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What Is a Pop-Up Shop? How a Pop-Up Shop Can Benefit Your Business

Updated: Jun 20



A whopping $2,748 a year -- that's how much the average Canadian household spends on online purchases.


Still, 64% of Canadians say that, if given a choice, they'd purchase from Canadian retailers.

At the same time, research has found that at least 10% of Canadians admit to having "showroomed" in the past. This means that they've gone to an actual store to test out a product prior to purchasing it online.


A pop-up shop can help your e-commerce business meet these varying wants and needs of your local clients.


The big question now is, what is a pop-up shop and how does it work? Why would you even want to consider getting into the small business pop-up market?

We’ll answer all these questions below, so be sure to keep reading!


What Is a Pop-Up Shop? The View From a Buyer’s Perspective


These are short-term retail stores that give consumers a firsthand encounter of products. These shops give them a more "hands-on", tangible, or tactile product experience. They get to see, hear, touch, and most importantly, test the product themselves.


This then relieves them of the possible hassles of having to return or exchange an item.


How About in the Eyes of a Business Owner?


A pop-up store is a temporary store that remains open for as little as a few days to several weeks to a couple of months.


Brands and e-commerce firms set up pop-up stores to drive and funnel sales and spread brand awareness. They use these as a platform for physical interactions and engagements with customers.


Many others use it to test the market for specific products. Some, especially those planning to set up a brick-and-mortar store, use it to test a location.


That said, let’s talk about these benefits in more detail.


The Costs of a Temporary Store vs a Brick and Mortar Shop


In 2017, the total revenues of Canadian non-chain stores amounted to $335 billion. Their total expenses, on the other hand, reached $325 billion.


That represents a $10.7 billion net revenue, as well as a 3.2% pre-tax profit margin.


Not bad, right?


Still, those figures highlight how big the overhead costs are to start even just a single store. After all, opening a brick and mortar shop involves renting a physical space. In Toronto, this means paying an average of $36.91 per square feet of space for a downtown Class A office.


As if that's not enough, vacancy rates keep dropping, further driving rental rates up. In fact, in 2019, vacancy rates in cities like Toronto and Vancouver have sunk below 3%.


On top of these are the costs of utilities, employees, equipment, IT -- the list goes on.


A pop-up store reduces many of these costs associated with traditional stores. As they’re short-term shops, you won’t have to bind yourself to a long-term rental contract. You decide how long you want your store to be open, which then gives you more control over your overhead costs.


Build Hype While Spreading Awareness


It turns out that the scarcer an object is, the greater its perceived value. Moreover, the scarcity of products makes them more attractive and desirable to consumers.


Pop-up shops, with their established end dates, can give your products this attribute. Knowing that your store will disappear at a certain date can then encourage them to visit before it does. This alone already creates hype and a sense of urgency for them to shop before they miss out.


You can also use this time to promote new merchandise or services. Or, if you're a start-up, you can use this to kick start your marketing campaigns.


Engage and Make Connections on a More Personal Level


96% of consumers say that customer service is a key factor in determining brand loyalty. Whereas the core of exceptional customer service practices is seamless communication.


That said, most of us still want to talk to a human customer service agent even with today's technology. In the neighbouring US, for instance, 55% of consumers say they'd rather speak with a human over the phone.


If most of your business dealings happen online, a pop-up shop is a good way to humanise your brand. It gives you the opportunity to get on a more personal level with your customers. It also helps make your clients feel more at ease, knowing that they're dealing with an actual entity.


Your customers can get immediate answers to questions, as they’re speaking with you face to face. They no longer have to wait for hours before they finalise their buying decision.


Since you can provide them with the answers they're looking for, then they can decide right then and there. If you can highlight the greatness of your products, they're likely to take their wallets out. This, in turn, translates to sales and profits on your end.


Obtain Even More Valuable Customer Data


A pop-up store is also a great chance to let your customers speak up about what they think about your brand. You can roll out surveys and questionnaires during this time.


Since you get their answers real-time, you can then apply relevant and doable feedback on the spot. Or, at the very least, incorporate their requests in the following days and future pop-up shops. There may even be some recommendations that you can apply to your website itself.


Also, customers love brands who listen to what they have to say. As such, when your clients see proof that you listen to them, they're likely to favour your brand even more. They may even help you spread the word about your pop-up store by telling their family or friends.


A Way to Test the Waters


A good pop-up store idea for testing purposes is to try out a new product idea for a new target market. A pop-up shop gives you a way to validate and confirm if there's an actual demand for that product. In this way, it's cost-effective, since you don't have to manufacture a huge batch of items.


If there’s a demand for it, great! You can begin to manufacture them in larger volumes.


If there’s too little traction, you can still learn from your experience. You can ask your customers what they don’t like about the product and what they think will make it boom.

 

Aside from product testing, a pop-up shop can also serve as a location tester. This can be especially helpful if you're planning to launch a brick-and-mortar store. You can test the viability of the location you're planning to open a physical shop in.


Boost Sales During the Peak Seasons


A 2019 multi-country study asked respondents about their holiday purchase plans. Including Canadian participants, 62% of consumers said they'd shop both online and offline. 47% of participants also said not knowing what exactly to buy, although they already have a budget.


Take advantage of these shopping behaviours by setting up a holiday pop-up shop. By doing so, you can offload more of your items than you would if you stick to just online sales.


Moreover, you can highlight your customer service skills by helping them shop. You can show off your listening skills and expertise by giving them recommendations. With your assistance, they're more likely to reciprocate by making a purchase on the spot.


Reduce the Load of Old or Existing Inventory


Speaking of holiday sales, a pop-up shop is a great way to unload your existing inventory. This, in turn, creates more space for new products and supplies. So, not only will you have fewer left-over products -- you'll also add to your bottom line!


You can also opt to have some of your pop-up shop products on a made-to-order basis. This can work great for items that already have a solid, established following. Customers can place their orders online and then pick it up at the pop-up store itself.


You may want to give them an incentive to do so though, such as a "loyalty" reward. Make sure that the reward is something tailored to their specific needs and wants though. Don't give them a promotional item that will just end up at the back of a shelf.


Get Your Sales Up With a Pop-Up Shop


There you have it, all the top answers to your question, "what is a pop-up shop?" Now that you know the basics as well as its benefits, you should consider setting up one for your brand.


There's no other better time than now to start planning and plotting your future temp store. Especially if things have been feeling a bit stale with all the remote work you've been doing. Use this as an opportunity to spice things up at work by planning a soon-to-open pop-up store.


Still have questions on how to create and run successful pop-up shops? We can help! Find our contact details here or send us a message about your project goals.

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Promotion Resource Group

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Oakville, Ontario, L6H 6Z7  

905.842.3355 x222

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