Pop-up shops may be temporary, but the retail trend is here to stay
Established brands test out new markets with short-term retail strategy
To drum up excitement around the launch of a credit card targeting the oft-pursued millennial demographic, American Express Canada tapped several star chefs last month to serve Instagram-worthy plates at a restaurant in Toronto that would launch and close within a week.
Before Japanese clothing retailer Uniqlo opened its first Vancouver location this month, it ran a shop with a twist for one day. The location was stocked with flannel shirts, but employees asked Canadians to choose between leaving with a free one or giving it to a newcomer.
Later this month, Google will open a temporary doughnut store in Toronto while promoting its new smart speaker, the Google Home Mini.
The pop-up shop may have started as a way for online retailers to stage a lower-risk experiment with a physical presence, but the temporary storefront has developed into a marketing tool for established brands, often ones that already boast multiple locations.
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"It's definitely a trend," said Tamara Szames, a Canadian retail analyst for apparel and footwear with the NPD Group.
Even Ikea Canada, which operates a dozen stores in this country, has created multiple short-lived shops. In June, the Swedish retailer opened the Ikea Play Café in Toronto where shoppers could sample meatballs, play a giant pinball machine and, of course, shop a small selection of the company's kitchen products.
Pop-up shops backed by big corporations now spring up like whack-a-moles, and Szames thinks it's "a very smart trend."
Companies can change the conversation with consumers and align brand messaging, she said, pointing to struggling department store chain Sears.
In April, Sears hosted a pop-up in a downtown Toronto neighbourhood Vogue identified as the world's second hippest in 2014. The trendy spot intended to woo millennial consumers with Sears's new private label brand as the company attempted to reinvent itself amid sluggish sales.
That experience could change the way a consumer views the company and prompt them to either travel to one of their permanent stores to shop or to their online store, said Szames.
Testing new markets
A temporary location also lets established Canadian companies test new markets in a vast country or international retailers experiment with the Canadian consumer, she said.
Japanese-based Muji, for example, offered a pop-up shop in Vancouver earlier this year and later opened a location at Metropolis at Metrotown in nearby Burnaby.
The method provides additional benefits for big brands whose products are sold in other companies' stores.
Nestlé Canada, for example, hosted a smattering of pop-up shops this past year. In Montreal, people could customize Delissio Rustico margherita pizzas. In Toronto, passersby could sample Haagen-Dazs ice-cream flights and ice-cream cocktails during happy hour. Later in the summer, pedestrians could stop at a makeshift campground and roast s'mores using Aero chocolate.
The practice allows the company to develop an experience for consumers they don't get to interact with in stores, and re-invent a brand for new, younger demographics, said Tracey Cooke, vice-president of communication and marketing excellence at Nestlé.
The company sees a direct positive relation with sales in the vicinity of the pop-up, she said.
She acknowledges the pop-up is not necessarily a novel concept anymore and retail is on the brink of saturation in the marketplace.
"I think everybody is on the pop-up bandwagon," she said.
Still, she doesn't foresee them disappearing any time soon as consumers, especially millennials, respond to experiences. For Nestlé Canada, she said, pop-ups will remain in their playbook.