Pop-up shops typically open in the Christmas run-up to cash in on festive spending. But do they have any other applications in the recession?

What is a pop-up shop?

A pop-up shop is a temporary store that retailers will open on a short-term lease. The store will usually have a limited range. Historically, pop-up shops have opened up in the run-up to Christmas in shopping centres, selling key festive gifts such as calendars, books and toys. They have tended to be run by independent retailers, rather than major multiples, but this is now changing.

Which retailers are using them?

Everyone from HMV to Harvey Nichols have been opening pop-up shops. HMV opened 10 shops in time for the key Christmas trading period, mainly in towns where it wasn’t represented, including Torquay and Burnley, and in larger shopping destinations such as Bluewater, where it acts as a spillover for its existing store.

Harvey Nichols has set up pop-up wine and food shops in Manchester, Bristol and Birmingham.

Why open a pop-up shop?

With the glut of space that has come onto the market since the economy slumped into recession, retailers have the upper hand when it comes to leasing shops.

However, with the uncertainty of the economy still hanging over retailers, they don’t necessarily want to commit to a 15-year lease, so opening a pop-up shop is a good way of testing a location. For consumers there is also a sense of urgency to buy, as the shop won’t be there for long.

Many retailers will open pop-up shops for the Christmas period, but others are using them to try out locations to see if their brand works there. Homewares and fashion retailer Cath Kidston, for example, is opening pop-up shops in tourist hot spots to test the market.

Can other types of sectors open pop-up shops?

Pop-up shops can be a useful way to raise brand awareness. Just two recent examples are Marmite and Phaidon. Marmite opened a pop-up shop in central London to raise brand awareness with products such as Marmite sandwich holders and oven gloves. Book publisher Phaidon was attracted by the availability of short leases and decided to give pop-up shops a try. It also felt that, with the depletion of bookshops on the high street, its exposure to consumers had narrowed, so it wanted to test something new.

Are there any disadvantages?

Retailers need to ensure that the store design and standards is the same as its existing stores; otherwise it could lose brand credibility. The retailer also needs to have a clear returns policy.