The National Retail Federation (NRF) expects retail sales in November and December to reach $655.8 billion this year, and retailers across the globe are all focused on getting a piece of that pie. Here at Onestop Internet, we handle digital commerce strategy and operations for a variety of brands, and are acutely aware of how intense the retail competition is this holiday season.
E-commerce is projected to make up nearly 10 percent of total sales, with the remaining 90 percent going towards in-store purchases. One might assume this means online retailers will miss out the chance to engage brick-and-mortar shoppers, but that’s not necessarily the case.
Rather than forfeit the opportunity to connect with consumers in physical retail locations, many retailers will open pop-up shops throughout the season. A pop-up shop is a temporary store, and opening one is a good way for online retailers to generate buzz and drive offline sales. It is substantially less expensive than investing in a permanent brick-and-mortar location, but provides the same opportunity to engage consumers through a physical experience. This is particularly helpful when selling a product that requires user interaction.
For example, let’s look at Amazon’s use of pop-up stores. According to Business Insider, the web giant began experimenting with pop-up stores when the Echo was being developed in 2013. The Echo is a hands-free speaker you can control with your voice thanks to Alexa, the artificial intelligence that powers the product. Since the value of the Echo lies in its ability to respond to voice commands, giving shoppers the chance to interact with the product and personally experience its capabilities is a savvy move by Amazon.
Beyond the Echo, Amazon uses pop-up shops to promote all its hardware devices, including the popular Kindle e-reader and Fire tablet. It also gives shoppers a chance to watch shows powered by Amazon’s Fire TV. All these products are meant to provide an experience, which is why they’re so well-suited for a pop-up shop.
Google also recognizes the value of pop-up shops for promoting hardware, and recently opened its own ‘Made by Google’ pop-up shop in New York. There, shoppers can explore Google’s full line of products – from its VR headset, dubbed Daydream View, to its smartphone called Pixel, and everything in between – getting the chance to experience the functionality of each product first-hand.
When you consider the fact that Apple is the biggest threat to both Amazon and Google in terms of hardware sales, it makes perfect sense that they’d want to create a space to connect with consumers in the same way Apple does with its permanent brick-and-mortar locations. Given how frequently consumer electronics show up on holiday gift lists, it’s no wonder Google and Amazon are investing in pop-up shops now. Both retailers want to give offline shoppers the opportunity to discover and experience their products while making gift-buying decisions, and pop-up shops present a way to do that.
In addition to providing an avenue for communicating the value of a product that requires user interaction, pop-up shops are an excellent way for retailers – both online and offline – to tap into a new market of shoppers. For example, teen apparel retailer Wet Seal is opening 13 pop-up shops at General Growth Properties regional malls across nine states this holiday season. The retailer filed for bankruptcy more than a year ago, forcing more than a third of its stores to close, so opening these pop-up shops gives Wet Seal a chance to re-engage consumers it lost to those store closings while simultaneously connecting with a new audience.
Another brand taking advantage of the pop-up trend is Los Angeles-based B Collection by Bobeau, which was launched this fall as a spinoff of B Collection, a women’s knitwear line sold in retailers like Nordstrom and Bloomingdale’s. The brand is opening a pop-up shop in New York’s meatpacking district, which will remain open through mid-January. Chief Executive Officer Tricia Franklin tells WWD the pop-up is meant to elevate the brand’s profile on the east coast, “as we grow the brand, we wanted to create a New York footprint and felt a holiday pop-up shop was a great way to introduce the brand to the city, creating awareness and demand during the busiest shopping season of the year.”
Pop-up shops provide an opportunity for online retailers to connect with offline shoppers, and for traditional retailers to engage new audiences and expand their reach. So, keep your eyes open if you’re planning to shop in-stores this holiday season, because you never know what will be popping up around you.