By Arnaud Cazaledes, Samsung SDS America
Pop-up stores are one of the
hottest trends in retail today, and for good reason. These short-term physical
locations are being used across industries to drive sales and take advantage of
seasonal (e.g. holiday themed) or event-related (e.g., a concert) selling
opportunities. To help demonstrate the ubiquity of the trend, consider the fact
that everyone from Sharper Image to Penguin Publishing to IKEA to Kanye West
has tried their hand at pop-up stores. It’s become clear that pop-up
stores are a great way to help boost sales in a short period of time.
However, if you’re only diving
into the world of pop-up stores to boost seasonal or event-driven sales, you’re
missing the true value they can add to your business long term. Data and
consumer feedback are two of the most valuable commodities in modern retail.
Connected pop-ups enable you to cultivate data, test ideas, and engage
customers like never before. From testing new product launches to capturing
customer data for enhanced CX, pop-up stores provide retail businesses myriad unique benefits. In this piece, we’ll provide a crash course on
understanding the real value of a pop-up store, so you can better evaluate the
true ROI it can bring to your business.
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Sales
We won’t spend much time on
this one since the takeaway here is clear. One of the apparent benefits of a
pop-up store is the ability to sell product directly to consumers. Given the
right time of year or event, businesses can move a lot of product in a short
amount of time by launching a pop-up store.
Consumer Engagement
When properly executed, a
pop-up shop is more than just a short-term version of a brick-and-mortar retail
location, it’s a direct to consumer approach that consumers will respond to and
remember. Not only can this make a pop-up store an attraction to passersby, but
it can also drive engagement on other platforms and complement regular retail
and online channels as well. A well-executed pop-up shop will be “high touch”
and lead to consumers engaging with your brand in different ways, such as
following a hashtag on social media, downloading an app, or signing up for a
subscription service.
Enhanced Market Insights
Due to their inherent
flexibility to define when, where and how pop-ups are executed, they are an
excellent test bed to generate meaningful information. Enhanced insights into
consumer behavior and market information may be the most significant benefits
when it comes to launching a connected pop-up store.
What makes pop-up stores unique is they are a means to start an experiment with
products, services, and geographical locations at significantly lower costs and
in a shorter amount of time than launching a full-blown retail location. To
help quantify just how much easier starting a pop-up shop is when compared to a
brick and mortar location, consider that renting a physical space in a high
traffic area like SoHo in New York City can cost up to $150,000 monthly and
it can take up to 18 months to launch a retail location. A comparable retail
store, benefiting from short-term leases and agility, can have rent as low as
$25,000 and be ready for launch after 90 days. Flexibility mitigates risk and
increases your ability to experiment with new ideas and learn about your
consumers’ preferences, unlocking your ability to test, learn and grow.
If you want to gauge market
demand for a given product, you can quickly launch a pop-up store and assess
how consumers respond. If sales look promising, you continue the experiment. If
it’s a flop, you learn from it and iterate without worrying about breaking the
bank for the next test. The same applies for capturing data from each
geographic location that makes sense for the opening of your next brick-and-mortar location, how your customers will respond to a new service or design, or
which product displays are the most engaging. A connected pop-up shop allows
you to capture empirical data and enhance your decision-making. In short, connected
pop-up stores enable you to obtain real-world data from your target market in a
given location. This increased market knowledge can be far more valuable than
any short-term sales boost.
Getting The Most Out Of Your Pop-Up Store
To get the most out of any
venture into the world of pop-up stores, you need to first understand what they
can do for you. By keeping in mind that the full ROI of connected pop-ups goes
much further than seasonal sales uplift, you can better position your business
to get the most out of this exciting new form of retail.
As Director of Solutions Business
Operations, Arnaud Cazaledes is a vital strategic force at Samsung SDS
America. His key areas of focus include corporate strategy,
marketing strategy, business development, technology sensing and analysis,
strategic partnerships, and cross-cultural collaboration. He holds an MBA from
INSEAD, a Masters in Computer Engineering from GeorgiaTech and a Masters in
Computer Science from the leading French engineering school Supelec. A
self-described globetrotter originally from Montpelier, France, Arnaud has spent
time in over 40 countries and has lived in 5 different countries across Europe,
North America, and Asia. In his spare time, he enjoys reading, eating, drinking
wine in true French tradition, and spending time with his wife and two young
children. Read more insights and inspiration on
the Samsung SDS Innovation Blog!
