How to Open a Pop-up Shop in 9 Steps
This article is part of a larger series on Retail Management.
A pop-up shop is a temporary in-person retail activation. It allows you to open a small store for a limited amount of time, enabling customers to visit you and interact with your brand and products in person.
Pop-up shops are good for your retail marketing strategy, especially considering three-quarters of all retail sales happen offline—and they’ll continue that way for the foreseeable future. There are many pop-up shop ideas you can pursue to promote your business. Let’s look at how to do it.
Step 1: Determine the Goal of Your Pop-up Shop
If you want to open a pop-up shop for your business, you’ll want to start by choosing your goal. Without a target in mind, it will be difficult to plan, execute, and assess your pop-up shop. There are many goals and reasons why small business retailers may open a pop-up shop, including:
Pop-up shops offer an avenue to build in-person connections that online shopping can’t replicate. Consider looking at retail metrics like repeat purchases, email signups, and other indications that customers feel a stronger connection to your brand post-pop-up.
Pop-up shops are a great way to increase retail sales because they give your customers a reason to buy new products. Maybe seeing your items in person gives the boost they need to finally convert, or it could be the temporary nature of the store that fosters a sense of urgency.
Shipping costs are a necessary evil when it comes to ecommerce. Though it’s best to offer free shipping—especially considering two-thirds expect it—this isn’t always possible. With a pop-up shop, you can turn your space into a fulfillment center, allowing online customers to pick up their orders in person.
This click and collect—or buy online, pick up in-store (BOPIS)—fulfillment method was trending pre-COVID and has skyrocketed since. In fact, according to Shopify, 38% of shoppers plan to continue using curbside pickup options. It also offers an opportunity to upsell and cross-sell.
Pop-up shops offer an affordable way to test the retail market before fully investing in opening a retail store. It can cost up to $100,000 to open a permanent shop—you can execute a temporary pop-up for a fraction of the cost. In fact, pop-up shops are an excellent way to make sure starting a retail business is right for you because it’s a relatively low-commitment foray into retail.
This is exactly the approach Warby Parker took before the once online-only brand expanded into physical retail. Now they have locations across the country and even a few in Canada.
Pop-up shops can help you build buzz and awareness for your brand and products. This is especially useful if you’re a newer business or targeting a new audience segment. Pop-ups offer excellent opportunities to boost social engagement and chatter about your business. You can also collaborate with other brands on a pop-up shop to put your business in front of their audience—and vice versa. Some permanent retail stores also host pop-up shops within their spaces, another excellent way to put yourself in front of a new but targeted audience.
Because pop-up shops are in-person, they offer different opportunities to provide complementary services to your customers. Today’s shoppers want more than just to make a purchase and leave—they want an experience. If you sell clothing and accessories, perhaps offer free hemming at your pop-up. If you sell skincare products, you might provide free facials or massages.
Did You Know?
The pop-up shop market is growing and currently worth about $14 billion according to IBISWorld.
Step 2. Set a Budget
Before you meet with a real estate agent or potential landlord to find a location, consider your budget.
Your budget will depend on several factors, including location, length of lease, and size of your store. When determining your ideal rent, it’s wise to research the rent prices in the area to have a good idea of what to expect.
The duration of your lease will also significantly impact your overall budget. In 2016, Inkbox spent approximately $15,000 for a two-week rental. Meanwhile, retail analytics firm Popertee estimated the total cost of a 30-day pop up around $33,000. However, keep in mind that Coldwell Banker Richard Ellis (CBRE) estimates that current commercial rents are 37.5% lower than in 2019 in markets like New York City due to current real estate vacancies. On the flip side, things like inventory and labor may cost more than previous years.
Rent isn’t the only cost you’ll incur with a pop-up store. You also need to factor in staffing, marketing, inventory, space modifications, insurance, and technology expenses. When negotiating your rental agreement with the landlord or real estate agent, remember to ask what’s included—and it can’t hurt to try to negotiate extra or reduced expenses for things like Wi-Fi, utilities, and licensing.
Step 3. Choose a Location for Your Pop-up Shop
Scouting the perfect location for your pop-up store is key to your success. But before you hit the pavement, you need to identify your must-haves to help narrow down the search.
When thinking about where you want your pop-up to be, consider where your audience is most likely to be. If you already have a successful online business, look at your existing customer demographic data to see where most shoppers are located.
Once you know roughly where you want to have your pop-up shop, narrow it down and consider the following attributes of your location:
- Type of space: Pop-ups can happen in a variety of areas, including vacant storefronts, galleries, pop-ins with existing stores, shopping centers, malls, or even mobile stores with trucks or buses.
- Your target market: Choose a neighborhood or area your preferred customers will frequent. You’ll also want to consider if you want to be in a city or a more rural area.
- Branding and business goals: Find a location that makes sense for your brand and the future vision you have for your business. For example, if you want to test the idea of opening a permanent storefront, choose to host your pop-up in a location you’d also consider for that permanent fixture.
- Events or areas of interest: Research local events and tourist attractions in the area that would drive additional foot traffic—or make your event a hassle.
- Accessibility: Figure out how customers are going to find your location and get to it (by personal or public transportation). Consider local bus stops or train stations as well as parking options. Try to find an area with plenty of parking or access to public transportation.
Narrowing Down Your Venue
Commercial real estate has taken a significant hit over recent years due to businesses closing amid the COVID-19 pandemic. Available retail space listed in the US, UK, and France between June to August in 2020 increased by 125% according to Appear Here. Rising vacancy levels create a unique opportunity for landlords and business owners to strike deals in a lower-risk arrangement.
Once you’re ready to select a venue, think through the following:
- Store layout: Visualize what the space will look like with your pop-up. You’ll need to think about your ability to not only display products for customers but also stock extra inventory out of sight.
- Venue amenities: Being aware of precisely what comes with the space ensures you will not have surprises as you set up your store. Check with the landlord about reliable Wi-Fi, electrical outlets, lighting, security cameras and alarms, and restrooms. If a utility like internet access isn’t provided, consider a mobile hotspot and make sure it works reliably in the space.
- Rent: Determine the rate and the time frame you will operate your store and understand the included extras such as parking. Remember to include any costs for required insurance.
- Modifications to the space: Making the store fit your vision could require physical changes. Make sure you and the landlord agree on what is and is not acceptable.
Plus, because a pop-up shop is temporary, you’ll want to pay extra attention to setup and teardown. Determine whether your potential venues offer an easy way to get everything set up and taken down when it’s over.
Step 4. Obtain Licenses & Permits
Your required licenses and permits depend on many different factors, including location and what types of activities you plan to have at the pop-up shop. At a bare minimum, you’ll want to have the following:
- Business license and business registration
- State sales tax permit
Other potential licenses and permits may include:
- Building permit for major changes to the physical space
- Noise permit, essential if you plan to have live or loud music
- Liquor license if you plan to serve and/or sell alcohol; this is estimated to be around $300
- Racking permit if you have storage exceeding 5’9” in height
- Sign permit for your storefront sign
- Food Handler and safety permits if you plan to serve and/or sell food
It’s always best to check with your local jurisdiction to see what’s required of you. The city of Chicago, for example, issues specific pop-up shop permits. A five-day license costs $25, or you can invest $150 for a year-long license.
Step 5. Prepare Inventory for Your Pop-up Shop
When prepping inventory for your pop-up shop, you’ll need to consider the following inventory management challenges:
- Transporting inventory: How are you going to get the products to your pop-up shop? How are you going to pack up the unsold products after your pop-up shop, and where will you take them?
- Storing inventory: Do you have space at your pop-up shop to store extra product, or will you need to keep it somewhere else? What else do you need to properly store stock—security, temperature control, ladder?
- Replenishing inventory: When you sell out of product at your pop-up shop, how will you restock the shelves? What will you do if you run out of inventory altogether before your pop-up is complete?
- Tracking inventory: Is your technology able to sync inventory data with other sales channels?
Step 6. Set Up Your Pop-up Shop Software
Your point-of-sale (POS) system is arguably the most important piece of tech equipment you can have for your pop-up shop. The right POS can act as a total business command center, a place where you can not only administer transactions but also view inventory, customer, sales, and other relevant data.
When you have a pop-up shop, you don’t want to invest a lot in the technology—but you still need something that’s both flexible and reliable for your temporary retail activation. Consider Square POS and its affordable hardware options to accept payments, like the contactless chip reader. This will allow you to sync your data as well as process in-person payments for a variety of payment methods. Plus, the first card reader is free.
Check out these other resources to help you get up and running with a POS for your pop-up shop:
Barcode scanners will help you speed up the checkout process and capture accurate sales data. Whether you use UPCs or custom SKU numbers, consider choosing a POS system with built-in barcode generators, like Square for Retail. Adding a barcode for each product saves valuable time at checkout, which is especially essential at pop-ups.
Appointment shopping has seen a surge in recent years due to safety and a more personal shopping experience. According to a survey by JRNI, 34% of consumers feel more confident shopping in stores that offer prebooked appointments. Plus, an increasing number of retailers like Apple, Best Buy, Lululemon, SuitSupply, and Neiman Marcus offer appointment shopping.
There are several options out there for appointment scheduling and booking software. Check out these resources to help find the right one for your pop-up store:
If your pop-up shop is exclusive to a RSVPed guest list, you’ll want to set yourself up with some form of ticketing software to streamline the process. Using a ticketing software will enable you to get an approximate headcount before the event so you can plan accordingly. Plus, ticketing software can collect additional data points and information that can help you build on those customer relationships well after the pop-up is over.
Step 7. Get Your Team Ready
There are two main ways you can staff your pop-up shop: hire new employees or use the ones you already have. If you’re hiring temporary staff to work the shop, your approach can be similar to if you were hiring seasonal staff. Write a well-developed job description and ad, start recruiting early, and get out there to promote your openings.
Onboarding temporary pop-up staff and training your existing staff for the pop-up shop should be similar. The former will need extra brand and product training, while the latter will need more pop-up-specific training and development. Both groups will need training on your tools, including the POS, customer relationship management (CRM) software, inventory management software, barcode scanners, and more.
We have lots of resources to help you hire, onboard, train, and retain your retail staff:
Step 8. Promote Your Pop-up Shop
It’s helpful to divide your retail marketing strategy for your pop-up shop into three key phases: before, during, and after.
Before your pop-up shop launches, your job is to build buzz and get people excited about the upcoming event—excited enough to mark it on their calendars and even share it with their networks.
Some marketing channels to consider pre-pop-up include:
- Email: Email marketing is a powerful tool because it’s a direct line of communication to your customers. Amp up your pop-up event with an email blast or even a series of emails to send to your list beforehand.
- Social media: There are more than 4.3 billion people on social media worldwide, so you’ll want to craft a social media strategy to reach those potential buyers. Create a Facebook event to hype up the event—and so people are notified when it’s here. You can also create a countdown on Instagram and tell your Instagram followers to turn on post and story notifications.
- Paid social: Social media is also a great channel for paid advertising. Investing in social ads allows you to target your audience more specifically. For pop–up shops, you’ll want to focus on people who fit your target market and are located in the nearby vicinity.
- Paid ads: Again, paid display and search ads allow you to target specific audiences with tailored messaging about your upcoming pop-up shop.
- Your website: Any information about upcoming pop-up events should be easy to find on your website. Promote it on your homepage banner and consider making a page dedicated to events and news.
Your marketing efforts aren’t over once the pop–up has begun. In fact, far from it. During the pop-up shop, you can continue to build buzz and reach new audiences—and even lure them in to make a purchase.
- Livestream: You can broadcast your pop-up shop live to your digital audience. Live streaming is an excellent way to create a way for people to interact with the pop-up shop even if they can’t physically be there. Plus, many social platforms alert page followers when they go live, so this can serve as a reminder for local followers to visit the event.
- Hashtags: Incorporate local and industry-relevant hashtags to your social posts and live streams. Consider creating your own branded hashtag associated with the event and encourage shoppers to tag their posts with it.
- Proximity marketing: You can run ads that hypertarget your local market and encourage them to visit your pop-up shop while they can.
- Build your email list: Collect shoppers’ email addresses at the point of purchase and add them to your email subscription list. This will allow you to nurture the relationship over time, as well as promote future pop-up shops. Remember to use an email platform that will allow you to tag or segment these customers as people who have visited a pop-up shop in the past.
We have some resources to help you choose an email marketing platform for your small retail business:
Your efforts are still needed even after the pop-up shop has finished. Marketing your pop-up shop, brand, and products should never stop—and there are many ways you can leverage the pop-up for post-event marketing.
- Say thanks: It’s important to recognize and thank the people who came to and supported your pop-up shop. Ideally, you collected email addresses or even phone numbers from shoppers during the event. Afterward, you can communicate with them to share your gratitude for their attendance. Go the extra mile and offer a discount or some sort of free gift to show your appreciation.
- Recap: Share a recap or highlight reel from the event with your audience. You can post this on social media, send it out via email (remember to include pop-up attendees!), and share it on your website. You can also repurpose and use this content to promote future pop-up shops.
Step 9. Post-mortem: Measure the Success of Your Pop-up Shop
When your pop-up shop has completed, it’s important to conduct a post-mortem analysis to find out what worked, what didn’t, and why. You can then apply these learnings to other areas of your business, as well as keep them in mind for future pop-up shops.
When measuring the success of your pop-up shop, consider the following retail analytics key performance indicators (KPIs):
- Foot traffic: You’ll want to count how many people walked into your pop-up shop. While you can technically do this manually, there are many foot traffic counters and technologies you can use to streamline the process and improve the quality of your data.
- Sales: It’s always a good idea to consider your total sales for any campaign or event. This will tell you how many items you sold and how much revenue you generated for those sales.
- Conversion rate: Your conversion rate tells you the percentage of people who visit your pop-up that end up making a purchase.
- Average transaction value (ATV): This metric tells you how much a customer typically spends in each transaction. You can compare your pop-ups ATV to your ecommerce ATV and the ATV for other types of transactions to see which channel drives the highest ATV.
- Sales per product: Breaking sales data down by product will reveal which items shoppers are most interested in. Consider these metrics when forecasting sales and your buying strategy.
- Sales by day/time/hour: It’s helpful to understand when your pop-up generated the most sales. This information will inform future pop-up hours and potential brick-and-mortar store operating hours, as well as staffing decisions.
- Sales by customer: Find out who your top spenders are and see what they buy. Look for trends and then find ways to tap into other customers with similar spending habits. Use this data to create shopper profiles so you can personalize marketing in the future. Pay extra attention to the customers’ ZIP codes.
- Social mentions: Your pop-up shop isn’t just about driving sales. You also want to build your digital audiences and boost engagement. Track social mentions and the sentiment of what people are saying about your brand and pop-up online.
- Email subscribers: Building your email list should be a secondary goal to every pop-up shop. Consider how much your list grew as a result of the pop-up shop.
A pop-up shop is a great way for brick-and-mortar and ecommerce merchants alike to build buzz about their brand and products. Temporary retail activations give shoppers a reason to get excited about your brand, and it’s an ideal way to test physical retail without making the full investment in a proper storefront.