say it's been under our noses all along but it's really just getting attention of late," she said.
Pop-ups first became noticeable in the early 2000s when mall and strip-center operators began leasing empty space to seasonal Halloween and Christmas stores.
But then traditional retailers jumped on the concept. Target, for example, opened a 1,500-square-foot store that operated for five weeks in New York City in 2003.
Other traditional brick-and-mortar operators along with Internet-based retailers quickly embrace the concept. "I call it bricks and clicks to quicks," Ms. Norsig said.
The recession, she added, generated a lot of vacant retail space and created even more opportunities for large blue-chip retailers like American Eagle, Walmart, J.C. Penney, Macy's, Gucci, Ann Taylor, and Crate & Barrel to set up pop-up seasonal stores in malls and elsewhere.
Ms. Norsig said pop-up stores are proliferating because retailers are looking for new ways to keep their brands in front of a fickle consumer.
"You're seeing retailers who now have to think about in what way they're going to have to grab the consumers' attention. There are now so many ways you can purchase -- at a retail store, on the Internet through a computer, a tablet, and a phone," she said.
Not really new
Toledoans have seen pop-up stores for some time now, though they probably didn't recognize them as such. For example, Honey Baked Hams has been operating seasonal pop-up stores inside The Andersons general stores for years, while Hickory Farms has opened temporary pop-up stores in various locales around Toledo for decades.
But the last few years have brought a new wave of pop-ups. They not only surprise the customer with something new and different, it's also a great tool for retailers, Ms. Norsig said.
"When you operate a pop-up, you are doing good due diligence. It's the ultimate beta test," she said. "There are ideas that don't merit a store 12 months a year."
Last year Toys R Us opened a pop-up Toys R Us Express inside Franklin Park Mall even though it has a full-size store just outside the mall on Monroe Street. It is doing the same this year, with a 4,000-square-foot pop-up store inside the mall. It opened its first Express stores in 2009 and will open 200 this season.
"Over the last few years, many of our Express locations were located near a stand-alone Toys R Us store, and we didn't see a negative impact on existing stores. In fact, we found that the Express stores drove additional traffic to our existing stores throughout the year," said Alyssa Peera, a spokesman for the Wayne, N.J.-based toy retailer.
"The Express stores allow us to introduce new customers to the assortment and specialty services that Toys R Us has to offer, and gift cards are generally among the best-selling items in our Express locations, leading customers back to our traditional stores after Christmas. Establishing a presence in malls and other shopping centers allows us to take advantage of seasonal foot traffic in these locations, and cater to on-the-go parents, grandparents and last-minute shoppers looking to purchase everything on little ones' wish lists in one quick trip," Ms. Peera added.
Erika Williams, general manager of Franklin Park Mall, said another a new pop-up store, Make Me Makeup, a retailer specializing in customized lip gloss and makeup, is operating at the mall only during the Thanksgiving weekend.
"They're trying to test the Toledo market," Ms. Williams said.
'Testing the waters'
For Cake in a Cup's owners, their Franklin Park pop-up is test on whether they need additional stores in the Toledo area.
"There are a lot of malls that have cupcake shops in them. We're kind of testing the waters with this," Ms. Jacobs said. "You get the best of both worlds. You get to see if it works out, one way or another, and you have an out if it doesn't work out," she added.
"I feel like Toledo is a destination city. We will drive anywhere if we like something. It's not like New York where you're walking around," Ms. Jacobs said. "People will drive quite a distance to come find us. But at the same time we know we're missing out on a large demographic being in one place."
Ms. Jacobs said she and Ms. Iliev cannot afford to open a second full-time store in hopes that it will work out. The pop-up was the perfect solution.
"I went to Houston a couple of years ago and I saw a cupcake shop in the Rice University area. But all they had there was a little pop-up shop. There was no baking done. All of their product was delivered and the only thing they did there was the frosting," Ms. Jacobs said.
"That got me thinking," she added.
Ms. Grannis, of the retail federation, said the benefits these days of pop-up stores far outweighs the negatives. "They basically get to test the market and see if there's demand for their product," she said.
Toledo-based Libbey Inc. already knew it had demand for its Libbey Glassware, which is why it opened its Libbey Glass Outlet many years ago downtown.
But earlier this year the company recognized that it was missing out on sales each holiday season by having its store downtown when so many more customers shop primarily in West Toledo.
As a result, a Libbey pop-up store opened Nov. 21 in the Starlite Plaza on Monroe Street in Sylvania. The store will remain open through Dec. 29.
"We are trying to reach consumers in the western Toledo area," said Lisa Fell, a Libbey spokesman. "We wanted to pilot the concept and try it out for a year.
"We know there's shoppers who love to come downtown. But we also knew there are shoppers who never come downtown but who love our products," Ms. Fell said. "We wanted another alternative for them."
Libbey plans to measure the sales and if warranted, will open pop-up stores in other locales where it has plants and glass outlet stores, Ms. Fell said.
It has no plans for additional permanent stores, just pop-ups, she added.
Contact Jon Chavez at: email@example.com or 419-724-6128.
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