Shopping in the Real World: Pop-Up Shops vs Traditional Retail

Online shopping has changed nearly everything about retail, but for some product categories, nothing beats the in-store experience for introducing consumers to a brand and its products.

“Pop-ups can take many forms, including booths, kiosks, or compact freestanding stores” notes a shopify.com article. As a retail space that’s open for only a short period of time, a pop-up shop can be a great solution for brands looking to enter new markets, launch products, or market to new audiences without the risk associated with establishing a permanent presence. Brands can also offer pop-ups in response to seasonal demand or trends, or to test the waters for future retail locations.

For consumers, pop-ups offer “a unique and experiential approach,” says a mailchimp.com article. “The rise of pop-up shops is a strategic response to changing consumer preferences, demanding more personalized and immersive shopping experiences.”

So which option is better for your brand: a pop-up or traditional retail — or both? That depends on your goals, target audience, and financial backing. Here are some important considerations when it comes to cost, risk, flexibility, and brand awareness.

Cost and Risk

Pop-ups are generally less expensive than traditional retail. Setting up a bricks-and-mortar store carries considerable overhead, which makes entering new markets risky, especially for small brands. Some estimates put the cost savings as high as 80%. “This affordability enables businesses, especially emerging or online-first brands, to establish a physical presence without the financial burden associated with permanent retail locations,” says mailchimp.com.

Traditional storefronts require leases measured in years, which is a huge commitment of resources. Pop-ups stick around for as little as a day or as long as six months, a considerably smaller commitment and lower risk.

Pop-ups are usually smaller than traditional stores, so rent tends to be much lower. Because they carry less inventory, pop-ups also don’t have the storage costs associated with a long-term presence, notes thestorefront.com. Overhead is just lower overall — “Expect to spend less on inventory, staff, cost of rent and utilities, etc.”

Pop-ups are also well positioned to take advantage of economic shifts: “Higher-than-average vacancy rates in chi chi neighborhoods, malls and typically permanent storefronts have helped brands get great rates at prestigious addresses,” says thestorefront.com.

Pop-ups are an opportunity to try something new. The relatively low cost of a pop-up makes experimentation less risky. A brand can afford to adjust its marketing and merchandising strategies to nail the perfect connection with a target audience. “A temporary shop can help you validate demand for however you’re expanding before you permanently invest in it,” says sav.com. A brand can use pop-up shops to test out different pricing, merchandising, sampling, and bundling options.

Pop-ups can support your traditional retail. A pop-up shop can be not only a great way to introduce new products, but also a clever means of moving old inventory, notes shopify.com. Creative displays, special deals, and product bundling can encourage consumers who are new to your brand to make an impulse buy and entice existing customers to give older inventory another look.

Even with a pop-up, location matters. While the opportunity to choose a location without commitment seems like a win, the challenges of selecting a location for a permanent storefront still apply when it comes to pop-ups. “Selecting the perfect location is paramount for attracting foot traffic and ensuring visibility,” says a recent medium.com article. “An ill-chosen spot can leave your pop-up shop languishing in obscurity.”

Flexibility and Experimentation

Pop-ups bridge the digital and physical experiences, allowing brands that launched online first to offer a bricks-and-mortar experience and allowing traditional retailers to expand into new markets and concepts, according to mailchimp.com. This gives pop-ups several advantages for both consumers and brands.

In-person experiences lower the risk for consumers. For industries like beauty and food and beverage, pop-ups offer the in-person experience customers don’t get online, which may lead them to buy where before they hesitated. Trying before buying, such as by sampling at a pop-up, reduces the risk for consumers.

A brand can also use pop-ups to experiment with different retail formats. A pop-up is less of a commitment than a permanent location, so brands can try different retail spaces to see what size, location, or format (e.g., standalone, kiosk, food truck, store-within-a-store) works. Brands can also open pop-ups at certain times of year to find out what resonates with their audience. “The inherent transience of a pop-up allows you to A/B test different concepts, something that e-commerce brands are already doing all the time on their websites,” says fuseinventory.com.

Pop-ups create buzz and FOMO. Every business generates a certain level of buzz when it first opens. But whereas traditional retail locations lose that cachet after a while, pop-ups are temporary by design, so they maintain a sense of urgency and novelty that draws foot traffic, says a blog post on sav.com. Customers know that if they don’t shop before the pop-up leaves, they’ll miss out. “Scarcity and word of mouth marketing are both powerful drivers of brand awareness. Pop-up shops combine both of them to get people talking.”

Brand Awareness and Connection

Physical locations allow for more personal connection. For online-only brands, pop-ups create a way to connect with customers in person — something that’s always been built into the bricks-and-mortar retail experience. “Online-focused businesses often miss out on the relationships with customers that a face to face interaction combines,” explains sav.com. A pop-up can be a way for an online-only brand to forge those relationships.

A pop-up allows online-focused brands to offer a multi-sensory experience. A pop-up shop is an opportunity to let your target audience not only sample and buy your products but also experience your brand’s personality, values, and vibe firsthand. “This makes pop-up shops a great fit for beauty products, gifts, candles, baked goods, and other products that rely on sensory experiences.”

Your pop-up needs to make a splash quickly. The buzz and FOMO of pop-ups comes at a cost: marketing strategy must account for the temporary nature of the pop-up by hitting the market hard and fast. “The transient nature of pop-up shops creates a sense of urgency but also the risk of failing to capitalize on this brief opportunity,” says medium.com.

Traditional retail lets brands build recognition over time. A traditional store, with a longer life span and established presence, can foster longer-term, deeper connections with customers. Traditional retail can integrate itself into the fabric of a community in a way that pop-ups don’t have time to do.

Traditional retail spaces allow room for more products. By its very nature — smaller, shorter-term, light on storage — a pop-up usually offers only select products. For a brand with a wide array of flavors, colors, sizes, or other options, this can feel limiting. Traditional storefronts, on the other hand, have room to display and sample a bigger range of what your brand has to offer.

Ultimately, whether a pop-up is a smart move for your brand depends on many factors. But for online-only or online-focused brands, a pop-up strategy can allow a brand to experience all the benefits of a more permanent presence without the long-term commitment.

Promobile Marketing is a dynamic experiential marketing agency based in New York City. For over a decade, Promobile Marketing has collaborated with a range of brands—from budding startups to major CPG brands—on immersive marketing campaigns. Get in touch to discuss your next project.