The Power Of The Pop – Up

Cara Imbrailo, Partner (Real Estate) and Ilona Bateson, Associate (Commercial) from law firm Charles Russell Speechlys, discuss the benefits and pitfalls of brands selling via pop-up shops…

There can be no doubt that the rise of e-commerce has fundamentally altered the way that we shop. But whilst much is said about the decline of bricks and mortar retail, a physical store offers brands benefits which online retail alone can’t deliver. This includes driving awareness of a brand’s identity by providing the opportunity for customers to interact with it in-person.

Against this backdrop, pop-up shops and experiences are proving to be increasingly popular, both with up-and-coming brands, as well as with established retailers looking to offer customers something different. 

Pop-up shops are temporary retail spaces which are typically leased to retailers on short-term agreements, ranging from a few days up to a year. Retailers often pay a low or turnover linked rent and have limited rights to make alterations to the space. It is also typical for longer pop-up leases to include break clauses, allowing the landlord and/or the tenant to terminate early. 

From a landlord’s perspective, in addition to generating rental income, pop-ups generate buzz. This is particularly valuable for landlords of larger estates, where other stores will benefit from increased footfall. A pop-up can also be a useful way to test drive a brand’s performance in a particular location which, if successful, can be converted into a more formal longer-term lease.  

A pop-up “experience”, on the other hand, might not necessitate a full lease, but may instead be “popped up” in an existing store, with the arrangement documented via a simpler licence or commercial agreement. The Corner Shop is a permanent pop-up space within Selfridges’ Oxford Street location and has hosted a revolving line-up of brands and collaborations from SKIMS swimwear to a Barbie Dreamhouse. This approach works particularly well for seasonal products or as a way to diversify a store’s offering, for example, clothing retailers often host food and beverage pop-ups within their stores to keep customers shopping for longer. 

Benefits for brands?

Today, a retailers’ “brand” is its most valuable asset, and the pop-up enables that to be marketed in a targeted way. Pop-ups create an elevated retail experience, with brands often curating unique and dynamic spaces that incorporate technology, music and décor in a more immersive way than traditional stores.  

For an up-and-coming or e-commerce-only brand, a pop-up shop offers a flexible and low-risk way to reach a wider audience. New products can be easily road-tested and the overheads are far lower than with traditional retail leases. 

The fact that many pop-ups trade for a limited period can fuel a sense of urgency and drive social media engagement. They provide the perfect content capture opportunity for brands, without the need for a separate costly photo shoot. 

Brands with established stores are also embracing pop-ups to build excitement around collaborations, capsules and limited-edition products. Gucci marked its 100th birthday with ‘Gucci Circolo Shoreditch’, a multi-sensory pop-up featuring a music lounge, bookstore and café alongside products.

Pop-ups also offer opportunities for customer data collection. Brands will need the consent of their customers to send them direct promotional marketing, but a pop-up offers the perfect opportunity for brands to connect with its devotees and increase loyalty scheme sign-ups.

Pop-up pitfalls 

When running pop-ups, brands need to be careful that the temporary store or experience does not have unintended consequences. 

Brands should:

• Be careful not to let costs escalate. Pop-ups can necessitate a huge amount of time, effort and money for potentially a very short period;
• Be mindful of the environment, particularly if promoting a green image. Temporary shop fit outs are fairly unsustainable, so where possible, material should be re-used or recycled;
• Be aware that a short term lease may not offer the same scope to make alterations to the space as would be possible for a long-term tenant and the landlord is likely to require any alterations to be reinstated at the end of the agreement, with any damage to the property repaired; 
• Before opening, ensure that any additional consents and permissions have been obtained, for example, planning permission may be needed for signage (even if it is temporary) and a licence may be needed to serve alcohol;
• Be clear on its insurance obligations under the pop-up arrangement – a landlord will usually require the tenant to maintain adequate third party and public liability cover; and
• Be careful that any collaboration fits with the brand’s identity. If a brand is “hosting” a pop-up, control should be retained over the pop-up’s performance and the agreement should enable a quick and easy exit.

However, if brands can navigate these challenges, it is clear that pop-ups are a powerful tool for brands to stand out and to compete to keep the attention of the ever-sophisticated consumer. 

Authors: Cara Imbrailo & Ilona Bateson