What Can Kanye West Teach New Zealand About Retail?

What Can Kanye West Teach New Zealand About Retail?

These days it seems like everyone in the world has a pop-up shop at some time or other.

In the US, Gwyneth Paltrow once popped a store for her Goop clothing line, and Kanye West in August launched a pop-up shop to sell apparel linked to his recent album, The Life of Pablo.

Over in London, the assemble-it-yourself furniture retailer Ikea popped up a DIY restaurant and food storefeaturing a virtual reality kitchen booth and a space for cookery-themed workshops.

Then, of course, there’s Amazon, which plans to open dozens of pop-up stores in US shopping malls over the next year. The pop up stores focus on selling Kindles, Fire TVs, Echo speakers and accessories as part of a broader strategy to drive traffic to Amazon’s online store using a mix of kiosks and even a physical bookstore in its hometown of Seattle.

The pop-up store concept isn’t new, but the term seems to have formalised in 2002, when the US retail chain Target turned a moored boat into a christmas season shopping destination on the Hudson River shore of New York City. An entire industry has grown up around pop-up stores since that time, with companies that specialising in designing pop-up spaces and connecting landlords to temporary tenants.

New Zealand has apparently been a little slower to the pop-up game than other countries. But the circumstances are similar. Customers shop online and off here, too. Retailers have less call for a lot of permanent brick-and-mortar stores. Commercial spaces go vacant.

Retail vacancy rates in New Zealand seem to be high. Auckland’s rate this year went up to almost 4% compared to 2015, while Wellington’s fell, but continued to hover at over 7%. New Zealand realtors and pop-up specialists are pushing the pop-up concept as a low-risk venture to satisfy income flow for landlords and retail demand for businesses that don’t need or can’t deal with the capital expense of a brick-and-mortar shop.

“Retailers can take a gamble on a new location or a new product, and dare to be creative,” Bayleys national commercial director John Church told Stuff. “Pop-ups are equivalent of taking a car out of a test drive.”

Companies like Sharedspace and Pop Up Now have emerged in the last few years with services devoted to locating, brokering and fitting out temporary retail spaces in New Zealand. The question is why would you need one and how complicated is it?

Businesses use pop-up stores to test a potential revenue stream, to give customers the opportunity to check out products in person, to clear inventory, to increase sales approaching a busy shopping season (namely, Christmas), and to drive consumer action using a physical and tactile experience, a “brand activation” effort where one-off sales are not the point.

If a company is looking to grow its customer base in a new geographic area, or solidify its brand in the minds of potential customers, or measure the viability of a brick-and-mortar strategy, the pop up store may be a good idea. A pop-up shop represents a short-term operating expense, and in New Zealand, the rise of pop-up consulting services makes it easier for retailers to find an appropriate space, coordinate utilities and services, and customise interior spaces.

Click here to learn how Cin7 easily suits a pop-up store strategy.