If you have been toying with the idea of creating an immersive and intimate one-of-a-kind shopping experience for your customers, the pop-up shop could be a great vehicle for you.
Pop-up shops — sometimes referred to as flash retail stores — can be a fun and profitable way to find new customers, generate interest in your retail offerings, and create a memorable experience for loyal fans of your brand.
This article will cover what you need to know to set up and open your own successful pop-up shop, including how to:
- Establish goals, so you get the most out of your pop-up shop investment
- Build a pop-up store budget
- Choose the perfect location for your flash retail establishment
- Secure your temporary retail space to set up a pop-up shop
- Market your pop-up shop to build buzz, bring in foot traffic, and leverage your success
- Easily manage all the recordkeeping and accounting functions that come with running your own small business.
Define Your Pop-Up Shop Business Goals
There are many good reasons to open up a pop-up shop. For example:
- You may have an eCommerce store and hope to expand to a physical store, offering your customers a multichannel experience.
- You might be testing out locations for a new or existing retail brick and mortar store business.
- You could be launching a new product or service and want to build brand awareness to get social media influencers and other people talking about your products online and among their friends.
- You might be taking advantage of seasonal sales opportunities for new or existing products.
- You may be leveraging the pop-up experience as a creative way to launch a new brand or build an existing brand.
- You may be looking for ways to find new markets to offload excess inventory.
You must define what you hope to achieve with your pop-up presence at the outset. Having a clear idea in mind will help you determine your budget for your pop-up store, where you want your store to be, how you will promote it, and how you will measure your success.
Building Your Pop-Up Store Budget
Like you would with any small business startup, before signing a lease, securing merchandise, or hiring staff, you should build a budget for your pop-up store.
Determining Your Fixed Costs
Whether you will be operating your pop-up for a day, a week, or several months, you need to set a new business budget for your fixed costs, including:
- Rent for your pop-up space
- Security deposit
- Utilities, including electricity, water, and internet
- Liability insurance
- Any required permit fees
Determining Your Operations Costs
In addition, you will have to take into account the cost of setting up and operating your pop-up. You will need to budget for:
- Salaries for employees and contractors (sales manager, sales associates, designers, installers, etc.)
- Point of sale (POS) service and credit card processing fees
- Furniture, fixtures, and displays
- Cleaning and maintenance
- Marketing costs
You will want to employ good small business accounting software when tracking these expenses.
Choosing the Perfect Pop-Up Location
The adage "location, location, location" applies to all retail endeavors, and pop-ups are no exception. Where you choose to open your pop-up will greatly bear on how successful the shop will be.
Where you decide to place your pop-up will depend on the demographics of the customers you are trying to reach, the purpose of your pop-up, and your budget. You might want to look for available space in retail centers or urban shopping locations in your selected city or cities. In some instances, you may be able to procure pop-up shop space inside an established department store. Some people prefer to place their pop-ups in unusual locations like residential neighborhoods, office complexes, or city parks. Music and art festivals and trade shows are additional options for pop-up store locations.
Securing Your Pop-Up Shop Space
If you have a good idea of the location for your shop, you can contact the property owners and managers directly to see if they will accommodate a pop-up shop. You can also contact local commercial real estate agents to see if they know any suitable spaces and landlords that allow pop-ups. Finally, try talking to the managers of existing retail stores that align with — but do not compete with — your business to see if they are open to partnering with your brand to allow a pop-up in their outlet.
Don't be afraid to negotiate rental rates. With the US retail vacancy rate at a seven-year high, you can leverage the fact that there is a surplus of retail space to your financial advantage. Commercial real estate rent is decreasing, and property owners are sitting on vacant storefronts eager to earn an income again. They are willing to negotiate prices on short-term space leases, which is perfect for pop-up shop owners.
You can also check out available pop-up spaces online using websites like:
- Storefront offers opportunities to rent pop-up space in major cities around the world.
- Shopcore offers access to indoor and outdoor space by the day for pop-ups at shopping centers nationwide.
- Appear Here claims to make renting pop-up space around the world as easy as booking a hotel room.
Marketing Your Pop-Up Shop Before, During, and After Operations
Great marketing before your pop-up opens, during operations, and after your pop-up closes is key to achieving your goals.
Launch a Publicity Campaign Before Opening
Once you have established a place, dates, and theme for your pop-up shop, start getting the word out. Here are some pre-launch public relations and publicity tips:
- Let your loyal customer base know the details of your pop-up. Even better, invite them to a VIP event — such as a glitzy launch party — to make them feel special. Exclusivity will help create buzz.
- About a month or so before your pop-up launch, send out press releases and VIP launch invitations to targeted media, bloggers, and social media influencers.
- Announce your upcoming pop-up launch on your business website, social media, and in emails to your customer base. Include hashtags you've created just for the pop-up and encourage everyone on your social media pages and contact list to use them to spread the word.
- Consider advertising on social media sites, relevant industry or trade online publications, and any broadcast media or print publications that make sense for your store and products.
- Find businesses to partner with for cross-promotion opportunities. Often other non-competing retailers will jump on the chance to work with you so you can promote each other's businesses.
- Create and promote a charity event at your pop-up. Think about offering special promotions or give-aways to customers who come to support the cause. You can leverage the nonprofit's contact list to promote the event.
Keep Marketing Strong at Launch and Beyond
Keep the PR momentum going at the launch of your pop-up shop and during its tenure with these best practices:
- Make sure you provide strong public Wifi and publicize access information all over the pop-up store to encourage patrons to share their status and location with friends and on social media.
- Create a fun selfie wall or a unique selfie-attracting display and encourage shoppers to take and share selfies and videos on Instagram, Tik-Tok, Facebook, and other popular social media outlets.
- Hold a VIP-only preview party for influencers, media, and your best customers and make it video-able and share-able by incorporating entertainment or bringing in celebrity guests.
- Publicize and hold giveaways to encourage traffic, especially during non-peak hours.
- Keep your merchandising fresh and the customer experience mood right with appropriate music, signage, and decor.
Turn Your Success Into Post Pop-Up Promotions
Your marketing efforts should not end when your pop-up does. Direct customers to your eCommerce business and keep them primed for your next type of pop-up or online sales event with these practices:
- Collect customer contact information at the POS and follow up with thank you promotions like discount codes for future purchases through your website or next pop-up event.
- Encourage customers to sign up for your newsletter and to visit your website and social media pages.
- Acknowledge customers that review your store and products and put loyal customers on the VIP list for your next exclusive pop-up event.
Measuring Your Pop-Up Business Success
It is important to set up mechanisms to determine how your pop-up store did concerning your goals. Consider tracking the following metrics to help in evaluating your success. By putting mechanisms to track your metrics at the outset, you will be able to draw conclusions that will help inform your next pop-up project.
- Measure foot traffic. Also known as pedestrian activity, foot traffic tells you how well your location performed. Knowing your foot traffic will help you understand how effective your marketing and merchandising were and whether your selected location was suitable. Once you analyze your sales data — your conversion rate (e.g., how many customers entered your store to purchase something). You can purchase inexpensive wireless electronic people counters to place at each entrance of your store to gather this information.
- Measure sales. You can track sales in several ways to help you gauge how well your pop-up store performed. For instance, tracking sales by specific product lets you know what items were hot and which ones were not that desirable. This information might inform how you display items in the future or whether to stock certain items at all. Track sales by date and time to learn what your high traffic times of day are. Understanding your sales performance helps you decide on when to schedule promotions and how to arrange for staffing. As long as your POS system is set up to register these metrics, you should have reliable data to review.
- Measure brand engagement. You can use search engine tools like Google Trends to gauge how your brand name performs online as a search keyword. It's a good idea to measure your brand searches before and after your pop-up store to see if there has been a significant uptick in searches. You can also check out brand mentions and social engagement from influencers and customers by searching for posts.
Run Your Business Like a Pro
A pop-up shop isn't all glam and parties. You are running a small retail sales business, which means you will need to take care of the day-to-day recordkeeping and accounting. You will have to:
- Purchase or manufacture items to sell
- Manage retail inventory
- Calculate the cost of goods sold (COGS), so you can determine gross profit
- Issue sales receipts
- Calculate net sales
- Collect and pay sales taxes
- If you hire employees, calculate payroll taxes
- Manage other tax issues
Skynova Helps You Focus on Your Pop-Up Shop While Still Taking Care of Business
Planning for and then executing on a pop-up shop is a fun and, hopefully, profitable endeavor. Don't let the ho-hum aspects of keeping track of the accounting and business records take up more energy than they have to. We created Skynova's business products to save you time and money. Check them out for yourself. Sign up today to create a free Skynova account.
Notice to the Reader
The content within this article is a general guide and may not apply to your specific situation. Always consult with legal counsel regarding the permits, contracts, and other legal aspects of opening and operating a business. For accounting matters, seek advice from a professional accountant to ensure you're meeting accounting standards.