Why Pop-Up Stores Are Popping Up Everywhere

We see them all the time in malls and on city streets, especially during a recession -- stores that open up amid a flurry of fanfare and then a few weeks later, they're gone. Fortunately, they are part of a deliberate retail strategy, not casualties of the sluggish economy. Welcome to the concept of the pop-up store.

Pop-up stores are retail spaces -- usually in the form of a kiosk or temporary tenant in an empty building -- designed to operate for only a matter of days, weeks or months. They can be especially appealing for a business owner who wants to take advantage of increased foot traffic in certain locations during, say, the holiday shopping season, but does not want to commit to a lease and overhead costs throughout the year.

Pop-ups are not part of a new trend, but they are growing in popularity (sorry, we couldn't help ourselves), partly due to the economy. "Currently, over 12 percent of the retail storefronts are vacant," says Christina Norsig, founder of PopUpInsider.com, a matchmaker between landlords and entrepreneurs that want to open a pop-up store. Being able to fill those vacancies, even for a limited period of time, are increasingly appealing to landlords, she adds.

"Pop-up stores have a long history, beginning probably 100 years ago with trunk sales," says Eugene Fram, emeritus professor of marketing from Rochester Institute of Technology. "These were usually traveling apparel retailers who moved merchandise from city to city in trunks, offering unusual merchandise at low prices and displaying their wares in hotel display rooms. After World War II, many discount chains got started when New England manufacturers set up pop-up stores to sell excess merchandise. About 20 years ago, some smaller specialized food stores began to take vacant mall spaces to sell merchandise for short periods of time. At the same time, some manufacturers, like Kodak, also established limited-time demonstration stores."

Norsig discovered the allure of pop-up stores around 2003, after her daughter was born. She wanted to stay in retail while caring for her daughter around the clock, but didn't want the hassle and headache that comes with a brick-and-mortar store. So she started her online business, eTableTop, which sells dinnerware, drinkware and flatware and caters primarily to the bridal market. "I thought a store was an outdated concept," she says. "At the same time, I couldn't exist solely on the Internet. I needed a way to meet new customers."

Pop-up stores, Norsig discovered, were a way to have the best of both worlds -- run a bridal store during months when brides are typically thinking about weddings, then shift her resources online during the off-season. Her first pop-up store was in an old delicatessen waiting for a new tenant.

"It was a kooky space, but I wanted to make revenue and meet people -- and I did," says Norsig, who went on to have seven more pop-up stores. As a result, she realized what the retail world needed was a website like hers, which matches temporary tenants with landlords. (PopUpInsider makes its income through landlords, while the service is free for retailers looking to set up a pop-up store.)

Norsig launched the website last year because, "2009 was not a good retail year. I had more time to think about a business like this. I also started to get phone calls from landlords asking if I wanted to do a pop-up store, and manufacturers saying, 'If you do a pop-up store, can we take space with you?'"

There are many reasons for a small business to employ a pop-up store strategy, says Jim Joseph, president of Lippe Taylor, a firm that specializes in brand building, and author of The Experience Effect. "Pop-up stores can allow a brand to experiment and test, as well as get increment sales during peak shopping windows," Joseph says, adding that they can also generate media buzz.

That's something Alissa White has discovered. White is the founder of Matcha Source, a Los Angeles-based website that sells an antioxidant-rich tea. But recently, she has also sold from the confines of a pop-up store.

Early in 2010, White was in New York, visiting friends and planning on flying out to see her boyfriend in Copenhagen. Her flight was postponed due to the volcanic eruption in Iceland, and while laying low for a week in the Big Apple, she had lunch with her website's graphic designer, who casually mentioned he was thinking about opening up a pop-up store. That got White thinking, and suddenly she was calling a well-networked friend in New York to see if he knew of any vacant spaces that might work.

White opened her own pop-up store in New York in June. She was trying to land additional sales, meet with customers, make new ones and learn more about them. She also hoped to create a little buzz for her product.

She and her younger brother, Benji, mostly ran the place, although White did hire a barista and a pastry chef to also help out. She got a lot of walk-in traffic, including actress Claire Danes. "She was so cute," White says. "She walked in and said, 'Somebody told me I had to get green tea.'"

Setting up the store was a bit rushed -- the day before opening, White was still making purchases and putting together what would be in the store. For instance, she realized she needed a sandwich board for the sidewalk to tell customers what the specials were. She wanted something for people to sit down on, and managed to secure an old bench and cover it with tiles to make it look artistic.

"I tried to buy things that were expensive but had a high resale value," White says. "When I leave, I want to walk away with nothing. For instance, I bought some shelves I can resell on Craigslist, and high-end water filtering systems, which I felt was important."

White says she got rent "for a steal" (in the low four figures, which is a steal in New York), but since she did have to hire people, White didn't make much of a profit. However, it proved to be a worthwhile marketing effort, albeit an expensive one.

And that ability to experiment can be the appeal behind a pop-up store. While Norsig says plenty of giant corporations, like Target, have opened their own pop-up stores, it can be a valuable education for a smaller, lean-budgeted startup.

"I wouldn't want to be married to a space for 10 years," White says. "But to be face to face with customers and part of the street life of Manhattan, and to meet all my neighbors, it's so much fun. I could see doing this again, in another city, and taking this show on the road."

Geoff Williams is a frequent contributor to AOL Small Business. He is also the co-author of the book Living Well with Bad Credit and the author of C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America.