November 28, 2016

The Pros, Cons, & Logistics Involved In Popup Stores (PODCAST)

creating a popup store This podcast was based on a request from a listener who wanted to understand more about how to set up and operate a popup store.  I though it was such a good idea, and not a topic we’ve covered a lot on this site, that I reached out to Matthew Greenwell of Storefront, a technology platform that helps brands find retail locations for their temporary events and popup stores, to find out what small food entrepreneurs need to know about this interesting sales channel.

TRANSCRIPT:

Jennifer:Today’s podcast topic came as a request from listeners, so I’m really excited to talk with our guest today. Matthew Greenwell works with Storefront, which the world’s leading online marketplace for renting short term retail space. Storefront specializes in connecting tenants, which include brands, fashion labels, designers, and e-commerce businesses with commercial space to create short term pop-up stores, showrooms, and other concepts.

 

Their clients can find and book space for durations as a little as one day, one week, to upwards of several months or a year. Storefront now manages over 10,000 retail spaces globally, and has to date, received more than 80,000 client requests. Their mission is provide access to premium pop-up spaces on every high-street in every city globally.

 

As always, a link to Storefront’s website will be included in the transcript for today’s podcast, which is available on the SmallFoodBiz website.

 

Matthew, thank you so much, really appreciate this. As I said, this is a topic that our listeners requested, and we’re really excited to learn more about, so thank you.

 

Matthew:No problem at all. Thanks for having me.

 

Jennifer:Let’s start with the basics, just in case anybody out there listening doesn’t really know or doesn’t understand, what exactly are pop-up shops, or pop-up stores, and how are they beneficial to small business owners?

 

Matthew:Yeah, great. A pop-up store is essentially a short term let of a retail store. Durations vary, however the concept is that they’re there for a short time and then they’re gone.

 

The main reason people use pop-up stores, big, small business owners, there’s 3 or 4. The key ones, which really always stand out, are the risk reductions, a risk-free way of launching an idea. Obviously, you could launch a ten year lease retail store. What happens if your ideas don’t work within the first year? You’re locked into that store. So a reduction in risk is one of the key reasons why people use pop-up stores.

 

The next is obviously a reduction in costs. You’re not locked into a ten year deal, so the balance sheet, and things like that of your business, is a lot less risky because you have a reduction in costs.

 

And then other key reasons, which are not really financial, but to do review analysis, it’s great for testing your idea. You may have a brand new, entrepreneurial concept. Or you want to test something in an area that has not been done before. They’re really great for testing that idea and getting a feel for what your customer might think in a local area.

 

And then finally, they’re great for building buzz. Sometimes big brands which, they’re not small businesses, they sometimes use pop-up shops for [inaudible 00:02:43] purposes, building buzz, generating PR, attracting people through a short period of time to an area. So, in the same sense small entrepreneurs and business owners can use them for the same way.

 

Jennifer:Fantastic. So, when we think about pop-up spaces, and there’s obviously a lot of logistics involved with it, let’s say somebody listening, as they’re thinking, “I’m going to search for pop-up locations.” What sort of things do they need to be concerned about from a logistics standpoint, with regards to WiFi so that they can run their merchant account, or permits necessarily? What are some of those logistical pieces? And, obviously, I’m sure that there are hundreds, so if you could highlight a couple that people should be thinking about?

 

Matthew:I think the most obvious is, are you a food business, or are you an alcoholic business that sells alcohol, or are you a more retail business. Over here in London, we have lots of different shops. Obviously, if you want to sell alcohol, you’ll need an alcohol license. They can be applied for temporarily, or some premises where we have those in place. And it’s the same for food and drink. If you have an open-flame cooking stove or oven, there’s needs to be extraction times, there needs to be health and safety checks in place. So again, you can apply for all these, and set all these up. However, obviously if you’re doing a short term shop, we would hope that the space already has those in place. So always check that.

 

Smaller details such as things like the internet, I know that here in London it’s very, very easy now just to get, they’re actually free, there’s companies such as iZettle. These are small, tiny, plastic card-reading machines which slot into your phone, so you can use those, they’re free to use on your phone. Things like WiFi, and things like that, they’re very easy to overcome if the spaces don’t have them. But always check if the space does. The find is a little easier to worry about.

 

Jennifer:So obviously Storefront, and you guys, you provide a really simple and streamlined way for businesses to connect with, or to find spaces that they could use for pop-ups, and for short term retail spaces. Do you have any recommendations on how entrepreneurs either should talk to the retail holders, the space holders, or how do they, even if they’re working through Storefront, obviously the entrepreneur wants to have a good, ongoing, relationship with this storefront owner, might potentially use them in the future, so what sort of things can the entrepreneur do, or the small business do, to build a good, healthy relationship, with the space holders?

 

Matthew:I should say, something we pride ourselves on, yes, although we manage hundreds, or actually thousands, of different shops now, the same principles apply to a small business owner approaching a new shop, just like when we approach a new shop owner. The key theme is trust. You really need to build trust with that space owner. You’re using their property for a short period of time. They need to trust that everything you said is going to happen. They need to trust all the details which you’ve outlined will go through, and the safety and things like that. Once you build the trust, and by doing that you’re talking about how you’re going to watch health and safety if there’s lots of people in the store, opening and closing times. You could be defining details right down to things like, “we will need an hour to close up after the public have left.”

 

It’s very important to go through all the final details, be very, very honest, to build that trust. And then obviously, if you follow through with all of that it’s very likely that the space owner will want to continue working with you in the future, which is how we work with our space owners.

 

Jennifer:You brought up a lot of great details, which then brings me to my next question. It sounds like you need to have a contract with the space holders, that does outline everything that’s going to happen, or not happen. Is that right?

 

Matthew:Yeah, exactly, yeah. The areas are usually agreed in person or via email first. And then between every tenant and space holder there is a short term contract, they’re actually called short term license agreements over here in London. But whether it’s some sort of email contract or an official contract, all the small details need to be logged in there. So, these are the opening and closing times, these are who’s paying the bills. In some cases if the pop-up is really short, obviously a transfer of bills, costs such as electricity and heating, is not included. The landlord will continue to pay that. However, if it’s a longer pop-up, which could be 6 months, perhaps the landlord would want the new tenant to cover those costs. So all those fine details should be mapped out in writing, and signed by both parties to ensure that there’s no fall-outs at the end of the events.

 

Jennifer:Great. How far in advance should a business owner, or entrepreneur be thinking if they’re saying, “Okay, I’d like to do a pop-up event,” and they haven’t done one yet. How far in advance do they need to be planning? Because you’re talking about finding and securing the space, getting this contract and all those details pulled together. And then obviously, getting ready to execute on the event, or on the space itself. So how much time do you recommend folks plan in advance?

 

Matthew:I think it’s a difficult question to give an exact answer to. One thing I am settled on is if the space is very popular and in high demand, book that well in advance. We sometimes have bookings coming in for next summer 2017, for some of the spaces we work with, because they’re extremely popular, and their [inaudible 00:08:34] isn’t there. So I think step one is ensure you have the space.

 

Then, when you’ve got to that, and I suppose it depends what kind of industry you’re in, but a 2 month period of doing the PR momentum, the marketing, is always great. It’s talking to your friends, it’s maybe trying to get some bloggers to write about what you’re about to do, even publications. And then even, when you’ve got to there, you could be hiring a week before your event starts, and that sort of stuff. But I think the key aspect is getting the space secure. And then, depending what industry you’re in, you tailor your run up to that event, I think, is the way I’d do it.

 

Jennifer:And that actually, that’s a great point, the idea of marketing the event. Because even if you have this phenomenal space, it doesn’t necessarily mean that all of a sudden you’re going to have hoards of customers coming through the door. You mentioned working with, potentially, bloggers and PR to try and build up some press and some buzz. Are there any other ways that you and your team have seen that, certainly in a smaller business who might not have a huge PR budget, how they can market their pop-up event, to press, or to customers, to try and get that interest?

 

Matthew:It’s kind of an obvious answer, which a lot of us have learned, and a lot more now happening, is social media. Social media is obviously the first place you go to to get really cheap marketing done for, there’s no cost in some cases. Go and up your Instagram following, do all up your Facebook fanpage following, interact with people, reach out to other people in the industry, talk about what you’re doing. For us, it’s always actually the first protocol. And then obviously you go down the traditional route of marketing and PR, which is paid: flyers, physical materials, and things like that. Yeah, social media’s the big one.

 

Jennifer:In addition to marketing, let’s talk about now that somebody actually has the space and they’re getting ready to put their wares into it … Just so that folks know, I would highly recommend looking at the Storefront website because you guys have a lot of information on the website too, that helps business owners create successful pop-up experiences. Do you have any tips on the whole idea of it’s not just having the product, but you have to design a display in a way that’s going to attract a customer’s attention? Do you have any insight onto ideas, or thoughts, of how people can best utilize the space to create something that’s going to look really good and really attractive to consumers?

 

Matthew:Definitely. That’s a really great question, and a lot of our clients ask us the same thing. It really does depend on the space. That’s why, again, it comes down to the top product you’re selling. So if you’re quite an edgy, modern, up and coming, product, you can get really, really crazy. We have clients that have used recycled benches, or they’ve made interesting contraptions by hand to have as point of sale displays, and things like that. And then on the other spectrum, we have people which have gone to shop fitters and they’ve asked for a really cheap, fast, granny shop fit to help market their spaces.

 

What’s great is, by all means, any one that’s listening and wants to get some inspiration, we’ve got quite a few guides, and blog entries on this exact topic, actually, just on our website. Please go to the blog section, you can check some really interesting things people have made for some of the pop-ups we’ve done.

 

Jennifer:Fantastic. We’ve been talking about, one, small business and then, working with the retail space. But I was wondering, have you ever heard of multiple smaller companies, or smaller brands, getting together and creating one pop-up shop together, where a customer could come in and see a variety of products from several different businesses? Because, I guess I was thinking from the standpoint of, if you’re a small business on a smaller budget, this might be a way to really get a lot of bang for your buck, by partnering with other small business.

 

Matthew:Yeah, I think it’s a really … we call it over here, shop sharing. It’s where two brands come together. We think it’s a very, very, very powerful tool to collaborate with someone else. Basically, where the market’s moving in retail in general is the consumers, they want more than just a point of sale shop, okay? What they’re after is an experience when they enter these spaces. And what sometimes can happen is what we’re seeing a lot more now is some really cool contemporary fashion brands, for example, partnering with a coffee brand. And what you find is, you go to the store and there’ll be a retail store, but then inside there’d also be a small area where people can have a coffee and can sit down, they can read a magazine. So, all of a sudden, the store becomes immersive and people leave with an experience which is a lot more lasting than just an item which can be passed about.

 

So collaboration is great. Not only for the experience level, which I was just talking to you about, the immersive feel. But also, cost saving, of course. So you could actually get a really high protocol shop with a really amazing street for half the price if you could find the right brand to collaborate with. So yeah we’re really, really big fans of people coming together to launch these collaborative ideas.

 

Jennifer:I’ll be honest, I never thought of necessarily collaborating, with a brand who, let’s say would be outside of the food industry. But that example you gave of possibly partnering with a fashion brand, or some other type of consumer goods who had interesting, fun, edgy … And that would be a great way for a food business to get more eyeballs on their product and get people interested in it and add value for the other brand as well. So thanks for sharing that. That was really good.

 

Matthew:Yeah, definitely.

 

Jennifer:My last question for you is, for a small business, or if they were a couple small businesses who were looking to share a store together, who are going to do their very first pop up event, and are probably feeling a little bit, both excited and trepidatious as they head into this. Do you have your one biggest tip that you would give to these entrepreneurs to help them as they start this process in creating their first pop-up event?

 

Matthew:I suppose it’s all about preparation. You’ve got to prepare and research everything, as much as possible, if you really want it to be a success. We’ve worked with lots of brands, and they’ve rushed into things, they’ve picked the wrong location, the location’s [inaudible 00:15:31]. To give you an example, someone’s picked a location, but they’ve visited the space only on a Saturday, and then they quickly realize that that particular space is only good Saturday and Sunday, and it’s not good Monday to Friday.

 

So in every decision that you make towards launching your idea, do your research and prepare. That comes down to the location, and the demographic in that location, to the size. Don’t just go in and make a visual view of how you’re going to set your shop up. Measure the floor, make sure your point of sale which you’re going to bring down to you will fit into the store.

 

And then, over to the marketing side. So you’ve picked your location, you already started designing your point of sale. Make sure that you give yourself 6, 7 weeks to run up the part of the marketing, the PR, from social media, and then maybe 2 or 3 weeks beforehand, some paid flyers or posters, and things like that. For me, the biggest thing is preparing and researching every aspect of the decision-making process which you’re going to go through to do a pop-up shop.

 

Jennifer:Thank you. I really appreciate everything you’ve shared. Like I said, this was obviously a topic that was brought to us by listeners. And so having your expertise weigh-in on this has been invaluable. I’m excited talking to you, because I think about all those food brands, it may be such a huge asset to their business to create a small pop-up event. And like you said, to test the market, to see how consumers respond. Versus, especially for a food company, going in and building out a full kitchen, and building out a full space is just so expensive.

 

Thank you so much. I certainly hope that some of our listeners, I would love to hear some of our listeners go forward and create pop-ups and hear what their experiences are. So please share those as well. And Matthew, thank you for your time.

 

Matthew:No worries at all. There’s one thing I just like to add, is [inaudible 00:17:22] businesses. I think what’s really great, and just one final point, is don’t be scared to launch your pop-ups with other competing food brands but on the same street. We’re seeing that a lot now, you can really re-vamp a whole street with 2 or 3 pop-ups of the same brand. So if you do have any friends with complementary food businesses, I think that’s a really powerful tool as well. Work together, and it’s worked really well over here for some of our clients.

 

Jennifer:Excellent, thank you. And again, I’ll include a link to Storefront’s website on the transcribe so that, like I said, it can help you find those spaces that could work for you, and for your business, and possibly for partnering with other businesses that you know. Thank you, Matthew, appreciate it.

 

Matthew:No problem at all. Thanks for having me.

 

Jennifer:Thanks.

 

Interested in listening to other Small Food Business podcasts?  Check out complete lineup of previous interviews and topics by clicking here.

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