Pop-up shops serve a lot of practical uses for retailers. They can be used to test a product or market, generate buzz, and earn extra revenue. They’re also less expensive to set up and maintain compared to traditional stores, so pop-ups are a popular choice for e-tailers that wish to venture into the brick-and-mortar realm.
If you’re planning to set up a pop-up store or if you already have one and are looking for ways to lower costs and maximize your profits, below are some handy tips you may want to check out:
1. Determine the most cost-effective type of pop-up
There are several pop-up “formats” that you can look into. You can choose to build a booth from scratch or move in to an empty retail space. Or if you don’t need a lot space, you can rent a shelf or table inside an existing store.
Your decision of which type of pop-up to have is one of the most important ones you’ll make, cost-wise, so pick wisely.
Your options include:
* Retail store – Moving in to a vacant store space
* Mall – Setting up shop at a mall, surrounded by other retailers
* Booth – Launching a pop-up store at events like fairs or festivals
* Store space – Taking advantage of shelf or table space within an existing store
* Mobile – Using vehicles such as trucks or buses as your store
* Kiosk – Setting up a small hut or cubicle-like storefront
* Unique – Erecting a completely distinctive store to draw people in
Do note that cheaper may not always be the most cost-effective option in the long run. For instance, renting a shelf or table space from an existing boutique may the least expensive option, but if it’s going to compromise the shopping experience or products you wish to sell, then it probably won’t give you the best ROI. (Besides, as you’ll learn below, there are other ways to cut costs with a large pop-up space.)
Factor in your budget, the amount of merchandise you’re selling and the experience you want your customers to have, then go with the pop-up store that gives you a healthy balance between the three.
2. Collaborate with other merchants
You don’t have to venture into the pop-up space alone. If you’re looking to minimize costs, consider partnering up with other merchants. Find retailers that complement your business and see if you can set up shop together.
Melissa Gonzalez, Brand Activation & Pop-Up Architect at The Lionesque Group says that curated collaboration is a cost-effective way to launch a pop-up. “As a group, you can share the costs, pool efforts on acquiring fixtures to help merchandise the space, split responsibilities of store hours, and co-market the pop-up experience.”
Melissa furthers that there is very little downside to this method as long as you “clearly decide the dynamic of the group and that you align your brand with other companies that create a truly branded experience that is going to elevate your message and amplify your reach to the right audience.”
3. Negotiate with the landlord or management
Don’t sign your rental agreement without haggling a bit with management. Storefront, an online marketplace that helps merchants find pop-up retail spaces recommends that you bring up the following factors when negotiating your lease:
* Refundable deposit
* Shop and property maintenance
Alternatively, see if you can draw up a different type of arrangement with the owners. Jen Lee Koss, co-founder of BRIKA, a crafty online store with a 600 sq. ft pop-up in Toronto, recommends that merchants “get creative” with their rental or lease agreement. “Rather than pay rent, opt for an easy revenue share agreement,” Jen advises.
4. Monitor peak hours and staff accordingly
One of Jen’s top tips for budget-conscious pop-ups is to pay attention to your store’s peak hours and staff as necessary. That way, you won’t end up paying for help you don’t necessarily need. Instruct your associates to monitor the number of visitors at any given time (or use foot traffic analytics tools) so you can set shifts and schedules accordingly.
5. Be strategic with inventory
How you deal with inventory will depend on the purpose of your pop-up. If you’re doing it for testing purposes, Jen recommends that you order small batches first and see which items to invest in. She also suggests that pop-up retailers arrange consignment opportunities with suppliers to minimize risk.
You can also anticipate stock turn through demand forecasting and by generating velocity reports to monitor how products are moving and to estimate how long stock will last.
6. Go for DIY design
Skip the professional decorator. With a little DIY magic, you can create a store look that you and your customers would love. Melissa advises retailers to find inspiration on sites like Pinterest.
“Store design should be a balance of well merchandised inventory and curated lifestyle elements,” she adds. “Focus on top sellers and create a space that has a clean flow and ‘fill in the story’ with branding elements.”
7. Know that DIY can also apply to marketing and PR
Don’t have the budget to hire a publicist? Do your own PR by reaching out to bloggers and writers yourself. Also connect with local journalists. Invite them to your opening or give them an exclusive scoop on your plans.
And be sure to tap into your existing customer base. Spread the word via social media and send an email to customers inviting them to check out your store. Just don’t forget to segment your subscribers by location. You don’t want to send an irrelevant invite to your customers in NYC for instance, if your pop-up is in San Francisco.
8. Find sponsorships
You can secure extra funds (not to mention additional buzz) through partners and sponsors. Melissa advises pop-ups to “Tie in strategic sponsors that appeal to your audience and that want to tap into your following, then invite them to be partners for your opening reception and VIP events.”
According to the pop-up architect, doing so “will enhance the offering for your events and also create an effective opportunity to cross market into their following.”
9. Use cloud apps to run your store
Choose vendors and solutions that are as nimble as your pop-up store. Avoid getting into long-term contracts with vendors or taking on bulky store equipment.
Your best bet would be to opt for cloud-based apps because they’re highly flexible in terms of cost and functionality. Most SaaS solutions offer pricing packages that enable you to only pay for what you need. Additionally, cloud apps can often integrate with other software enabling you to easily extend the functionality of the programs.
10. Track and improve
Be diligent about tracking your sales, stock, traffic, and other store metrics then use the data to find ways to cut costs and be more efficient with your spending.
For instance, monitoring your inventory will help you determine which items to buy and which products to steer clear of. Or, as we mentioned earlier, monitoring your foot traffic and peak hours will help you staff your store more effectively so you don’t end up racking up unnecessary staffing costs.
Additionally, some landlords factor in a store’s average sales per square foot, so you may also want to keep an eye on this metric if you’re planning to re-negotiate your rental agreement.
Do you run a pop-up store? What are your biggest challenges? Tell us in the comments below.