WHY IS THE IDEA OF THE POP-UP STORE CHANGING THE WAY WE SEE THE RETAIL TRADE
– november 10th 2016 –
The success of the pop-up store is confirming a revolution in urban retailing and raises two key questions. The first may be obvious: can traditional retailing still meet the expectations of its customers? The second might appear rather more surprising: can traditional retailing still meet the expectations of the retailers?
A few years ago, the trend of temporary stores appeared to Atrium.Brussels to be an early indicator of a paradigm shift in the retail sector. Instead of theorising, we applied an empirical approach, testing the concept in situ. In December 2013, we trialled a first pop-up store in Saint-Gilles before repeating the experiment three times : in Jette in 2014, Brussels in 2015 and Etterbeek this year.
These trials showed us that pop-ups provide an effective response to the aspirations of Brussels shoppers but that the model also represents a particularly effective and innovative method of dealing with several challenges, as much a springboard for entrepreneurs as a tool to revitalise a district.
Our recently published study on the matter demonstrates the way the pop-up model can satisfy all the stakeholders in urban retailing: in first place, the customers who, as revealed by our surveys and panels, seek not just an original, quality offer but also surprise and amazement during their act of consumerism. Temporary shops are emotionally charged places in the sense that they tend to promote new experiences in unexpected locations within a predetermined period of time…
Aspiring retailers can take also advantage of the experience. The temporary shop is a flexible tool that allows the retailer to test a concept, a product or even a skill, with little outlay and risk. Additionally, artisans and creators, particularly, can get themselves known without having to meet the requirements of multi-brand names that may demand hefty royalties on sales in exchange for space in their shop.
And the pop-up store model allows owners to profit by re-letting their empty units quickly with little in the way of fees, achieving a return on their investment, less money than continuous letting, certainly, but much better than an empty unit threatened by abandonment…
Finally, we learnt from our experience in Rue Namur that the pop-up store can have positive effects on the appeal of a district, and that, despite its temporary nature, its impact can be perpetuated within a longer-term action plan.
That’s what we know. And this is what we can guess at… The emergence and the ongoing success of the pop-up store indicate a paradigm shift in our society. It is a quiet revolution, which will no doubt considerably affect the way we view retailing in general, and urban retailing in particular. This assumption gives rise to three postulates :
Postulate no. 1 : The technological revolution, particularly the emergence of global, online retailing, means that local retailers have to deal with increasingly demanding clientele who seek greater exclusivity, originality and emotion in the ways they consume. Physical retailing must recreate itself, based on more experiential formats like that offered by the pop-up store.
Postulate no. 2 : This clientele, more connected, more mobile, and more fickle, has a direct impact on the intrinsic nature of retailing. Shops no longer have to open throughout the year… Restaurants no longer have to stay in the same place throughout their life… Like the market, which is also experiencing new growth in Brussels, the pop-up store is reinventing the age-old notion of nomadic trade.
Postulate no. 3 : The context of the financial crisis is inextricably linked to the emergence of the pop-up store. The methods of opening a temporary shop are simple and flexible. It makes sense that this formula should be one of the solutions most used by entrepreneurs to sidestep the crisis with limited risk.
In view of these hypotheses, we may go on to ask the following questions: is the traditional, long-term retail model still able to meet the expectations of today’s customers ? And in particular, can it still meet the expectations of today’s retailers ?
By eschewing the permanent nature of urban retailing, the pop-up store responds – right now – to customers’ ever more demanding experiential shopping requirements. And yet, with the arrival of Uber, Airbnb and Menu Next Door, we have seen how the co-habitation of two different economic models can cause serious antagonism. We at Atrium believe that the extension of the pop-up store could eventually be the source of another generational conflict between two business models.
There is no clear legal framework tailored to temporary retailing and hence the question of unfair competition with traditional retailing is already being raised. With just cause if, tomorrow, a retail giant (Amazon?) were to take advantage of the absence of regulations – and the lack of legislation – to make the pop-up store its model of choice.
The need to develop a commercial framework for temporary occupation has, therefore, become urgent. Given the recent creation of regional regulations on commercial leases, we would like to draw on our expertise to assist and advise regional government. In view of their multiple benefits on the economic health of the city, we seek that pop-up stores continue to prosper in Brussels.
While the position of pop-ups should, of course, be clarified, we must nevertheless ensure that any institutionalisation does not remove their flexibility, the prerequisite for their existence.
Additionally, widespread use of the pop-up model will eventually lead to the appearance of a new trade: the itinerant pop-upper, the permanent temp. With all the risks that brings.
Jonathan Dehas, Head of Communication & Marketing at Atrium.Brussels and Arnaud Texier, CEO of Atrium.Brussels