What is the Marketing Model of Pop-up Shops? What Makes Them Different from Ordinary Shops?

Christine Tsui Fashion Community

What is the Marketing Model of Pop-up Shops? What Makes Them Different from Ordinary Shops?

Yuchun-Shanghai-Marketing, etc. @ Wechat: xuyuchun233

Hi everyone, this is Yuchun (Emma). Graduated from the University of Edinburgh as a MA Marketing student, I am currently engaged in retail marketing for light luxury brands. With over a year of marketing internship experience, I already have a certain understanding of the fashion industry. I used to share articles–“How to find a suitable job in the fashion industry?” and “What is Dark & Avant-garde Design? What is their marketing model? ” in Christine Tsui Fashion Community.

 

FOREWORD

In recent years, pop-up shop, which is popular in internet communications industry, has been sought after by the mass as a unique business model. In the fashion industry, some luxury brands have also begun to promote themselves and increase sales through pop-up shops, such as Chanel Game Hall, YSL Beauty Hotel, etc. So what is the difference between pop-up shops and ordinary shops? How to manage a pop-up shop successfully? And how to judge the quality of a pop-up shop?

What is a Pop-up Shop?

The first pop-up  shop was established in New York in 1999 to clear inventory. Its initial definition was “to do sales or brand promotion in a short time and a certain space, while creating a pleasant and comfortable experience for customers through a suitable atmosphere.” In recent years, more and more brands are selling their products through pop-up shops’ specific environments, interactions, and brand stories. For example, the purpose of YSL Beauty Hotel was to promote its new skin-care products and at the same time, it was also the brand director’s trail to enhance people’s brand awareness and accumulate potential customers. The types of pop-up shops can be categorized as sales, brand promotion or market test. For example, when launching a new product, a brand can use a pop-up shop as an exposure and experiment.

We can also simply interpret pop-up shop as “context marketing in a short term”;”short term and limited time” is its main feature. This method is more commonly used in the communication and Internet industries– because most of these industries are selling virtual products online, pop-up stores can enhance customers’ understanding of products and brands. Although millennials now rely on social media and the virtual world, offline experience is still indispensable. Experience is the most important element provided by the pop-up shop. Compared with traditional stores, pop-up shops can create time-limited topics through novel layout and designs. There is a big potential for creation, and forms are more diversified than traditional shops. Pop-up shop has a short opening time, wide movement, and small location restrictions, and at the same time, it is more topical. This topicality is often manifested through creative store designs, supreme experiences and themes. While this is different from traditional shops, it would not result in the disappearance of traditional shops, which is still due to the fact that customers need experience. The popularity of pop-up shop is actually because many people will come the store to experience it as they are attracted to a limited time, a specific theme or concept. On the other hand, pop-up shop has a strong moldability –breaking through some limitations of time and space, its forms are more diverse.

Therefore, many brands have tried pop-up stores, not only emerging streetwear brands, but also traditional and famous brands. For example, YSL created a theme pop-up shop – YSL Beauty Hotel, to launch new products and promote brand concepts. In addition, there are pop-up shops for menswear like Eye / LOEWE / Nature, FENTY pop-up shop (London) from the collaboration of Rihanna and LVMH group, Hermès pop-up station event (Harajuku, Tokyo), MIU MIU pop-up shop (Head office in Hankyu, Japan), and other pop-up shops of FENDI, LV, DIOR, VALENTINO, COACH, PUMA x SUE TSAI | VOLER, KENZO, etc. These pop-up shops are not only for sales, but also a internalization and promotion of the artistic atmosphere and brand concept. For example, HUNTER’s pop-up shop is in the form of a rain box. Through these new and unique forms, consumers can experience new products, which is fresh and fun. This is also in line with the consuming tastes of most millennials: fun, novel, nice environment, and can be photographed or posted on social media.

How to Create a Good Atmosphere for Pop-up Shop?

What aspects of time and space (environment) should a good fashion pop-up shop consider? A pop-up shop is a time-limited store with a short term and non-fixed location. It is in a variety of forms, like a shop in a business district or a mall. But sometimes pop-up shops can catch attention with its unusual location, such as a booth casually set up on the roadside, or even abandoned factories, trucks, and containers. These pop-up shops are generally open from days to months. As a brand, apart from understanding the flow of people, transportation and climate, it should also abide by the basic rules of time and space.

Nowadays, millennials, whose spending power is rising,will also be the core customers of the future fashion industry. Millennials generally prefer something visually stunning, novel and fun. Therefore, some novel and visually impactful installations can be set in terms of ambience. For example, YSL Beauty Hotel set up beds and bathtubs to echo the theme of this pop-up store, attracting customers to take photos and tag it on social media. This has taken advantage of the characteristics of young people who like to take pictures and post them on social media, which has also led to a second exposure that the brand expects. In addition, this generation hopes that every one of them is independent and unique in the crowd—they often have a mindset of “wanting to be different from others” or “being able to represent their own preferences or life pursuits.” In marketing, there is a theory that customers will consider the brand image and personal image when selecting brands and products– Are their preferences compatible? Do the installations in those stores reflect their personality? Therefore, it is still necessary to concentrate on attracting consumers through novel displays and products, together with the feature of limited time and amount.

Meanwhile, there is another aspect– environmental co-creation. For example, in the YSL Beauty Hotel pop-up store, a customized water curtain wall was implemented. When you tell the staff your name and requirements, your name would be displayed on the water screen. It was a very “sophisticated” installation, whose original intention was that you can try the brand ’s new “all hours” foundation and then stand under the water curtain to prove that it is waterproof. However, in addition to a good promotion of their own products, this kind of personalized customization has also aroused the curiosity of customers. Through customer’s follow-up photos on various media platforms such as Weibo and Wechat Moments, the secondary promotion of the brand has also been realized. This is also an excellent case of creating value for customers, which manifests the creation of the features (characteristics) for the pop-up store space, indirectly strengthens brand features (brand characteristics and differentiation), and further focuses on the target population. The existence of pop-up shop is more about allowing different brands to strengthen their brand genes, culture, features, and differences. However, while strengthening the loyalty of existing targeted customers, this deep rendering and focusing of brand gene will also weaken the marginal customers. For example, the theme color selected by YSL event was black and gold. Most customers may find black and gold cool and are consistent with their personality. However, this prominent theme was undeniably also weakening the twice- consuming of customers who do not necessarily like black and gold. This trade-off depends on which customer group the event itself wants to attract. It is difficult for every event to satisfy everyone. Usually, the customer who can bring the most profit is the priority. In terms the attributes of the space, in the past few years, brands taking the rout of mass line were more tolerant and designed towards the public in hope of a high sales volume. Therefore, the overall space was neutral and the visual theme was weakened. However, under the guidance of long-term subdivided consumption, consumers have become accustomed to the thematic environment. The emergence and popularity of pop-up shop also proves this. A pop-up shop itself has its targeted groups—it will create an atmosphere accordingly and be more professional. This kind of pertinence can be manifested through data collection, which will be guidance to the brand’s future development.

However, if pop-up shop only includes books, consumers will find it boring. In the pop-up shop, how to create a targeted atmosphere that can reflect the brand concept and meet the taste of users? At present, it mainly starts from online and offline channels. WeChat mini programs, games, novel sliding interfaces, and audio guides are all ways of online marketing. Online marketing is a very important means of obtaining information. Introduction of time and place as well as the brief content is usually realized by official and unofficial channels. The brand’s official WeChat account, Weibo, exposure from some magazines, and shooting of celebrities can all get the attention of the customer groups that the brand wants to attract. Non-official channels are mainly word of mouth. Reputation, which is very important for a pop-up store, is a crucial factor for customers to decide if it is worth going. Some content marketing software such as Red can also provide customers with photography and dress code suggestions. Online warm-up can be a main channel to create topics and attract users to build momentum for a pop-up shop; in this process, celebrities will be invited for KOL, and then online traffic will be directed. Some brands will accurately launch pop-up ads on WeChat based on the user ’s city or preference, and then use hashtags on Weibo to promote the development of topics.

On the other hand, offline marketing mainly applies visually impactful layout to the environment, so as to attract customers to take pictures, which is beneficial to secondary promotion. At the same time, to consolidate the customer base, the layout should be consistent with the brand image and the personal image of the target customers. In addition, furnishing through five senses can also provide customers with a more immersive experience. Offline technology can also be combined with online technology. For example, in the pop-up shop, customers can scan the QR code to listen to voice notes. Many pop-up shops also cooperate with Tiktok or have their own selfie wallpaper. A lot of pop-up shops set up stories, such as the perfume Mon Paris. Consumers can spray this perfume in the room to get correspondent feelings in an environment. Similar to this, MINICOOPER once set a rustic scent in its pop-up store, all of which are internalizing the brand atmosphere through audiovisual and tactile senses.

The Market and Input-Output of Pop-up Shop

Are first and second-tier cities the only market for pop-up Shops? Is the resource base of third and fourth-tier cities insufficient to support pop-up shops? The setting of a pop-up shop is more about cost and crowd acceptance. In China, the consumption capacity of third- and fourth-tier cities is much higher than we imagine, and their sensitivity to media and information is not any inferior to that of first and second-tier cities. In addition, their capacity to purchase with ready money might be stronger. Sometimes the first-tier market is just a window to display to the national market. The real profits may come from the third or fourth-tier regions. Perhaps for some brands, there may be concerns about brand acceptance in third and fourth-tier cities, but in fact, the original purpose of a pop-up shop is to allow brands to communicate and sell better. In fact, some brands do not have to be avant-garde, but instead, need to build a pioneering attitude. For brands, as long as they find out the right products and position, there are many opportunities for pop-up shops in third and fourth-tier cities, due to the rising purchasing power of customers. In order for brands to build successful pop-up shops in these cities, they need to find a large number of targeted audiences for broad exposure and mold the pop-up shop with a pioneering attitude, so as to attract such consumers to experience it at the shop, rather than being scared of third- and fourth-tier cities.

One of the ways for the brand to make improvements lies in measuring and judging customer experience in pop-up stores. How to obtain this data? Most brands set their goals before establishing pop-up stores, so surveys can be set based on these aspects to provide options to experiencers. You can also conduct random interviews on the spot; set up simple and easy-to-answer small surveys on platforms such as Wenjuanxing–a platform providing functions of questionnaires. Nowadays we have mini programs on mobile phone, so people who come to the shops can evaluate the experience in the mini programs. Through this kind of survey, find out what the brand’s pop-up shop can bring to customers. Does it enhance desire for consumption? Or does it increase brand loyalty? Through questionnaires for targeted groups, more targeted answers will be obtained. If this event can bring the brand a lot of sales, exposure or more fans, the initial publicity and the experience on the scene (attraction to new followers) will determine the subsequent sales. Customer experience is directly related to sales volume. Certainly, the revenue of pop-up shops is not only indicated by sales. Pop-up activities are usually coordinated by the market, product planning, and retail departments. For the marketing department, if the event can receive a lot of exposure, it will be easier to get the budget for similar events next time.

How to judge whether the surge of sales data brought about by pop-up stores on social media is reliable? First of all, the sales volume still depends on the preparation and promotion of the early stage. Then, on the basis of all expenditure costs, look at the sales data. It is usually impossible for small brands to expect a large sales volume with an ordinary pop-up shop. If the pop-up event can bring a significant increase in sales for the brand, and during this period, the brand has not made a big move, then it can basically be attributed to the pop-up shop. At the same time, the benefits of pop-up shops can also be reflected by the brand’s second exposure on social media. A pop-up shop can make an impression on many people who are unfamiliar with the pop-up shop or do not know about the brand. This also manifests the main value of current pop-up shop for a brand.

 

 


[1]. Davis, A. et al. (2015) Exploring pop-up libraries in practice. The Australian Library Journal, 64(2), pp.1–11.

[2]. Lim, H. et al., (2018) Generating Branding Buzz on Social Media for a Pop-up Store: Focused on Brand Experience, pp.ProQuest Dissertations and Theses.

 

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