Ten years ago, the term pop-up shop was another word for trunk show, but now it seems like the solution or strategy for many new and old retailers. As brick-and-mortar continues to lose traffic to online many brands, even online retailers, and celebrities alike have turned to pop-up shops in locations as varied as shopping centers, trendy neighborhoods and popular shopping districts to provide a showroom, showcase the latest products, test merchandise and downsize store locations.
Retailers online presence focuses on the algorithms and data gathering that influence a purchase, while a brick-and-mortar presence enables them to engage with their customers face-to-face and allow the consumer to touch and feel the merchandise.
The pop-up concept is certainly attractive as it can be at a location for a short-term, cost less to rent, manage and build and test a market before a brand opens a full-fledged store and signs a long-term lease. Enclosed malls have been doing pop-up stores to some extent for quite some time and the concept is certainly more prevalent now that many centers are suffering from vacancies from anchor and long-time mall staples.
But what does all of this mean for traditional retail. Well, for one it creates an incredible opportunity for specialty leasing agents to bring in some steady revenue although in multiple short-term stints. Two it creates a great opportunity for online brands to get their feet wet in the traditional retail world and finally it adds to the overall journey of discovery every consumer yearns for in this Experience Economy.
Even brands like JCPenney utilized the pop-up store or store-within-store concept to revolutionize the store layout and make it easier for customers to find the brands they liked and for brands to have their own space to create a unique experience. In my opinion, it was a huge turning point for the brand - if it weren't for them dropping their signature coupons and discounting program for the length of time they did ... they would have been in a much better place than they are now.
One opportunity that seems to be still left untapped within the pop-up space is for anchor stores like Macy's and JCPenney to utilize a part of their parking lots to create their own outdoor experience center where they lease their space to brands either wanting to come into their stores or ones that are already there. Yes, it will eat-up some valuable parking space, but if that space is generating income and providing an experience I think it’s certainly worth testing. Not to mention the fact that we have transportation options like Uber and Lyftfor cities that don't have the most efficient public transportation, but for the ones that do - how much non-revenue generating space do you need anyway?
With the continued emergence of the experience economy and the growth of e-commerce, mobile and even AR/VR/MR as a viable secondary retail channel, it is clear that the pop-up phenomenon is not going anywhere anytime soon.
Toys “R” Us once the warehouse of toys and the retailer of choice for many Americans boys and girls is now finding it hard to adjust to a digital native child and parent.
But in my opinion, all is not lost for this once popular retailer that once was the go-to for parents looking to put a smile on their kids face. At the end of the day, this shopping center for toys fell into the same trap most shopping centers fell into - lack of a unique experience, mediocre customer service and competition from the shopping center killer Amazon.
Just like any of today’s successful retailers, creating an experience in the stores and focusing on customer experience will increase sales and traffic to this once iconic toy store. But what do we do about Amazon? Focus on what Amazon can’t do - provide that in-person human interaction with stellar customer service, create avenues for kids to play with toys that they must bring home to continue the fun, and create opportunities for experience and discovery that tie into an online experience.
And we did mention that this new customer is in a large part digital native so leveraging the many avenues to engage with these customers is paramount to a successful retailer in this new experience economy. The many types of technology that are available today make it easy to engage with consumers, collect data and gain strategic insights that will help further engage with the consumer and convert each visit into a purchase and each customer interaction to a return visit. Keep in mind we visit Yoni’s Coffee shop every day because Yoni knows what kind of coffee I like and what my kids are doing in school – it’s a plus if Yoni has a selection of the best coffee in the world.
Understanding the customer with the use of data collected throughout the customer journey is essential to running a successful retail business but in the case of Toys “R” Us it also provides an opportunity to brands interested in finding out what their ideal consumer is interested in. The Walt Disney Company for instance, has started doing kid-centric focus groups where they meet with small groups of preschoolers and kindergartners to get their opinion on episodes in development for a series. This same model could prove to be a new revenue generator for a retailer like Toys “R” Us with a built-in audience of kids.
Now what about the many opportunities technologies like AI offers today’s modern-day retailer? An AI enabled Geoffrey the Giraffe in stores greeting guests or an online customer service chatbot named Geoffrey who can answer all the questions you have about a certain product?
What Amazon has managed to do in its rise to retail domination is; Accept occasional failure as the price of innovating, Work every day like it’s your first day in business and Give customers what they want before they know they want it ... pretty simple operating principles that can be applied to the Toys “R” Us business.