What is a Pop Up Shop and Why Should DTC Brands Open one?

DTC Path to Physical Retail: Pop-Up Shops and Why They Matter

May 10th, 2022 Insights

After an entire decade of pundits lamenting the death of the storefront—and blaming ecommerce darlings in the direct-to-consumer space for its fall—in-store retail is coming back stronger than ever. Something we’ve discussed over recent months, DTC brands have spurred a retail renaissance and are using their spaces to provide guests with something unforgettable.

Following our last articles on the clicks-to-bricks movement among direct-to-consumer brands, we’re today going to look at one of the most likely retail spaces that a DTC brand may build—the pop-up shop.

So, what is a pop-up shop, why should you consider one, how do you choose a location and what do you need to make it pop? We’ll explore all this and more below.

Note: This is part of our much larger clicks-to-bricks series. Be sure to check out the rest of our posts on moving a DTC brand from digital to physical:

And stay tuned for the rest of our series by signing up for our email list!

And be sure to check out part two of this series on selecting and furnishing a pop-up here!

The Pop-Up Shop: Temporary, Bold & Memorable

It might not be there forever, but it’s an important step in building a retail presence. The pop-up shop offers retailers the freedom to test a location, build hype about your brand, and connect with customers both new and old.

What is a Pop-Up Shop?

Vans Vault Ralph Steadman pop up exhibit by custom manufacturer Morgan Li

In simple terms, pop-up shops are temporary retail spaces. Whether they are there for a weekend, a month, a holiday season, or a quarter, pop-up shops are built to exist for a set time.

Like a flagship, the pop-up store is built to be engaging, unique, and memorable. It might be the first time that shoppers have the chance to see your products in person before buying, so everything from merchandising to displays need to communicate who you are and how you want guests to feel.

From dedicated spaces built to house pop-ups to short-term rentals, there are many ways to approach a pop-up launch, and from dedicated fixtures to rentals, there are many ways to furnish it.

Six Reasons to Consider Opening a Pop-Up Shop

It might be your first retail space, it might be your approach to testing out a new market, but DTC brands like yours serve to gain a whole lot from choosing this path. From affordability to exclusivity, pop-up shops offer a wide range of benefits to brands including the following:

Show Off the Goods

As discussed earlier, a pop-up may be the first time that customers see your products in real life. Yes, your current customer base may know and trust you for delivering high quality goods and know what a product looks like in their home, but having the opportunity to show off your products in a controlled space can take this experience further.

Tell Your Story in a New Way

Pop-up shops aren’t only about your products—they’re also about you. In their guide to opening a pop-up shop, Storefront author Arielle Crane views pop-ups as a way to tell your story. Product demonstrations, displays, and events give you the ability to build authentic connections and tell your story the way you want it to be told.

Exclusivity, Scarcity, and Product Validation

Pop-ups are built around scarcity. Not only will a time-bound space drive people to visit before the shop closes, but a well-timed promotion could also build hype around a certain product line.

Whether you use a pop-up to establish your brand, use it to unload extra stock, or use it to highlight something new, 55% of customers cite “unique and exclusive products and experiences” as a reason they shop in pop-up shops.

And it’s not just a good way to unload current stock, it’s a good way to test out new products. Said best by Shopify, “One of the most important things for a new business to do is validate demand for its products—and real product validation only happens when money changes hands.”

Manufacturing a small test run of products to be sold at a pop-up shop can provide you with insights on how said product might perform on a larger scale before you decide to commit fully to making this product.

Affordable Customer Acquisition & Market Testing

You already know that customer acquisition costs continue to rise for ecommerce brands. But maybe you don’t want to take on the risk of a full-on flagship store. Pop-ups offer a perfect middle ground.

First, they allow you to shift some of your ad buys from conversion-focused to awareness. Locally-focused CPM buys are cheaper, allowing you to generate more hype in the lead-up to launch.
Second, it’s easier to collaborate with local media than it is to generate hype on a national scale.
Third, the pandemic and associated lockdowns caused rents to plummet and CAC to skyrocket. Ben Seidl, Founder & CEO of Neyborly believes that physical impressions may soon become more affordable than digital ones.

And it’s not just that pop-ups are more lucrative than digital-exclusive offerings. They’re less risky than flagships. When you can rent a space for three months instead of one, two, or three years, you can make sure that the location, design, and merchandise will do what’s expected before making a full commitment.

Finally, pop-up stores give you the freedom to test a space that might not be in your wheelhouse. Instead of choosing the trendy neighborhood or high traffic areas as you would a flagship, you can use pop-ups to see if a store off the beaten path may succeed instead.

Connect with Shoppers

Perhaps the biggest benefit of the pop-up? Connection. Physical retail connects you to the community. It connects you with your current customer base. And it connects you with potential shoppers.

From customers who might see you for the first time to loyal advocates, a pop-up offers you a way to engage both. The same study that found customers preferring pop-ups for unique experiences also found that these stores give them the opportunity to shop locally and receive a more personalized shopping experience.

Generate Hype

The final benefit to launching a pop-up shop is the hype that it generates. In the months leading up to the event, you’ll have the opportunity to advertise the shop, the exclusive offerings, and the timeframe. Not only will this generate FOMO—fear of missing out—you can also expand your targeting. Instead of buying for your target market, you can expand who you reach in a local market.

There are so many ways to build hype around both your store and your brand.

An email campaign meant to reward current customers with an in-store discount.
A locally-focused media campaign and press event.
Influencer and media pre-launch parties.
Ongoing events during the life of the pop-up.
Immersive experiences.

And it’s not just in the weeks leading up to the event either. Pop-ups—especially experiential and immersive ones—are great at driving word of mouth throughout the life of the shop.

User generated content is more effective than branded photos. Bazaarvoice found that more than two-thirds of shoppers prefer real customer photos of brands, not just on display or professional shots. And when people talk, good things happen.

But… there are so many things to consider. From location to design, you’re not going to want to miss part two of this series, featuring tips on how to succeed.

BRING YOUR DTC BRAND INTO THE PHYSICAL WORLD WITH MORGAN LI

At Morgan Li, we transform spaces. Whether that’s a traditional big box or a rapidly growing direct-to-consumer brand, you need a partner who knows the bricks-and-mortar space. That’s where we come in. With eight decades of experiences in retail, and some of the biggest names in DTC on our list of partners, we deliver your vision on time and on budget.

Over the past few years, Morgan Li has worked with DTC players across the nation to provide fixtures, furniture, and graphics built to provide guests with an unforgettable place to shop.

Startups and expanding brands like Brooklinen, Away, The Sill, and more have all trusted us to build unforgettable shopping experiences during their push to open physical retail spaces. Here are just some of the projects we’ve completed:

Luggage brand Away turns to Morgan Li for Dallas, Houston, and Boston
Brooklinen launches Brooklyn flagship with help of Morgan Li
The Sill enters Chicago and trusts Morgan Li to create the space.
From curated delivery app to corner store, Foxtrot works with Morgan Li in rapid expansion.