Vend CEO Vaughan Rowsell presents seven tips for pop-up success.
Flexible, disruptive, and creative pop-up stores are rising in popularity in Australia as brands and small businesses try new products, test new markets and launch fun campaigns.
Since the first pop-up stores opened in Australia 15 years ago this is a trend gaining momentum and cloud-based software is enabling this change as businesses, once they’ve confirmed a short-term lease, can start trading with an ipad.
The economic downturn and competition from overseas and online retailers has shaken up Australia’s traditional bricks and mortar retail.
High rents and low footfall have been driving many retailers to the Internet, but pop-up shops are countering this. The advantage of pop-up stores is they provide the chance to test small batches of products and see how they scale.
Everywhere we look now there are pop-ups – in the walkways of Westfield shopping centres, outside Bunnings and Masters on weekends, at major events, festival and special attractions and even inside flagship retailers like Myer which have opened a range of pop-ups in Melbourne’s Burke Street store with brands like Pandora and Swarovski taking spaces.
Even in Melbourne’s Southern Cross station and Sydney's Bondi Junction pop-ups are thriving selling last-minute small items.
If you’re thinking of opening a pop-up store or if you already have one and are looking for ways to lower costs and maximise your profits, below are some handy tips you may want to consider:
1. Determine the most cost-effective type of pop-up
There are several pop-up formats available. Consider your budget, the amount of merchandise you’re selling and the experience you want your customers to have, then go with the option that gives you a healthy balance between the three. Formats include:
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Retail store - moving in to a vacant store space
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Shopping centre – setting up surrounded by other retailers
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Booth – launching a pop-up store at events like fairs, festivals and special attractions
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Store space – taking advantage of space within an existing store
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Mobile – using vehicles such as trucks or buses as your store
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Kiosk – setting up a small hut or cubicle-like storefront
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Unique – erecting a completely distinctive store to draw people in
2. Collaborate with other merchants
There is no need to have to venture into the pop-up space alone. If you’re looking to minimise costs, consider partnering up with other merchants. Find retailers that complement your business and see if you can set up shop together.
3. Negotiate with the landlord or management
Don’t sign your rental agreement without haggling. www.findapopupshop .com.au can help you locate available spaces and major shopping centre operators like Westfield have their own sites to search possible locations via http://www.westfieldpopup.com.au/. When negotiating a lease consider the following factors: rent, refundable deposit, utilities, insurance, shop and property maintenance.
4. Be strategic with inventory
How you deal with inventory will depend on the purpose of your pop-up. If you’re doing it to a test new product order small batches first and monitor what to invest in. You can also anticipate stock turn through demand forecasting and by generating velocity reports to monitor how products are moving and to estimate how long stock will last.
5. Go for DIY design
Skip the professional decorator. With a little DIY magic, you can create a store look that you and your customers would love. You can find inspiration on sites like Pinterest. Or you can engage the services of Pop Union who can design and manage the pop-up on your behalf.
6. Use cloud apps to run your store
Choose solutions that are as nimble as your pop-up store. Avoid getting into long-term contracts with vendors or taking on bulky store equipment. The cheapest option and most flexible option are cloud-based apps that can run on PC, tablet or smart phone. Most SaaS solutions offer pricing packages that enable you to only pay for what you need. Additionally, cloud apps can often integrate with other software enabling you to easily extend the functionality of the programs. Vend for instance integrates with apps like Xero, Shopify and Stitch.
7. Track and improve
Be diligent about tracking your sales, stock, traffic, and other store metrics then use the data to find ways to cut costs and be more efficient. Additionally, some landlords factor in a store’s average sales per square foot, so you may also want to keep an eye on this metric if you’re planning to re-negotiate your rental agreement.