By Elise Dobson
Opening a Retail Store
Setting up and running a retail store requires a lot of effort. Investing in a location, estimating utility costs, and decorating the space… all of this represents a significant commitment. With rising rental prices in many cities around the world, it also represents an expensive commitment.
This is part of the reason why many small businesses turn to other options, such as food trucks and pop-up shops – which have grown in popularity in recent years. They are particularly popular with e-commerce brands looking to test the waters in physical retail without the commitment of a long-term lease.
But instead of hosting your pop-up shop in an empty mall, consider joining a retailer with a store within a store. This concept is a win-win for both the visiting brand and the host. Here’s how to do it.
What is a Store Within a Store?
A store within a store happens when a retailer partners with another brand to sell its products inside their store. Think of it as a pop-up shop hosted inside a store in another location.
Also known as a pop-up store, where you take a small section inside a recognized grocery store, supermarket, or boutique. The host opens a small portion of their floor space for a rent or a percentage of sales.
How Does a Store Within a Store Differ from a Pop-Up Shop?
If that sounds very much like a pop-up store, that’s because it is. The main difference is that your store exists inside another store. It’s a small distinction, but it can make a big difference for your brand.
The advantages of stores within stores over pop-up shops boil down to two points. First, opening your shop within a recognized retail location means that you have an embedded marketing partner. Both parties benefit from increased foot traffic and drawing customers in to linger for a while.
Selling from an existing store also means that you are not responsible for furnishing an entire space. Working with another retailer (instead of the landlord) offers greater flexibility regarding lease terms and a lower rental cost. Your temporary store can be opened for certain seasons or short periods to boost sales or launch new products.
Without the cost of short-term rent, utilities, and other expenses, it becomes affordable to keep a store within a store open for longer. Benefits of Stores Within Stores.
Access to a New Audience
Opening your store inside an existing retailer immediately provides your business with a new, targeted, and engaged audience. By choosing your host wisely (we’ll discuss that later), you can ensure that the audience of your embedded pop-up store expands your reach and leads to meaningful new customer relationships.
Having a physical location lends you credibility in the real world. A pop-up store also generates buzz and awareness by exposing you to people who may not be familiar with your business. Daniel Foley, marketing and SEO specialist at Emma Sleep.
Engaging with Customers in Traditional Stores
With the rise of fast and free shopping, personal shopper requirements boil down to one word: convenience. Use your store within a store as a means for customers to pick up products in person, especially if you run your business online and conduct most of your sales through e-commerce.
Customers shopping in traditional retail stores have the chance to immerse themselves in your brand more than their digital counterparts. A pop-up store not only provides you access to the host’s audience – but also the more engaged part of it.
For example, Sephora partners with JCPenney to provide the ability to buy online and pick up in-store (BOPIS) across both brands. Marvin Ellison, chairman and CEO of JCPenney explains: “We’ve launched the ability to buy Sephora online and pick up the order at a JCPenney store the same day. This is one example of how we are meeting customer expectations for accessibility and convenience.”
Leveraging
From Existing Foot Traffic
While the COVID-19 pandemic temporarily halted foot traffic in retail stores, traditional retailers are now showing signs of growth. According to Adentro, July 2021 saw a 43% increase in monthly foot traffic to physical stores, a figure that remained high at 28% for the rest of the year.
Whether you are opening a pop-up shop inside a major retailer like Nordstrom or a small local boutique, you have a head start when it comes to foot traffic. When you open a pop-up shop, the existing traffic is already there thanks to the host’s marketing efforts.
Personal Selling Experience
There’s a lot of talk about the fate of retailers as e-commerce takes a larger share of the market. But for many e-commerce brands—even large online brands like Wayfair—physical retail stores can offer significant benefits to customers.
If you are running a successful online business, you might be looking at a physical retail space as a way to experiment with multichannel retailing. A store-in-store can help you test the waters of physical retail before committing to a long-term commercial lease.
We had the opportunity to pop up in other businesses before launching our retail store; it was a great way to build awareness of our brand and gain customers before opening. Kate Collins, Founder of The Tare Shop
Diversify Your Reach
With a pop-up shop, you have the flexibility and cost-saving advantage to appear not just in one store but in multiple stores in your area. Expand and diversify your customer base at the same time.
Additionally, with a store-in-store, you can strategically test the waters at each location to see if it’s suitable to open a permanent retail location there. Save money and pressure by leasing commercial space you already know will be in the right place.
Capitalize on Seasonality
Seasonal businesses face different challenges than regular retail stores. By opening a temporary pop-up shop, you have the freedom to exploit seasonal fluctuations and events to boost sales.
Do you have a popular swimwear line? Add a pop-up shop at the beginning of summer as part of your summer marketing strategy. Is there a major festival happening downtown? Plan a pop-up shop for the week.
As you’ve seen, we recently launched with Nordstrom at Pop-In@Nordstrom, which will run until November 1! We are very grateful to Nordstrom for this opportunity and for including us alongside many Black-owned brands.
Experiential Retail Testing
Modern shoppers are not just visiting stores to buy products. They choose personal experiences over online shopping for this very reason: the experience.
Experiential retail is all about creating memorable store experiences. A study conducted by Forrester Consulting in collaboration with Shopify found that more than two-thirds of consumers (35%) plan to engage with brands through experiential moments within the next year.
A store-in-store fits perfectly within an experiential retail strategy. One of the key takeaways from the study is that 35% of consumers plan to engage with brands through experiential moments in the coming year.
Guide to Starting a Pop-Up Shop
Are you considering hosting a pop-up shop? This free guide includes 3 checklists to help determine what you want to achieve with your pop-up, different types of pop-up shops, and design ideas to help you get started.
How to Set Up a Store Within a Store
There are two main options for setting up a store-in-store: hosting a brand in your store or setting up your store inside another store. Here’s the process for each. Hosting a Brand Inside Your Store
If
you have empty space in your retail store, opening it up for a pop-up brand is a smart way to increase foot traffic and raise awareness of your own products. Here’s how to do it. Advertise pop-up vendors. Mention the benefits of hosting a pop-up shop inside your store, such as exposure to 1,500 shoppers weekly or space in a busy shopping center. Define the available floor space and locations. Explain how much space you can allocate for a pop-up shop and its location within your store layout. Determine the financial partnership. Options include a commission on product sales made within your store or a fixed rental fee – like leasing – for each day your partner occupies the floor space. Sign a contract outlining these details. Promote the event on social media. Remember: the more people who visit the pop-up shop to check out your partner’s brand, the more exposure your own products receive. Set up your store inside another store.
Do you want to be on the other side of the partnership? Collaborate with another retailer by following this process. Choose a retail partner with a customer base that overlaps with your own. Ask them if they are interested in this type of business partnership. Explain the benefits of renting space to them, including increased traffic and exposure of their products. Clarify the specifics. Discuss how much square footage you have available for use and the financial expectations for each party (such as whether you will pay rent or a percentage of sales). Determine the date and time. Consider peak shopping times when selecting the duration of your in-store pop-up. Set up your store within the store and prepare for customer service. This includes choosing a point of sale system and purchasing devices, both of which are essential for customer service and payment acceptance. Start promoting the event. Share news on social media and ask the hosting retailer to do the same, to build hype before the pop-up shop opens.
Receive payments in person immediately
Every Shopify plan includes integrated payment processing with fast conversions and low rates starting from 2.4% + $0.00. Skip lengthy third-party activations, accept all popular payment methods, and start selling faster.
Examples and concepts of store-in-store
Bloom Bras
Bloom Bras is a retailer selling sports bras for women with fuller figures. They have been experimenting with pop-up shops for years, with some well-known business partners including Macy’s, Title Nine, and Universal Standard.
However, founder and CEO Elyse Kaye says, “We have achieved huge successes from niche stores catering to hard-to-find sizes, with our bras ranging from 28C to 56L. At one of our pop-up shops in Oakland, the store did a great job promoting the event so we had a long line down the street and the merchandise sold out in just a few hours.”
Kaye adds that renting floor space for another vendor “reduces our spending, which gives a sense of exclusivity. Then we promote through our community of 125,000, bringing new local customers to the location.”
The Tur-Shirt Company
The Tur-Shirt Company is a retailer selling children’s clothing. Instead of laboring over pop-up shop planning, founder Terry Ann Thornton seized the opportunity to appear in John Lewis – one of the UK’s largest premium department stores.
This was the first time Terry Ann sold her products in person: “During the week-long event, I gained over 50 new customers and my social media exploded. I also saw an increase in visitors to my website, which coincided with an uptick in online orders.”
Casper
Started
Casper, the leading sleep brand in e-commerce, is expanding into physical retail in 2015 with its first pop-up store in Los Angeles. Now, the brand hosts regular pop-up stores within major retailers like Nordstrom, Target, and finally Bed Bath & Beyond.
Casper announced its plans to appear in 10 Bed Bath & Beyond stores, including its flagship store in New York. Joe Hartsen, Vice President and Head of Quality Assurance at Bed Bath & Beyond, says, “We are proud that the first in-store location for Casper will be inside our flagship store, and we look forward to serving New Yorkers and all customers across multiple channels together.”
5 Tips for a Successful Pop-Up Shop
Choose the right vendor to partner with
Find the best location
Create a sense of urgency and exclusivity
Make it an experience
Offer a comprehensive multi-channel experience
Leveraging a Shop-in-Shop: Is it the Right Concept for You?
Shop-in-shops – like any other sales channel – aren’t for everyone. Some brands thrive online and fall flat in physical retail. Some products may be too bulky or complex to be suitable for temporary install.
However, a shop-in-shop can be a powerful tool for reaching new customers and increasing sales. That’s why it’s worth considering opening a pop-up shop if you are:
- Thinking of opening your own retail store
- Trying to break into a new local market
- Looking to capitalize on an existing and shared target demographic
This article was originally written by Kira Apamonte and updated by Elise Dobson.
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