Pop-Ups Are Cost Efficient for Your Brand, Compared to Traditional Brick and Mortar

September 13, 2018 -
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Yes, we’re big fans of pop-ups — for what are increasingly a million reasons — but our favorite one? It’s more cost efficient for your brand, especially compared to a traditional brick and mortar store. Whether you want to test out a new product, move some inventory, or just create general buzz, pop-ups (temporary stores that showcase a brand anywhere from one to 120 days,) provide a simple and low-cost avenue for each priority.

Offline shopping still makes up more than 90 percent of all sales in the US, but with the “retail apocalypse” continuing to steamroll through the country, leaving at least 94 million square feet available since May of this year, it’s clear retail is moving in another direction.

“The landscape is changing rapidly when it comes to where to have stores and what kind of stores,” Philippe Pinatel, president and chief operating officer for Birchbox, said to Digiday. “In this context, pop-ups and short-term leases are an interesting way to test different types of experiences and meet our community without creating an exposure to an asset that could turn out to be risky.”

An attractive aspect to the pop-up format is the ability to limit risk. “A new venture’s financial risk is directly related to how much it has to sell before it becomes profitable, often referred to as its ‘breakeven point,’” says Dr. Franz T. Lohrke at Stamford University. “Pop-ups lower a new venture’s fixed costs because expenses like rent can be lower, and, as a result, they lower the risk of a new venture falling.” For a startup, deploying capital into an aggressive store expansion probably isn’t the best way to allocate resources, so a major incentive becomes the flexibility that comes with not having a 10-year lease or worrying about credit, especially when rent in places like New York City have increased, forcing retailers to get creative. The pop-up format is smaller, quicker, more cost-effective, and most importantly, connected to the consumer, who drives the content.

They can create spaces for consumers to interact with their product and their brand at a fraction of the cost of a permanent brick and mortar location — around 80% to be exact. According to Storefront, an online marketplace for renting short term retail space for pop-up shops, showrooms and galleries, the average cost of opening a pop-up using their services is $2,000, as compared to $98,000 for a traditional brick and mortar store. Set up time is also quicker, and sales per square foot increase by almost three times.

It’s time to tear down the walls of traditional retail and pop-up into the future — and you don’t ever have to do it on your own, we’re here to help you get there.

“Pop-up shops provide a way for entrepreneurs to test-market an idea without investing a lot of money into a business,” says Lohrke.  “These shops are low-cost, portable, and provide a way to gather valuable information directly from customers to improve a product.” Another important point that Lohrke makes is that having lower operating costs means a brand can reduce prices relative to those in a brick and mortar location, making the business more competitive.