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How the pop-up beauty retail space is hotting up

By Natasha Spencer , 13-Feb-2017

Pop-up beauty retail in APAC

In this two-part article, we take a look at the growing trend of pop-up retail spaces in Asia and how its emergence is expected to impact the presence of brick-and-mortar stores and popularity of e-commerce.

At a time when the economic landscape is proving challenging for beauty brands throughout Asia, pop-up retail shops provide a viable and convenient solution.  

With brands strengthening their physical store presence and digital activities, pop-up beauty shops serve to drum up additional awareness and excitement around new product launches.

A business balance

Rising rental prices, a stagnant economy and political developments in countries such as China and Hong Kong, have led the region to adopt a cautious approach to brand portfolio management.   

E-commerce stores have helped to ease this financial burden and serve as a powerful and global brand awareness tool to drive sales.  However, as market research provider Euromonitor International reports, physical stores are still the main “channel available to shoppers to engage with a retailer’s brand”.

While physical stores provide customers with an experience, online shops maximise convenience. Although many brands are investing in both, the pop-up retail space enables both SMEs and multinational organisations to take advantage of added exposure, through a strong advertising platform with less risk and lower rental costs.

Getting the word out on the street

As global names including Shiseido jump on the emerging trend, the pop-up retail space is proving a popular choice for brands.

Singaporean PopUp Angels, which provides temporary retail space targets those companies that want to avoid paying the high rates in Hong Kong, particularly as volumes are also decreasing.

As Kit Chan, Founder of PopAngels, reports how interest in the pop-up space has increased by up to 50% in the last 12 months, the prime appeal of the emerging space appears to be in its power to optimise the effectiveness of short-term promotional campaigns.

“Often, makeup and cosmetics brands are based out of department stores with their own counters, and it is difficult for them to build infrastructure just to promote something for several days,” emphasised Chan.

A diversified portfolio

Leading commercial property company, CBRE, recently released its 2017 Asia Pacific Real Estate Market Outlook - Opportunities in the New Normal, where it highlighted how brands will be breaking away from convention as consumer behaviour evolves and global uncertainty impacts brands’ attitude to risk.

Companies will be more strategic and careful when making investment and expansion decisions to ensure operations perform at their best. They will focus their attention on creativity to welcome the ‘retailtainment’ era, which focuses on product showcasing with an educational angle.

As this shift grows, landlords will need to remain on-trend: “The challenging retail environment will continue to drive shopping centre landlords to improve their facilities to ensure they stay competitive,” outlined the report.

The report states that whereas a few years ago, brands were over-expanding, in 2017, luxury retailers with a physical presence will need to analyse primary locations to consolidate their outlets.

It’s, therefore, likely that the industry will see the emphasise switch from focusing on total store counts to a higher number of flagship stores.

The second part of this article will be published on 14th February 2017.

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