How to Start a Pop-up Shop

According to Storefront, a company that helps link pop-ups with real estate, retailers save up to 80 percent by opting for a pop-up store instead of a traditional retail one.
Source: Reuters

If you are planning to invest into a new business, but find it risky to invest in a retail space before testing the product in the market, a pop-up store will come to your rescue. Not only this, but it will also enable you to test different markets at separate locations. Such shops have become extremely popular in the US, UK, Canada, and Australia.

Whether you are starting your own coffee shop, clothes outlet, bakery, Halloween store, etc., pop-up shops will cater to your need for a temporary location. You can either rent individual shop spaces, a small area in the premises of an existing shop, garage area, community and church hall, or even set up a temporary structure in a shopping mall or boat. Today, setting up pop-up shops in shipping containers has also become very popular with several businesses.

Many established brands and startups are going the pop-up way to reach out to their customers in a better and direct way. In order to gain optimally from this kind of business, it is important that you know how to correctly initiate it.


1. Conduct Research

Before you zero in on an area for hosting your pop-up shop, conduct online and offline research about it. Find out if the area has housed other such stores earlier. Speak to other businessmen, and seek their guidance to understand and anticipate customer response. Take a walk in the area to understand if your target customers will pass your pop-up shop.

Remember that according to the same Reuters report mentioned above, there is a national retail vacancy of about 10%. This enables the landlords to offer the property for a shorter duration and at a cheaper lease rate to the retailers. Hence, ensure that you get a better bargain by negotiating the rate, and don’t settle for something that will prove too expensive for you. Try to have a cost-benefit analysis before starting up.


2. Have a Business Plan

Whether you are a small player or a big one, it is essential that you have a business plan in place before you start the actual business. Ensure that you note every detail about your products, finance sourcing, rent payment, overheads, employee salaries, vendors, etc., in the business plan. As you will keep moving your business from one place to another, ensure that you include the transporting cost in it as well.

You will also have to consider the duration for leasing the place. Generally, there is a phone number of the pop-up shop, which the company disconnects when it moves on to another location. You can also get a toll-free number for customer inquiries.


3. Scout for the Right Location

Your sale is directly proportional to the prospective customer composition in the area where your pop-up shop will be located. About 2,000 square feet is a size preferred by many as it enables you to accommodate all the goods and have a good display. Hence, ensure that the place is located near a railway station, commercial area, or mall so that it will have maximum foot traffic.

Find an area which will be suitable for the type of goods or services you are offering. For example, if you are selling designer footwear, getting a place on a high street or in a shopping mall will prove beneficial. Also, do not get a space that will be too small or big for your business.

Customers will not feel like entering a place that is too crammed up, and you may have to shell out a lot of money for a place that is too big for your business. Ensure that there is a considerable amount of space for the customers to move around and check out the products. Also, the place has electrical sockets and fittings. Most of the time, shop owners will charge you on a daily or weekly basis.

The rent will vary based on the area of the space, location, amenities offered, duration of lease, etc. Ensure that you get a place which you will be able to afford easily.


4. Attractive Display and Interiors

As your shop is temporary, you must take efforts to give it maximum exposure to book a great deal of profit within a short span. The display of the shop should be elegantly and wisely done. It should be able to hold the attention of prospective clients.

It is advisable that you map out the display before placing the goods. As it is a temporary shop, don’t spend too much on the interiors. Instead, use inexpensive objects like mannequins, room dividers, tables, crates, shelves, etc., to display your products. If you have a big budget, you can rope in a display designer.

Ensure that the pop-up shop is well-lit and does not give a creepy look and feel. It is highly advisable that you have a theme in place which will help decorate your store accordingly. Don’t forget to incorporate strong visual displays based on various themes of Halloween, Valentines Day, Christmas, Fourth of July, etc., in order to impress the shoppers.


5. Endorse Your Shop

Unless, you call for attention, people are not going to notice your temporary pop-up shop. Hence, it is vital that you make a promotional splash. It is important that you start speaking about your shop before it starts.

Roll out a press release giving details of your shop, its address, offerings, timings, schemes, etc. Ensure that the press release is carried by local newspapers, magazines, and online websites. Try to draw attention by getting a local celebrity for the launch.

Invite a large number of prospective customers, bloggers, journalists, etc., for the launch. Ask them to drop their cards and hand them your visiting cards. Use social media platforms, like Facebook and Twitter to reach out to a large number of people.

Display your store photos on Instagram, Pinterest, Flickr, etc. You may also ask one of your employees to carry a signboard outside the shop. Don’t forget the good old methods of word-of-mouth promotion, distributing flyers, and putting up posters.


6. Payment Management

Most of the time, if you are having a long-term pop-up, your rent will include the insurance and service charges. However, any fittings and repairs to the place may incur additional expense in case of a short-term lease. You will have to get a cash register or till for accepting cash payments.

Other than that, you can also accept payments through debit and credit cards. Getting a credit card machine can prove to be very expensive; hence, search for alternative options to accept payment. You can also utilize online wallets like PayPal, Google Wallet, Amazon Payments, etc., which offer payment through a secure mode.

Also, there are other websites that offer similar services for minimal charges. You can also utilize mobile payment devices and apps for receiving the amount.


7. Tax and Legal Formalities

Ensure that your lease agreement gives you the freedom to utilize the property as you want without much restrictions. If you rent out a facility for a shorter duration, the owner may prefer to allot you a license to occupy the space rather than a full-fledged lease. This may restrict your control over the property and limit the usage of space.

Also, your agreement may come with a ‘keep-open clause’ which will require you to trade continuously from the premises during the period of lease, in order to secure the landlord’s rental income. This is observed mostly if you are leasing out a pop-up in a commercial mall, so discuss it with your landlord. Even though it is a temporary setup, it does not mean that you will be exempted from taxes.

You will have to check with a tax consultant about the tax payment for your shop. Also, if you will hire employees, you may have to get the Employee Identification Number. If you are offering food or drinks, you may need a permit. Also, you will have to abide by all the health care and hygiene rules and regulations.


8. Insurance Policies

Though your rented property may be covered by the owner, you may still need to take a liability insurance for injuries to people while they were in your shop. You may also need to get a flexible shop insurance policy which will cover your business for a short duration. You may also have to insure your products while transporting them from one venue to the other.

Seek the help of a professional insurance agent to find out about the insurance options available for your shop.Experiment by hosting your store in unconventional spaces as this will draw more attention from prospective customers. Have ‘Limited Editions’ or ‘Unique Designs’ in your store as people tend to buy exclusive stuff immediately.

Ensure that customers visiting your shop will also be able to connect with you through your website for their future requirements. The key to having a successful pop-up store is to engage the customers through your creative displays, unique products, and cost-effective offers. What matters the most is that your shop leaves a lasting impression on the minds of customers and gives them a reason to return for more.

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