As the holiday shopping season approaches this year, you might be thinking about how to attract shoppers and increase sales for your business during this time of year.
What is a Pop-Up Shop in the Holiday Season?
The concept of a pop-up shop is not new. Think back to your childhood and your first experience with making money. Many of us may have set up a lemonade stand, which, in its simplest form, is a type of pop-up shop. You start with a table and very limited stock, and once you’re done selling, you close up shop and take down the table, and your lemonade sales are over.
Pop-up shops during the holiday season are any temporary and short-term business events that take place during the winter holiday season. This business strategy is used to build brand awareness, test new markets, and increase sales. In fact, according to Capital One Shopping, temporary retail spaces generate about $80 billion in annual revenue, and 80% of retailers who opened a pop-up shop considered it a success. It’s an effective way to promote new products, engage with shoppers, and build your customer base, all while keeping operational costs low.
Reasons to Host a Pop-Up Shop During the Holiday Season
Pop-up shops can pop up anywhere – in farmers’ markets, shopping malls, within other businesses, and thanks to the success of food trucks, even in mobile vehicles. Anywhere you can imagine selling your goods can typically be turned into a pop-up shop.
Here are some other reasons to host a pop-up shop during the holiday season:
Increase Your Online Brand Awareness
After Cyber Monday sales are over, you may want to consider hosting a pop-up shop, especially if your business is primarily online. Physical shops are a great way to add a human element to your brand and interact with customers in person.
Many shoppers still prefer to see and touch items before buying, and running a physical pop-up shop allows shoppers who may be hesitant to buy online to experience and test out some products. Pop-up shops can also be an easy way to attract new customers who may not have encountered your brand online.
Last-minute holiday shoppers tend to go to stores and malls to purchase gifts instead of browsing online. Having a pop-up shop also allows you to get to know your customers in person and build stronger relationships, which in turn fosters customer loyalty after the temporary store and holiday season ends.
Test a New Revenue Stream
The great thing about running a pop-up shop is that there are limited costs associated with it compared to setting up a permanent store. According to a survey by Storefront, 44% of businesses that opened a pop-up shop spent less than $5,000 to run it. This makes it easy and less financially risky to try out new revenue streams as well as offer new products and experiences.
If you’re running a new business at the beginning stages, setting up a pop-up shop is a good way to gain experience opening a physical store and see if you want to implement a multi-channel sales strategy. A pop-up shop provides a great opportunity to validate your product concepts and ideas without the commitment of a permanent store.
And the holiday season is notoriously busy. You will encounter a variety of customers during a time of year when shoppers are most likely willing to purchase gifts and products they might not usually buy. This is a positive, as you’ll be able to gather a diverse sample of shoppers to provide feedback on your products.
Increase
Sales
Perhaps the most compelling reason to consider a pop-up shop during the holiday season is the increase in sales. The temporary nature of pop-up shops naturally creates a sense of urgency among shoppers.
To create this sense of urgency, inform your customers when your pop-up shop starts and ends. Or maybe a limited inventory means that the pop-up shop will close as soon as your items run out.
Having a pop-up shop during the holiday season heightens shopper urgency even more, as they are aware of the exclusivity of seasonal products.
In order to continue selling even after shoppers leave your pop-up shop, you might consider using the email cart feature in Shopify POS. Email carts are equivalent to abandoned cart messages for in-store shopping. Use them to convert shoppers who visit your pop-up shop without purchasing anything into paying customers.
Reducing Seasonal Inventory
Pop-up shops can help spotlight old products. If you need to boost sales of seasonal or holiday inventory, especially before the end of the year, consider setting up a pop-up shop. New display offers and enticing visual merchandising can attract different shoppers. You might think about offering special deals, such as buy one get one free, or bundling items together to encourage impulse purchases.
Capitalizing on Peak Shopping Season
According to the National Retail Federation, winter holiday shopping is the third most popular seasonal event where consumers spend the most. In fact, the holiday season is so crucial for retailers that it accounts for over a third of annual sales revenue for certain product categories. If you’re not taking advantage of this heavy spending season, you should. You’ll reach new customers who are ready to buy, increase your sales during the holiday season, and perhaps sell out seasonal inventory.
Connecting with the Local Community
Meeting new customers when everyone has a warm, happy holiday feeling is a great way to connect and engage with the local community (and increase sales). Creating a local holiday pop-up shop is a fantastic way to attract local shoppers to your business. 35% of consumers shop local because they want to invest in their community. You’ll be able to build customer relationships that last even after your pop-up shop is over, and happy, loyal customers lead to brand promotion.
Reaching New Customers at a Lower Cost
The cost of acquiring new customers online ranges from $45 to $50, while the cost of acquiring new customers in a physical retail space is $10. Hosting a pop-up shop during the holiday season is a great way to penetrate a new market or area where your target customers live or gather, all while keeping your costs low.
Additionally, your brand will be introduced to more people, increasing brand awareness and boosting trust in your business. You can also use your pop-up shop as an opportunity to grow your email list. This way, you can continue to nurture customer relationships after your pop-up shop ends and turn shoppers who visit the pop-up into repeat online customers for less than you typically spend to acquire new customers online.
Testing New Pricing and Promotional Strategies
Peak shopping times are great opportunities to test new pricing and promotional strategies. You can experiment with different retail pricing strategies for new products and promote special offers for a limited time to encourage shoppers to buy from your pop-up shop.
You can
Try some of the following promotional strategies:
- Create bundled products for cross-selling and upselling, which ultimately increases average order value
- Buy one, get one free offer
- Discount for new customers
No matter what experiments you undertake, it is important to ensure that the discount strategy does not negatively impact your retail profits.
Try New Products
The more eyes and feedback you get on new products, the easier it will be to determine whether you are buying or creating the right goods for your target market. It will also help you gain insights on how to improve your products.
Use your pop-up shop during the holiday season as an opportunity to gather immediate and helpful feedback on product performance among shoppers. This way, you can assess appeal before investing more money into developing a new range or stocking a new brand.
How to Open a Pop-Up Shop During the Holiday Season
Now that we’ve discussed some reasons why you should consider hosting a pop-up shop during the holiday season for your business, we will provide some tips on how to create a successful pop-up shop.
Focus on What to Sell
Your pop-up shop during the holiday season doesn’t have to be large. It can be the size of a single table or kiosk. However, it’s important to focus on selling a limited number of products, perhaps those that fall under a specific theme, are suitable for the season, or best represent your brand.
Another thing to consider when determining what to sell in your pop-up shop is the cost of the products. If you want to reach the largest number of customers and increase awareness of your brand – and clear out your seasonal inventory – choose affordable products that can stimulate impulse purchases. The idea here is to convert browsers into buyers, especially at a time when shoppers typically need to make multiple purchases while sticking to a holiday budget.
Set a Budget and Stick to It
Plan your pop-up shop in the same way you would plan any business. This includes setting a budget and adhering to it. Some things you’ll want to consider include:
- Cost of renting the space and utilities
- Furniture, including tables, chairs, and lighting
- Trade materials, such as decorations, signage, paint, and product displays
- Inventory
- Marketing and promotion
- Payment, including point-of-sale systems and credit card fees
- Insurance, depending on the size of your pop-up shop and how long it will run
Selecting a Location to Host a Pop-Up Shop During the Holiday Season
As mentioned earlier, pop-up shops can appear anywhere. During the holiday season, you should be cautious about where you host your pop-up shop and how that will affect your business. Whether you’re popping up in your local neighborhood or trying out a new area that has been successful online, it’s important to position your pop-up shop in a high foot traffic area. This will increase the likelihood of people passing by your shop as they happen to be in the vicinity. If you’re hidden away or set up in an area where people are unlikely to be shopping and willing to spend money, it will affect sales.
Based on your budget and resources, there are several types of pop-up shop locations you can consider:
- Pop-up shops in stores
- Seasonal markets
- Rented commercial spaces
- Virtual pop-up shops
Determine How to Sell
Order fulfillment is another important part of hosting a pop-up shop during the holiday season and can vary based on your storage capabilities and inventory levels. Offering a variety of order and delivery options for shoppers, in the same way you do online or in-store, can help enhance customer satisfaction and loyalty. Here are some order fulfillment options you can try:
- Endless
- Aisles is the same as buying in-store and shipping to home, but it also allows you to sell out-of-stock items through drop shipping. You can use your pop-up shop as a showcase where customers can shop from the limited in-store inventory and choose to ship products from your warehouse to their home or preferred delivery address.
- Buy online, pick up in store (BOPIS) is a popular order fulfillment option that helps reduce shipping costs for you and your customers. This is commonly used by retailers, but you can also give it a try in your pop-up shop. Shoppers can browse and place an order online and pick it up at your temporary store. This way, they will receive their order faster, and there’s a chance they will increase their order size by purchasing additional items while picking up their order.
- In-store browsing and purchasing is the traditional retail shopping experience, but it depends on having enough space to house inventory in your pop-up shop. This cannot be relied upon exclusively, especially if you have limited inventory and/or limited square footage for your pop-up store. Offering an in-store purchase option and shipping it home can be a way to deal with small space, achieve higher in-store conversion rates, and improve customer retention rates.
Defining How to Process Payments
Whatever the sales method – online, in-store, or in your pop-up shop during the holiday season – the checkout process should be as seamless as possible. Losing a shopper moments before they turn into a paying customer is not only frustrating but can also affect your profits. For this reason, it’s important to use a flexible point of sale (POS) system that allows you to accept a wide range of payment options in retail, including payments by credit and debit cards, and contactless payments.
Source: https://www.shopify.com/retail/holiday-pop-up-shop
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