How to start a pop-up shop
- Henk Herkink
- How to
- 4 Mar 2020
- Edited 22 Nov 2022
- 5 min
Pop-up stores are a familiar sight in shopping streets now. Where retailers go out of business and leave their shops empty, other entrepreneurs temporarily make use of this space. Online shop owners, stocklots traders, and companies launching a new product make clever use of the pop-up store concept.
Its temporary character helps you increase your brand awareness in a short time. You can also use it to test your product. Will it be a success? Customers are looking for real-life experiences, they like to smell, taste, or touch products. At the moment, increasingly more retail space is becoming vacant. How do you open a pop-up store?
Retailers have to keep up with increasing demands. Potential customers not only compare prices. They also crave personal attention, want tailored products, and appreciate engaging experiences. So, now they get a cappuccino while trying on a new pair of jeans. Pop-up stores make smart use of their short-term character. The fact that the store is there for just a limited time creates a sense of urgency. This is the get-it-before-it’s-gone effect.
What is a pop-up shop?
A pop-up shop is a temporary store or restaurant located in an empty retail space for a short amount of time. Such stores often have limited or special products on offer. For example, seasonal products such as Christmas items, orange-coloured items for European or world championships, or merchandise for Formula 1. The pop-up concept can also be used to sell designer brands, shoes, and fashion accessories or to try out a new catering concept.
From online store to pop-up store
These days, pop-up stores are popping up in every big city, including Amsterdam, Rotterdam, and Utrecht. Thanks to the pop-up concept, empty shops are brought back to life. Shopping streets are bustling with people who are curious about the new shops. This is good for the city and for the other shops in the street.
Starting a pop-up store is not easy. There are several laws and regulations you must comply with.
Starting a pop-up shop is no different than opening your own store. There is a lot to consider. You must look for a suitable location and business space. You need to know where your target audience is and what the costs of store design are. And, more importantly, you must understand the terms of the lease contract and know how to negotiate the commercial lease.
How much does a pop-up store cost?
The costs of starting a pop-up shop vary per city and municipality. It not only depends on the duration of the lease of the retail space, but also on the price per m2 (square metre). Even though the number of bankruptcies has been going down in the last couple of years, it is still difficult for property owners to get their spaces leased or sold. In 2020, the total number of bankruptcies declined with almost 15% compared with 2019: from 3,084 to 2,630 in 2020 (source: the Netherlands Chamber of Commerce KVK Bedrijvendynamiek). This means that leasing a pop-up store is a realistic option for the launch of your products.
In addition to negotiating the rent and the terms of the business space, you also have to deal with:
- Payments by debit card, cash, iZettle, or Apple Pay
- Costs for material
- Stock and transport
- Electricity, gas, water
- Costs for licensing
Do: Negotiate the rent of the space and let a legal expert check your lease contract. Set up a financial plan in advance. This is a tool to help you determine if your plans are financially feasible.
Tip! New techniques come with new payment methods. Check out the trends (in Dutch).
Choosing a suitable location
If you have an online shop the entire world can find you. With a pop-up shop, things are different. The focus here is not so much on reaching as many visitors as possible, but on testing the concept of your shop. A pop-up shop is often used as a marketing tool. Finding a suitable location before you set up shop is part of your marketing strategy.
Tips for finding a suitable place for your pop-up store:
- Ask real estate agents and the municipality. They have information on the spaces that are empty or becoming vacant.
- Approach retailers' associations. These networks provide opportunities for joint actions such as promotion and costs for security. Or for joint business representation.
- Get information from sector organisations such as INretail. They know the ins and outs of the market.
- Discuss your plans with others. You might hear from someone else that a premise is empty or about to become vacant.
- Check online specialist networks such as popupplaza.nl (in Dutch), ruimtetehuurtekoop.nl (in Dutch), and loggersconsultancy.nl (in Dutch). They help you find a suitable space.
- Check out train stations in your area. Maybe you can lease a space there. The Dutch public transportation company NS rents out temporary retail spaces at train stations (in Dutch) to entrepreneurs.
Please note: When looking for suitable retail space you must also consider the difference between small and medium-sized enterprises and other commercial spaces. Sometimes a contract for use is applied. A contract for use includes a symbolic fee. The lessor (the party renting the retail space out) gives the lessee (the person leasing the space) the right to use a space and does not aim to make a profit. The downside is that, at a later stage, the symbolic fee can be considered rent instead of right of use. You have to look at the actual situation. Always ask a lawyer or other legal expert whether a contract of use is a good idea in your situation.
When deciding on a location also think about:
- Where you target audience is. Do they live in a small village in the countryside or in a big city?
- Surrounding stores. Are they competitors or do you complement each other?
- Consumer traffic in the shopping street. Consumer traffic, also called foot traffic, is the number of customers who walk through the area. Study the consumer traffic in the area every day for a week.
- A location that fits the experience and essence of your online shop. You are looking for recognisability of your brand.
- The number of m2 that you need.
- How long you want to lease the space; a week, a month, 2 months, or longer?
4 ways to stand out
Before you open your doors, your pop-up shop must look attractive. Remember, you only have a short amount of time to attract attention. You can hire someone to decorate the store for you or you can do this yourself.
How do you attract attention as well as customers? In 2013, Sanne Noorman was one of the first to open up a pop-up store in Horst. She already had her online shoe shop Uppark and was wondering if expanding to a physical store would be a good idea. She used the pop-up store as testing ground for her business. Noorman shares some of her experiences below.
- Use large banners. Cover the entire shop window with a large banner right before opening. It stands out, makes people curious, so they want to see what is inside. You will keep them in suspense. If you spark curiosity, you will likely get many customers at the opening.
- Approach local papers and media. They are always looking for news and stories from the region.
- Use the brand awareness of your online shop. Couple it to the pop-up store. It invites potential customers to come in and see and feel your products in real life. They get to know you and your product. It will make them feel more connected to your brand. This way, you attract the customers who would normally not buy from your online shop.
- Collaborate with existing stores. Create an overall concept and ensure cross-pollination. Display products from other shops in your pop-up store, and vice versa. Customers enter shop A and then move on to shops B and C, and vice versa. An example: working together with a beauty salon and clothes store. The overall concept for Uppark would then be shoes, clothes, and perfume. Make sure the overall concept suits your retail segment or sector. Otherwise, you might lose credibility.
Ready to get started on increasing your exposure? Learn more about successful customer acquisition.