From Nordstrom to Gucci, Why So Many Brands Are Turning to Temporary Retail Right Now

Erin E. Clack
·6 min read

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Since emerging in 2009 as a way to fill mall vacancies amid sky-high lease prices during the Great Recession, pop-ups remain a powerful part of retail. From Snark Park at Hudson Yards to the 14-room Rosé Mansion in New York’s Manhattan Mall, 2019 saw its fair share of viral pop-ups.

And the flash retailing trend shows no signs of slowing down in 2020. In a new survey by the Department of Retailing at the University of South Carolina, more than 80% of 600 retail organizations that did at least one pop-up in 2019 said it was a success, and 58% said they would do another one.

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But brick-and-mortar and hybrid retailers agree that short-term sales are not the main goal of investing in temporary retail. At a time when shopping malls are dying off, pop-ups give online retailers brand awareness while allowing them to connect face-to-face with customers and move inventory. For footwear brands, in particular, temporary retail gives customers the chance to touch and try on product, which can be a deciding factor before investing in a new pair of shoes.

The temporary retail model was the perfect fit for Margaux, a digital luxury shoe brand that prides itself on quality materials and comfort features such as memory foam insoles and styles available in three widths. The brand’s most recent pop-up — which opened in October in Georgetown in Washington, D.C. — has samples of every shoe in every size and width, so customers can find the perfect fit, according to co-founder Alexa Buckley. “[When the store launched], we were overwhelmed with people who came in knowing exactly what they wanted to try on in person before committing to purchasing the shoes online,” she said.

The pop-up has been a huge success, with Buckley reporting that the Georgetown store — slated to remain open through the spring — met its goal for the month within the first four days of operation. “We continue to underestimate the pent-up demand for our product until we introduce ourselves in a physical space in a new city where we are flooded with new customers,” she noted.

As digitally native brands look to scale their businesses and take an omnichannel approach, pop-ups are a low-stakes way to test the waters in new markets. With the short stay, brands don’t have to invest in costly leases and maintain hefty inventories compared with traditional brick-and-mortar formats. It’s a business model that brands like Margaux will continue to embrace in the new decade. “We are a digital-first brand, but going offline gives us the ability to tap into cities where we have densities of customers waiting to try on our product in person,” Buckley said.

When considering temporary stores, the most difficult decision for brands to make is where to open and for how long. “We’ve tested and learned from different structures of pop-ups during weekends, weeks, months and a yearlong stay, and we’ve found a sweet spot at around at least six months to be able to experience multiple seasons and iron out the kinks of a new location,” Buckley said.

Even traditional retail magnates like Saks Fifth Avenue and Nordstrom have set aside square footage for installations in their stores, partnering with both established and up-and-coming brands. In 2013, Nordstrom launched its Pop-In@Nordstrom initiative. The series of themed pop-up shops transition every four to six weeks to offer new brands, shopping experiences and often exclusive merchandise. The platform has been a launchpad for cult brands such as Allbirds, Glossier, Reformation and Everlane to reach new audiences, according to Kayla Marci, market analyst at retail analysis firm Edited.

Customers are kept intrigued by crafting spaces around themes filled with products across different categories (including fashion, beauty, lifestyle, home and garden, and sports) or through partnerships with top brands. “In 2020, we can expect to see cult brands continue to use the resources of a more established business to reach new markets,” Marci noted.

Still, keeping the pop-up model fresh in 2020 remains the biggest challenge. Short-term spaces allow for more experimentation, and customers want to be wowed. When envisioning the store of the future, robotic sales assistants and delivery drones typically come to mind. While there have been advancements in those areas, they have yet to integrate fully within the retail landscape, Marci said.

But brands are trying. Gucci is launching a series of pop-ups called Pin across Paris, Seoul and Hong Kong between January and March that will focus on augmented reality and interactive consumer experiences. “Advanced tech will still play a crucial role in future brick-and-mortar businesses, but a human element is required to bring focus to the customer,” Marci adds.

Instead, the retail renaissance is all about the customer experience, according to Mark Rosenbaum, principal investigator of the University of South Carolina survey. “We found that pop-ups are largely being used by brands to engage with customers and create visibility in ways not possible through other channels,” he explained. “Pop-ups are no longer about one-off promotions, sample sales or selling off excess inventory; they are about creating customer communities, instant and measurable buzz, and personalized experiences that require a physical presence.”

Indeed, as the retail industry continues to grapple with bankruptcies and sweeping store closures, experiential retail will remain a driving trend in 2020 as companies look to build buzz and capture consumers’ attention. “From #revolvefest at Coachella to the Virgil Abloh x Ikea Fitting Rooms at London Fashion Week, 2019 featured numerous brand activations, temporary installments and in-store sensory experiences [that will inspire] upcoming events,” Marci said, adding that combining fashion and food was another notable trend.

Saint Laurent and Jacquemus opened eateries, Celine and Fendi created branded treats, and Gucci announced plans to open a restaurant this year in Los Angeles. “With the fall ’20 runway shows kicking off, designers will continue to explore and innovate with these concepts to generate hype alongside their latest collections,” Marci said.

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