Casual observers seeing big-box retail closings and deserted shopping malls may believe claims of a “retail apocalypse,” but the reality goes much deeper than that – and it’s not all bad news after all.
Retail closings, massive big-box format stores sitting empty, and shopping malls losing their anchor tenants are all part of the current retail reality, and it would be easy to draw the apocalyptic conclusion, and blame it all on the Internet. The following chart is indeed disturbing, breaking down by numbers precisely what has closed and in what numbers so far in 2017:
But a deeper look shows that the closings are only part of the story. According to the National Retail Foundation, for every store closing, there are 2.7 store openings.
It’s not an apocalypse, but it is a transition – and reports of retail’s death have been greatly exaggerated. Three things are driving this massive shift in retail:
1. A change in physical format which places less attention on superstores and big-box formats, and more on specialty shops;
2. the realization that retail has to be a multi-channel proposition with ecommerce playing an equal role to brick-and-mortar;
3. and the trend of consumers doing more of their own research online before making a purchase, whether that purchase is online or in-store.
The “pop-up” concept of retail – smaller format stores which offer sell niche or specialized items in a temporary retail storefront – plays a significant role in this shift.
If one is to believe the retail apocalypse myth, a pop-up entrepreneur may be discouraged from entering into the marketplace, thinking that it would be a poor time for such a specialized concept, but Stephen Brooks, “The Pop-Up Expert,” says that the time is right – and the retail shift is opening up new opportunities for smaller, entrepreneurial players to get a seat at the table.
According to Brooks, both established mainstream retailers as well as entrepreneurs and independents are embracing the concept successfully. “What’s happened in the last four or five years is mainstream retailers have taken the idea of pop-up and taken it to a more experiential practice, with things like the Adidas pop-up shops shaped like a shoebox, or the eBay branded pop-up shops. Larger retailers have popped onto the bandwagon. Of course, they have bigger budgets for taking locations like Grand Central Station for instance. But its roots are really in the independent start-ups.”
In many areas of entrepreneurship, the window for entry is small until it is overcrowded with players with deeper pockets, but the pop-up field has room for everyone, at least for the time being – and those shopping malls which find themselves with empty space are eagerly embracing the concept as an alternative to the big-box retailers and large chains which used to be their mainstay.
Those who wish to launch a pop-up may be finding commercial landlords a little more willing to offer space to pop-ups rather than waiting for another major retailer to come along. “Landlords realize that we don’t have the time to sit back and wait for the next big retailer to come along and take the spot,” said Brooks. “They need to be taking a more pragmatic approach, maybe with chopping up stores and making smaller spaces, making them more affordable. It’s a great move for the pop-up industry.”
But pop-up entrepreneurs need more than a product and a space – Brooks offers seven “secrets of success” for pop-ups. “It’s about location, location, location,” he says. “Whether in a shopping mall or on a high street, location is key. Understanding your consumer and understanding the demographic of the consumer of your product is vitally important. Amazing customer service is important. Making sure your business’s financial model works.” Brooks also stresses the importance of marketing in pop-ups, a vitally important factor especially for a store which may exist, by design, for only a few months. “Social media – getting the message out, because you’re only there for a short period of time. You have to be aggressive in your marketing, and create that awareness.”
Another key to success, according to Brooks, is “motivation of the people around you. To understand what success looks like. In business generally, I don’t think people ever define what success is going to look like. What will success mean to you? Is it sales? Number of people? Is it collecting data? Be focused on, and understand what it looks like.”
In the retail market, amidst claims of apocalypse, there is opportunity for growth in the pop-up concept. What’s more important is that while established retailers are looking at pop-ups as an added channel, the market is ready for smaller independent players as well.
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