2019 was truly the year that the pop-up store “popped out.” The reinvention of retail is still in its early phases, but what is happening with the pop-up trend is a near-perfect microcosm of where retail is going in the Age of Experience. Experiential concepts—from eatertainment and eSports to virtual reality concepts—are exploding across the retail scene.
While many view the pop-up movement as being merely about temporary “placeholder” tenants and a reflection of a challenging leasing environment for landlords, we are seeing many of the great innovations in space activation being pioneered in the pop-up arena.
“Pop ups are like the farmers’ markets of retail,” says Leslie Mayer, Executive Managing Director, Retail Services with Cushman & Wakefield in West Los Angeles. “Brands can strategically merchandise and choose their physical locations based on real-time customer data, just like the vendor at a farmers’ market. They can be fluid in their real estate choices given the multitude of well-placed locations to choose from and the acceptance of the pop-up format now by landlords and consumers. They are open just long enough to be novel and generate additional brand loyalty and interest, but aren’t intended to replace larger, more established venues.”
If you want a quick idea who some of the top tenants of tomorrow will be, and how their stores will engage buyers, just look at the pop-up space today.
A twist on the familiar pop-up idea, a pop-in store is a temporary instance in which one concept takes space within an existing retailer’s space. These symbiotic partnerships offer benefits both to the emerging brands that operate the pop-in and to the chains that incorporate them into existing space. Emerging brands benefit from greater exposure and foot traffic while existing retailers get the upside of the buzz (i.e., increased foot traffic and sales) from hot upstarts.
Many of these pop-in locations are experiential by nature and focus on boosting the shopping experience. Some are event-driven (a sporting event or a holiday. the release of a recording, the launch of a new product line). Still, all pop-ups and pop-ins have the same basic goal: to become events in and of themselves.
Department stores are leading the charge when it comes to pop-ins, with nearly every major department store chain in North America currently experimenting with them in one format or another. Los Angeles has been home to a flurry of pop-ins in recent years, including:
- Britney Spears: Spears Zone
- Facebook: The Market @ Macy’s
- Lego Create Your Own Escape
- Nike (Air Jordan): Rivals Café @ Foot Locker
- Sneakertopia @ HHLA
Meanwhile, one of the strongest new categories of pop-ups is the experiential media/entertainment pop-up. This past summer, inspired by Netflix show “Stranger Things,” Baskin Robbins teamed with the production to redesign a location in Burbank, CA as the Scoops Ahoy ice cream parlor from the series. So far, most of these media-driven pop-ups have come from popular television shows and the worlds of film and music. However, we anticipate an immense opportunity far beyond that in the pop-up space. Among some of the more buzzed about media-driven pop-ups in Los Angeles include:
- Breaking Bad: El Camino Café (West Hollywood, CA)
- Beverly Hills, 90210: Peach Pit Pop Up (diner in Los Angeles, CA)
- Fleabag: Hillary’s Café (Los Angeles, CA)
- Hello Kitty (Los Angeles, CA)
- Mean Girls: Fetch (café concept in Santa Monica, CA)
- Pulp Fiction: Big Kahuna Burger (redesigned Fat Sal’s Restaurant in Los Angeles, CA)
- Saved by the Bell: Saved by the Max Café (Los Angeles, CA)
- Stranger Things: Scoops Ahoy (redesigned Baskin Robbins in Burbank, CA)
- Schitt’s Creek: Visit Schitt’s Creek (Los Angeles, CA)
- The Boys (pop-up delicatessen in Los Angeles, CA)
There will always be a hot new media sensation…and when there isn’t, there will always be nostalgia. The marriage of pop-ups and cultural phenomena is incredibly fertile ground for temporary space. Could such space be successfully allocated for temporary users on an uninterrupted basis to drive massive amounts of foot traffic in retail locations?
Hospitality (including hotel, restaurant and bar) popups can take the form of a space user taking formerly vacant space on a temporary basis. But more often than not, they are about short-term collaborations that are mutually beneficial or that may feature temporary re-branding around an event. For example, in August 2019 the V Hotel in Palm Springs partnered with Yum! Brands to rebrand itself for one weekend as the “The Bell – A Taco Bell Hotel & Resort.”
But not all hospitality pop-ups are about food and beverage or hotel users. Footlocker recently launched a pop-up restaurant, “Rivals Café,” at its Hollywood & Highland flagship in Los Angeles to celebrate the launch of its Jordan Rivals line. These collaborations are often extremely beneficial to both brand and partner core tenant. At the same time, hospitality pop-ups usually don’t have a direct impact on underlying real estate vacancy.
Rise of the Permanent Pop-Ups or Retail Marketplaces
In the last few years there have been few retail global growth trends as robust as that of the meteoric rise of the food hall. By the close of 2020, the number of food halls in North America will have quadrupled in just four years. The food hall is ultimately the sharing economy for restaurants. That model of a highly concentrated, small space, short-term, ever-changing lineup of upstart brands is now starting to take on a retail form. This is the permanent pop-up—what we call the Retail Marketplace.
From Pop-up to Permanent
Pop-ups can be a useful “testing ground” for some companies who may later graduate to permanent space. Scum & Villainy Cantina, the immensely popular Star Wars-themed pop-up bar, became a permanent mainstay in the Hollywood scene after immense demand from fans.
It would be easy to dismiss the pop-up trend as one having a major impact only in global gateway markets that will only play out in high-street retail sectors or trophy malls. It is true that those markets are where we have seen the most activity so far.
From digital natives to experienced brands, from museums to publishing houses, from social media to carmakers, from brand launches to record drops and everything in between (even political campaigns), pop-ups will continue to proliferate. Those who only see the negative side of the trend are not seeing that this movement is opening the door for non-retail (or at least non-traditional) space users to occupy retail space at a time in which it is sorely needed. These user types will increasingly be the permanent tenants of the future.
To understand where retail is headed in the Age of Experience, read Cushman & Wakefield’s national Report: Pop-up-a-Palooza, out now!