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Report: Pop-Ups Play an Integral Role in Retail Renaissance

With the rise of e-commerce, the brick-and-mortar landscape has changed—but merchants and shoppers still consider shopping at a physical location to be an important part of a brand experience.

The use of temporary storefronts (otherwise known as pop-ups) has become an increasingly important element of brand strategy, according to a joint study released last week by the University of South Carolina’s Department of Retailing and Storefront, a marketplace for short-term rentals of commercial spaces.

More than 80 percent of the 600 international retail organizations surveyed said they had done at least one pop-up, and deemed those efforts a success. A mix of brick-and-mortar and online brands and retailers were surveyed, and more than half (58 percent) said that they’d be interested in hosting another pop-up in the future.

Rather than looking at these opportunities as a way to instantly boost sales, brands are looking to build lasting relationships with current and potential consumers. Of the sellers surveyed, 63 percent said that the chance to develop personal connections with consumers was one of their top reasons for hosting a pop-up. Generating “buzz,” or chatter about a brand that inspires awareness, was another highly cited reason, at 66 percent.

Nearly half of respondents (46 percent) said that the introduction of a new product was among their top reasons for putting together a pop-up.

While driving sales is the ultimate goal for product sellers, the survey’s respondents felt that courting long-term, loyal consumers was worth more than an impulse buy.

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The top three factors that retailers cited as indicators of success for a pop-up were increases in social media engagement, web traffic and press coverage. Sellers who characterized their pop-ups as successful said that the events helped with market visibility, social media following, and ultimately, sales.

Most commonly, the pop-ups described by the survey’s respondents lasted between three days and two weeks. Thirty-five percent of pop-ups fell into this time range, while 28 percent were shorter, lasting only one or two days. Less than one third (29 percent) of respondents said their pop-up leases were longer, lasting up to three months.

“The retail renaissance is all about the customer experience. Sales transactions can be conducted online but building personal relationships and lasting engagement is best done in person,” said Mark Rosenbaum, Department of Retailing chair and professor at the University of South Carolina.

“Pop-ups are no longer about one-off promotions, sample sales or selling off excess inventory; they are about creating customer communities, instant and measurable buzz, and personalized experiences that require a physical presence,” he continued.

Pop-ups also offer e-commerce retailers and direct-to-consumer online brands the chance to test the waters in a physical retail space “without the need to engage in excessive purchasing and maintaining hefty inventories,” said attorney and retail instructor Karen Edwards, a co-investigator of the study.

Edwards said that short-term storefront operations allow brands to be more efficient with other resources, too, like staffing. “The cost-benefit ratio regarding pop-ups is significant, even for digital native brands,” she concluded.