Date
23 August 2017
Louis Vuitton used the IFC’s Atrium space in Hong Kong to showcase new products. Photo: Savills
Louis Vuitton used the IFC’s Atrium space in Hong Kong to showcase new products. Photo: Savills

How pop-ups became an integral part of retail landscape

Whether for testing the waters of a new market or introducing new products (or services) in an existing one, pop-up stores have become an unexpected lifeline for the retail sector as well as a boon for consumers seeking choice.

Originating in Los Angeles in the late 1990s, pop-up stores — or flash retailing — were originally designed as a cost-effective way to promote little known brands or products. Their immediate success caught the attention of major manufacturers and in recent years, no label was too old or too high-end to open a pop-up under the right circumstances.

In the early days, it was stalwarts such as Levi’s and communications giant AT&T using pop-ups to target younger shoppers; now it has become a global phenomenon.

French designer Louis Vuitton showcased its winter men’s line in its first flash store in Milan. In another case, Hermès sampled the market in an historically significant space in Kyoto, and then took its brand of luxury to customers in Hong Kong’s Causeway Bay area with its mobile pop-up Silk Bar.

The appeal of the pop-up store is evident. For emerging brands and products, pop-ups don’t demand potentially ruinous long-term rental contracts, and they are inherently experimental with less risk.

They allow established brands to target different demographics, and they provide incoming brands with the opportunity to see if their product has any lasting appeal in a new market without significant investment in flagship stores.

Krispy Kreme donuts would no doubt have benefited from a pop-up rather than a series of stores that ultimately didn’t work as well as they did in Seoul. For landlords, particularly in malls, pop-ups cultivate invaluable foot traffic while positioning the property as one that is forward-looking and in touch with current trends. Additionally, they provide another source of rental revenue with little in the way of construction or renovation costs.

Perhaps most critically, pop-ups create strong brand awareness. At this point in time, consumers have become inured to online advertising, and a website alone cannot always attract the vital attention of web shoppers.

In the way online retailing is a complement to physical shops, pop-up stores can help brands connect with new customers and drive them back to online retail portals. Awareness and consumer curiosity are crucial, so crucial that some pop-up retailers don’t do any retailing at all.

Jeweller Tiffany, for instance, acknowledged the 130th anniversary of its signature engagement ring with a pop-up exhibition at the Landmark building in Hong Kong’s Central, where it has a traditional store.

Also in Hong Kong, upmarket luggage manufacturer Tumi and Louis Vuitton have both used the IFC’s Atrium space for pop-up displays recognizing milestones (Tumi’s 40th birthday) and new products (LV’s spring men’s collection).

Tumi’s display may have steered traffic to its IFC shop, but LV may have been sampling the climate for a future store.

Hong Kong Tatler called the LV show “an immersive experience” that highlighted the contrasts between the label’s famed trunks and the Africa-inspired line.

Like Hermès’s Silk Bars, those pop-ups were as much about sales as about sharing each brand’s history of craftsmanship, tradition and design. How well that translates into sales remains to be seen, but for now, pop-ups are an integral part of the retail landscape.

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BN/RC

Kathy Lee is the Director of Research & Consultancy for Hong Kong and Macau of Savills.

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