Upmarket pop-up shops give sagging consumer culture a lift
May 5, 2009
By Matt Cowan and Mark Potter
Shops happen. Like viral online ad campaigns, temporary big brand outlets are sneaking up on European streets, filling vacancies opened by the credit crunch and building a buzz that is relatively cheap.
One example is tucked away on a side street in the shell of a railway arch. Only open from Thursday to Sunday, the Nike store in Shoreditch, east London, was originally planned just for the duration of last year's Olympic Games.
Now the sports goods giant says the secretive format, selling high-end ranges and occasional exclusives, has proved such a hit that it's staying.
"If you find it, it's like a cool thing," says store manager Nehjat Ramoth. "It's to help the brand, but also to keep the exclusivity of certain products.
"We had people who queued last week for one shoe from 10 o'clock the night before."
Experimental stores
Retailers and designers experimenting with pop-up shops are also re-energising bricks-and-mortar shopping, adding variety to an experience that globalisation has tended to dull.
Nike's 1948 store has attracted a cult following by creating a running club and offering dance lessons to the community, as well as an alternative to replica store fronts.
"It is just a different experience, you are not bombarded, you are not bumped into," says Marc Harris, a sports marketer who pops in to try on a top.
Paola Comini, the owner of a store in Milan's trendy Brera district, has lined up a series of short-term tenants including condom maker Durex and a seller of Paris Hilton watches.
"The store is rented out for practically all of (the northern) autumn and winter. I am already getting requests for next year," he says.
Temporary shops were once the preserve of opportunistic market traders or firms looking to shift old stock, but mainstream and upmarket brands find them a fairly cheap way to create a buzz about a new range, or test a new concept.
The economic downturn is making landlords more willing to agree to short-term leases to fill empty shops.
"Without committing yourself you can do something really interesting, very innovative and do it really quickly," says Moira Benigson, a retail specialist at MBS Executive Search Agency.
"You can experiment."
Market research firm Experian estimates that more than one in seven UK retail sites, or 135 000 outlets, will be unoccupied by the end of this year as the recession bites.
"Landlords will be happier to fill stores with exciting retailers that create a buzz, for however short a period, rather than leave their stores empty," says Jon Wright at market research firm Euromonitor International.
Trendwatching.com is a website that traces the surge in upmarket pop-up shops to 2003, when US designer outlet Vacant opened in empty stores for a month at a time in New York, London, Paris and Berlin.
Shortly after, avant garde Japanese designer Comme des Garcons launched its first Guerrilla store in Berlin for one year only. It has since opened, and then closed, in cities including Reykjavik, Los Angeles, Singapore and Beirut, with its latest opening in November in Glasgow.
US brands have picked up on the trend, including internet auction site eBay, which challenged interior designers to furnish a New York penthouse using items bought only on its website, while retailer Target set up a floating temporary store on the Hudson River.
Europe catches on
Now Europeans are getting involved. In March skincare brand Nivea took up temporary residence on Munich's chic Maximilian Strasse, employing make-up artists and a photographer to pamper passers-by, while shoe designer Rupert Sanderson recently opened a pop-up shop to showcase his latest collection in Paris.
For retailers facing growing competition online, it's a help.
"A retailer cannot be static today. You can't just stand in the shop and wait behind the counter," says Philip Start, the owner of London's Start clothing boutique, which has handed over part of its store to designer brand Mother of Pearl and plans to run more temporary "shop-in-shops".
Upmarket pop-up shops may work in affluent urban areas, but Jonathan de Mello, the director of retail consultancy at Experian, says they are not a solution for the industry as a whole, which faces a steep slump in consumer spending.
"Empty shops tend to be in the worst locations. They're vacant for a reason," he says.
Once economies recover, he says, property firms will push to sign longer-term leases again: "A landlord will always want security of income."
But some property firms are interested in the broader benefits that innovation can bring.
"For us it's not about the rents," says Helen Franks, the London retail leasing director at Grosvenor.
"The life span of our pop-ups ranges between one week and two months. The rental income is negligible. It's more about the publicity and vibrancy that it generates for a particular area or street." - Reuters
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