At Creative Marketing Arts we are noticing that more and more of our shopping center accounts are bringing in “pop-up” retailers. These used to be called temporary tenants but now they have a fancy name. This isn’t a fad anymore; it is the new incubator for retail. Even online businesses are moving into pop-up locations all over America. This is a wonderful way for a new concept to get to know the brick & mortar way of doing business. With a pop-up store they can test the waters and the landlord can test the tenant while the customer gets to shop a new concept so it really is a “Win-Win” relationship. As many of our beloved department stores close across the nation, more brands are considering what the purpose of a physical store should be.
Long term leases are becoming a thing of the past. In the olden days when I was a marketing director, it was natural for a tenant to sign a 20-year lease. Now the new average is 5 years. I think this is due to the consumer’s behavior-they want immediate gratification and the newest, latest concepts in food, fashion, technology and more. Things change so quickly online that brick and mortar can’t keep up. Therefore, a pop-up retailer is perfect.
According to POPUP Republic, a retail marketing database, the pop-up industry was valued at $50 billion in 2016. Meanwhile, in its 2017 outlook report, CBRE forecasted that the future of physical retail would look like “rogue retailing”: a model that requires more flexibility on behalf of both landlords and retailers in order to account for greater risk when setting up shop in the market. Overall the cost of retail real estate is projected to climb by just 1 percent in 2017.
The times are changing and we cannot do business like we used to. Technology, behaviors and long-term commitments to leases no longer make sense so this is a good solution for both parties trying to make a good experience for our shoppers.
Some of the landlords are putting deals together that can organize and incubate retailers like a “retailer in a box”, allowing concept, staffing, set-up and other logistics to come together seamlessly without a lot of outlay for tenant allowances and outlay of cash from our retailers. Plus, it sets us all up for a great relationship with our new retailers.
Blackstone, Simon and many others have worked with virtual retailers such as Google, Topshop, and Spotify to go from virtual to pop-up in many of their locations. What a wonderful way to emerge from the internet and interact with customers who already know and love you; it is an instant connection with a lot of loyalty behind the brand from the get-go.
Pop-up retail is not a flash in the pan it is here to stay and we at CMA are very excited about the opportunity to work with these creative partners. It is a great way to provide fresh concepts and generate a buzz online with social media and engage our customers to come out and see what is new at the properties we are marketing.
We just booked several retail trucks to join in on a large Birthday Bash we are hosting in Danville at the Livery. This is a property that has no soft goods so we invited local retail trucks to bring the soft goods to our event. If the trucks do a brisk business maybe they will come to all our events, and if that works maybe we can introduce them to the leasing agent and put them in an inline space.
So, Gurus just as we all know, change is inevitable. Retail is always going to be here…it isn’t going away, it is just going through a major transformation. The good retailers are here to stay and we are here to help them target, achieve and succeed.