China’s Pop-up shop has become brand marketing’s new favorite

6 min read 

On April 28th, a pop-up shop called Orz Cha which only opened for four days debuted in Shanghai. Because of its ultimate “demotivation” culture, it matches daily sadness white-collar workers. Pop-up shop triggered a long queues at the scene and numerous sharing in moments of WeChat.

Pop-up shop has no intention to open for long term. It is a temporary store that conducts marketing and brand exposure in short time. The common features are imaginative expressions, sincere words and frequent interactions with consumers. Nowadays, pop-up shop is no longer a new thing and more and more of them appear in the hot business circles of big cities.

In Europe and America, numerous brands have planned the pop-up shops. Pop-up shop has excellent sales effect, so even high-end luxury brands are willing to condescend to have a pop-up to interact with consumers. In 2004, Japanese designer Rei Kawakubo opened a pop-up shop named Comme des Garcons, which directly drove more than 30% of sales growth in that year.

According to the report, China’s pop-up shops started from 2012 to 2014 and entered a rapid growth period in 2015. Its average annual compound growth rate exceeds 100%. And the number of pop-up shops is expected to exceed 3000 in China in 2020. In addition to pop-up shops planned by the brands, there are also specialized pop-up shop brands which specialize in this business. Two of these brands are POPEX and Popup Union.

Zhiguo Dong, the founder of Popup Union, ever worked in a number of real estate enterprises. In H2 of 2015, when he helped a brand to do activities, he sensed a business opportunity — the pop-up shops. He believes that the innovative brand of consumption upgrades and modern business promotion rules are uncoordinated, while pop-up shop is a very good solution to it.

Vincent, the founder of POPEX, came from Malaysia. He wants to apply the Airbnb model to commercial real estate and to overturn traditional patterns which is solidified. “About one and a half years ago, more and more e-businessmen started to think about opening offline pop-up shop so as to attract flow and to get exposure. And in this year, there is a near-explosive state. The online flow bonus is gradually disappearing, so the real estate and the brand have come to one point, which is combining online and offline together. ”

Shopping center faces the crisis of leaving unused

CBRE: Global Shopping Centre Development Viewpoint shows: in 2016, another 12.5 million㎡shopping mall in the world, a year-on-year growth of 11.4%. China has 5.75 million ㎡shopping mall, which is the largest one in the world, and the number of large and medium sized shopping centers exceeds 4000.

On the surface, the shopping center opens one after another and the figures of building area and activity index maintain high. But in fact, there are many chronic drawbacks accumulated inside. On the one hand, commercial real estate projects are supplied in a centralized way, making brand resources scarce and investment and management difficult. On the other hand, the impact of e-commerce and the undesired of consumers has led to low profits, high vacancy rate and even increasing business failures for several years.

In contrast, pop-up shops have obvious short-term rental characteristics. It could occupy the vacant space in shopping centers as well as help the brand to avoid high rents and to relieve long-term profitability pressure. According to RET report, the rental period of the ordinary brands is about 3 years, that of major stores is 8 to 10 years, while that of 65% pop-up shops is within 10 days and that of 86% pop-up shops is within a month. This mobile brand replacement ensures the sense of freshness mall has towards consumers and drives consumers to shop there more frequently.

Moreover, pop-up brands usually have the extremely strong promotion power. Its sense of freshness reflects a highly cost-effective characteristic in attracting customers. According to data, a high-quality pop-up shop has as good consumer attracting effect as one IP exhibition, 2 cinemas or 6 chain restaurants. In the low sales season, pop-up shops can play a certain activation role and could bring more customers to shopping malls.

Innovative brand goes offline

From June 14th to July 23rd, POPEX started its first joint pop-up store in Shanghai Yue Hui Plaza. Its theme was Summer Love. Brand participated in included Three Squirrels, Dolce Gusto, Oxygen Underwear, kobold, Yi hats, etc. It’s targeted at young women.

Most of these brands were new ones. Before, they had few offline promotions and some were not famed. Through pop-up shops, these brands could have access to hot business circle as well as contact existing and potential consumers.

For new brands, entering pop-up shop can drive their incubation, carry on integrated marketing, and make it realize rapid growth. For example, Popup Union not only provides the brand with programming plan, online operations and overall marketing programs, but also offers final report and data. In this way, brands could clearly know how many consumers walked in, how long they stayed in the store, what SKUs they picked up and what they paid in the end.

Create scenes and enhance experience and interactions

Some views point that “in the past, consumers spent money in department stores. But in malls, they spend time. How to extend average time consumers spent in the mall is exactly what malls should do. And to build a good experience is an important part of this goal.” If the brand is upgrades and replacement, service grows from nothing. Service has become the main driving force to pull China’s consumption growth.

“The so-called experiential marketing is to have users contact products and to know the product’s quality, culture and ideas. Offline scene is more vivid to realize this goad,” Vincent told Netease technology.

The consumer sees the goods, feels the service, contacts environment and has impression. All of these are part of the shopping experience. Pop-up shop values visual effect and interactive experience. It utilizes bright color, layout sites elaborately and sets interactive links, all of which are admired by consumers.

The future of pop-up shop

At present, the pop-up shop on the market is seemingly driven by innovations and new concepts. But in fierce business competition, can such forms last? The founders have a clear thinking and planning for the development and future of pop-up shops.

“I think the pop-up shop in the future will have two types,” said Vincent. “One uses gimmicks, fads and creative ideas to attract people. But the volume may not be large, because ultimately, it is bound to return to the business essence. The other kind of pop-up shops also have some gimmicks, but mainly for short-term marketing. It wishes consumers could experience and understand the brand on the site. In the future, in addition to the existing commercial real estate business form, pop-up shop will have a new normal form, which is to become one of the new retail channels.

Dong defines Popup Union as a commercial wework. He intends to work on sharing business. Popup Union 1.0 operates online matchmaking transaction. In its 2.0, it operates collection shop of pop-ups and in 3.0, Popup Union will operate sharing pop-up shops. In 3.0 stage, Popup Union values operation and scenarios and could have brands only bring packages to settle in. In this way, brand only needs to do two things, namely, bringing its best products and selecting a most suitable SKU to settle in. “We are not a collection store competing products, but a shared concept about brands.”

This article originally appeared in NetEase Technology and was translated by Pandaily.

Click here to read the original Chinese article.

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