Thursday, March 31, 2016

Entrepreneurship | Pop-Up Stores Thrive in a World of Failing Retailers

Jane Mosbacher Morris, founder of To the Market, with a nine-piece Kantha tabletop set handmade by human trafficking survivors in Bangladesh. Credit Philip Scott Andrews for The New York Times
During trips to war-torn countries like Afghanistan, Jane Mosbacher Morris discovered, to her alarm, that women had little control over their finances. Some were forbidden to work or even touch money. The antidote, she decided, was starting an online market stocked with artisan works made by survivors of war, genocide, human trafficking and other abuses. The site To the Market would put much-needed money into their hands.
Each handmade piece on the site has a powerful back story, such as the deka necklace, which is made of recycled paper by female survivors of war in Northern Uganda.
“People want to know where something is made,” said Ms. Morris. “A piece may be spun in a leper colony or crafted in an AIDS shelter.”
But in cyberspace, goods can’t be touched. So Ms. Morris, who was a counterterrorism adviser for the State Department, turned to pop-up stores as a way to sell the jewelry, handbags and other items that carry these powerful stories.
She began pitching her pop-up stores at conferences, such as one for refugees put on by the Red Cross. Others are held in yoga studios or women’s homes. These places are usually free, and she can walk away with tens of thousands of dollars of sales, putting more money into the hands of survivors.
Entrepreneurs like Ms. Morris are helping revitalize pop-up stores, a decades-old retail concept. More party than hard sell, this new breed of pop-ups is becoming increasingly innovative and fun — far more than the seasonal pop-ups that once prevailed. And they are also increasingly profitable, experts say, since consumers crave these new experiences.
Using pop-ups does, of course, still help entrepreneurs stay nimble and lean. They do not need to sign long leases, stash away much cash or carry big credit lines. For their part, consumers can meet the designers and touch and feel their works, which cannot be done online. In the process, brands can be built more quickly, sales can be increased and new products can be tested.
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“Pop-up stores are a tremendous format,” said Burt Flickinger III, managing director at the Strategic Resource Group. “They are exponential ways to build a brand.”
These stores, and e-commerce, are putting big dents in older retail chains, Mr. Flickinger said. They are going through a “retail ice age,” he said, as once-reliable retail anchors like JC Penney and Sports Authority sputter. They are weighed down by high costs and long production schedules, he added.
“Consumers are looking for new ways to shop and new brands,” he added. “They want better quality at better prices. Legacy stores, though, have a harder time changing their mixes.”
In a Darwinian sales environment, pop-up stores are winning.
The hip eyeware maker Warby Parker helped push pop-up stores into a year-round, fun event. The company turned a school bus into a traveling eyewear shop, tricking it out with leather couches, wood paneling and even vintage books, and then took it on the road trip across the country.
“The bus was visual and out of the box,” said Melissa Gonzalez, author of the book “The Pop-Up Paradigm: How Brands Build Human Connections in a Digital Age” (Lionesque Media, 2014). “And it showed that you don’t need a store.”
Pop-up entrepreneurs are continuing to innovate. Events are, well, popping up in garages, around pools and even in locked storage spaces. Some retailers are even doing 3-D pop-up printed jewelry, say experts. And one artist opened a gallery in a giant Christmas tree.
“They’re risk takers,” said Jeremy Baras, chief executive of PopUp Republic. “Pop-up stores are temporary so you can be more creative.” The event, he warns, should blend in your product or service, though, rather than being a distraction.
Handmade threaded baskets from Nicaraguan artisans, sold by To the Market. Credit Philip Scott Andrews/The New York Times
Catherine Nicole, who has an online jewelry boutique of the same name, has even ditched trade shows for pop-ups. She tries to hold two pop-ups sales a month, where she sells her jewelry, which is made of semiprecious gemstones that were inspired by travels to Spain and Africa. This strategy, she adds, is in keeping with her business model of staying lean and agile.
“It’s more lucrative to stay out of the game and approach it in an artisan style,” said Ms. Nicole, who studied apparel design at Parsons School of Design. “It leads to sticky customers.”
For one pop-up, she set up shop in the lobby of the software developer Ceres Logic, which many people passed through. And for Valentine’s Day, she sold her jewelry during men’s happy hour at a bar in Austin, which did not cost her anything, either. She also worked with flower vendors, chocolate sellers and a massage therapist for that event.
“I can’t compete with Forever 21’s prices or David Yurman’s notoriety,” she said. “But I can show my customers that I value them. They don’t want to walk into a store and be treated like nobodies.”
Like Ms. Nicole, other entrepreneurs are also forging partnerships with food makers and other artisans. And these events may be held at hotels, malls or other high-traffic locales. Successful pop-ups should ignite the five senses, Ms. Gonzalez explained, because they are selling lifestyle events.
Sense-bolstering is exactly what Paul Trible, a co-founder of the luxury men’s wear company Ledbury, aims for with pop-ups. To build popularity, he has been throwing partylike events, which have included bourbon tasting, local breweries and DJ’s who spin funk and soul music.
One pop-up party in Atlanta drew a crowd of more than 350. And Steven Yeun, a star of “The Walking Dead,” even brought Scott Gimple, a noted television show and comedy writer, who bought a blazer.
“We’re all about fit and quality, and that’s our mantra,” said Mr. Trible, who studied shirt making with a London master tailor after his dreams of going into finance evaporated during the financial crisis. “And that’s very tactile. You have to feel it. So these pop-ups are great introductions for customers.”
For Mr. Trible, pop-ups fuel sales. And typically, his best e-commerce customers spend the most money. He also uses pop-ups to test retail locations, such as the Georgetown area of Washington, where one pop-up store lasted for three months. The team looked at foot traffic, repeat buys and other variables. “We’re opening a permanent store in the same neighborhood,” he said
Mr. Trible added that organizing a pop-up event in one week can be stressful. “You need a staff that’s a SWAT team to execute,” he said.
Lack of planning, though, can doom the event. Retailers may not fully evaluate a location, said Ms. Gonzalez, or invest enough time in telling a story. “Understand the goal of a pop-up,” she advised.
During the early days of the Thursday Boot Company, pop-ups were held at a co-founder’s apartment in the Flatiron section of Manhattan. “We did fittings,” said Connor Wilson, Thursday Boot’s other co-founder. “Gave out free beer. And it was a chance to connect with customers.”
Another free pop-up was held at The Garret, a woodsy bar in Manhattan’s West Village, on a Saturday afternoon. It helped spur Thursday Boot’s Kickstarter campaign, which ended up raising $276,610 in one month, one of the most-financed footwear campaigns ever.
These days, Thursday Boot events are more formal. One three-month pop-up event was held at a retail space, which was part of Union Market in Washington Its handcrafted boots were displayed on industrial cable spools and the specially designed Thursday Boot flag was flying. “We’re trying to keep it fresh and fun,” said Mr. Wilson.
Shopping in person for handcrafted items is a nice change from buying online, said Ms. Morris. “And I love being part of the process,” she said.

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