Pop-up stores: Celebrating the benefits of offline and online?

By Natasha Spencer

- Last updated on GMT

Pop-up stores: Celebrating the benefits of offline and online?

Related tags: Online shopping

As leading global retail giants conglomerates Amazon and Shiseido announce they are embracing the pop-up retail trend, we explore the benefits they can provide and what it will mean for brick-and-mortar shopping and e-commerce buys.

Now, as the Asian marketplace sits in a position of economic unpredictability with higher business costs and dropping product volumes, the pop-up retail space may be the balance between customers receiving experiential shopping in-store and transactional shopping online.  

As noted in the first part of this article, demand for high-quality locations to house flagship stores, rising rent and the need to optimise portfolios have led businesses to handpick the location choices very carefully.

Placemaking - the idea of incorporating planning, design and creating retail spaces that are conducive to happiness in the local area - is leading the explosion of the pop-up retail space.  Businesses today are now starting to open new stores in locations that offer both cost savings and have high growth potential.  

Niche sectors are also becoming a popular choice for investors as they seek to diversify their properties to maximise return, making it harder for mainstream brands to obtain prime locations.

Bringing together the benefits of O2O?

The O2O effect, which uses the digital sphere to encourage in-store purchases, grew after brands sought to strengthen their identities and sales both online and offline.

The trend, typically synonymous with China, has continued to enjoy popularity with the younger demographic. Tencent Penguin Intelligence’s 2015-2016 report of the country’ internet trends revealed that over 75% of users aged between 20-40 had followed the O2O trend.

While the shopping experience of the future will continue to strive towards building effective e-commerce channels, brick-and-mortar stores in Asia have successfully implemented the O2O trend and are transforming instead of disappearing.

Is it the end of brick-and-mortar stores?

Euromonitor found that in 2015, 90% of retail sales around the world were made from in-store purchasing, Going forward, it continues to be an important part of large-scale omnichannel efforts.

As this dual approach gathers pace, the pop-up retail space enters as a short-term feature incorporating the social aspect of physical shopping with the convenience of e-commerce.

In the future, physical stores are set to leverage the occupier's brand by focusing on in-store publishing and broadcasting tools that increase awareness and that generate transactions through fulfilling the curiosities and needs of the consumer.

Reducing overheads

Key countries in Asia including Hong Kong, Japan, Malaysia, Singapore and Taiwan are experiencing property market changes based on the economy.

Companies are therefore scaling back their long-term positioning and investments in key locations, in favour of short-term, campaign-centric choices in the run-up to product launches.

In addition to its experiential function, the physical store enables refunds and exchanges to take place. This forms a significant part of the customer journey as brand loyalty is influenced by the level of service received.

Webrooming - where consumers research a product online before purchasing in-store - has become a popular behaviour.

The customer service element and webrooming demonstrate how purchases may be made online, but how the end of sale takes place offline.

Suitable for SMEs and multinationals?

Pop-up shops are not only proving popular in Asia, they also serve as brand promoters and fulfilment centres for inventory for all companies, both large and small. However, the way these companies use pop-up shops differs.

With rental prices on the rise, not only can SME brands use pop-ups to showcase their latest product offerings and create hype within the segment, the larger established brands also house these products in prime distribution points in order to increase efficiency and customer satisfaction.

The challenge for brands now incorporating pop-up retail stores into this omnichannel mix is to ensure that the customer journey remains consist and undisrupted. Adopting inventory management that oversees tasks from start to finish will help to ensure they are error-free and create the correct brand image.

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