Temporary tenants have long been a shopping mall staple, particularly around the holidays. Halloween spawns costume shops and Christmas might usher in calendar stores or kiosks selling sweets and sausages boxed for easy shipping.
But the owner of the Taubman Prestige Outlets in Chesterfield has been looking beyond these predictable pop-ups to bring in a more diverse crew of temporary retailers — some that might be more likely to plant permanent retail roots.
To that end, Taubman introduced an Emerge Pop-Up Boutique earlier this year. Each weekend from April through Labor Day, four different vendors set up shop in the Emerge space. Products ranged from wine to soap to home goods. But jewelry, apparel, accessories and gift items emerged as the strongest sellers over the course of the concept’s trial run, said Colleen O’Neill, general manager for the outlet mall.
So, after a fall break, Emerge is reopening for the holiday shopping season with a tighter focus on those popular product categories.
“We took a break because, quite honestly, the space needed a little TLC,” O’Neill said. “So, Nov. 10, we will reopen and we’ve had so much interest and excitement about it that we’re actually doing two spaces.”
Emerge will operate during regular mall hours each Friday, Saturday and Sunday through Jan. 7, 2018.
In the revamped space, Leopard Boutique, one of the tenants from earlier this year, will occupy the entire original Emerge across from the GAP Factory Store. Taubman will set up another Emerge storefront a few doors down. There, different retailers will rotate through half the space and the other half will be occupied by The Colette Collection, a boutique that focuses on women’s apparel, accessories and shoes.
While it sells through its website, The Colette Collection’s only permanent brick-and-mortar store is a few blocks from Lake Michigan on the North Side of Chicago. Leopard Boutique, which also focuses primarily on women’s clothes, accessories and shoes, is based in the St. Louis area and sells online and at stores in Webster Groves and St. Charles.
The pop-up business model
By its nature, the scope of the pop-up industry is hard to gauge.
The marketing firm PopUp Republic put annual sales for pop-up stores, festival booths, craft fairs and the like at around $10 billion in 2015. And many industry experts predict pop-ups are more than just a fleeting trend.
Entrepreneurs are becoming increasingly cautious about expanding too rapidly in today’s unpredictable retail environment, said Alexander Goldfarb, managing director and senior real estate investment trust analyst in the research department at Sandler O’Neill + Partners.
“And that goes for an internet retailer that wants to roll out a physical strategy,” said Goldfarb, who follows Taubman. “It also goes for a local or regional retailer that’s thinking, ‘Hey, we want to try to expand our locations, but we don’t want to make a long-term financial commitment. So let’s start with a pop-up.’ If that works, maybe they’ll convert to a full-term lease.”
And, though shopping habits are undeniably shifting, research shows that even younger generations of shoppers still prefer to do a lot of their browsing and buying in the real world. The opportunity to get their products in front of potential customers is especially important for smaller retailers that might not be able to catch consumers’ attention in the cluttered online marketplace.
In that environment, Christina Weaver, co-founder of the St. Louis-based nonprofit retailer Roūte, said most of Roūte’s sales come out of relationships. The mostly online retailer sets up shop at festivals and events when specifically asked to attend by an organizer already familiar with its offerings.
“I like pop-ups as a business because it allows us to participate in a brick-and-mortar location without having to commit to long-term overhead,” Weaver said. “So, for a very small business, it makes it possible for people to come shop and build face-to-face relationships with us, try on our clothing, try on some of our jewelry without the commitment of ordering online and sending something back if they don’t like it.”
Roūte experimented with the Emerge pop-up shop this summer, but won’t be returning for the holiday season. Weaver said the retailer seems to do best when all the traffic is concentrated in a shorter period of time and space, although she said the mall-based pop-up was a positive learning experience.
Short-term shops also cut the commitment period for mall owners and operators, allowing them to fill vacancies for the moment and hopefully convert the most-successful stores into long-term tenants. It also lets shopping centers tap into the “shop small” movement, O’Neill said.
“It gives us something local that I think adds excitement,” she said. “It’s fun and I think people like shopping locally.”
The changing landscape
While a growing number of national chains shutter stores, O’Neill said consumers and entrepreneurs alike are seeking some different scenery on the retail landscape.
Pop-up shops can generate a sense of excitement and adventure on both sides of the cash register.
“With the way retail is today, you have a lot of these national retailers that have gone bankrupt and there hasn’t been this whole onslaught of new concepts. But what there has been is a lot of individuals really getting creative and launching their own businesses,” she said. “And you never know when the next big concept is right around the corner.”
Taubman’s parent company also opened an EMERGE Pop-Up Shop at Twelve Oaks Mall in Michigan, in a venture that featured retailers with distinctively Detroit-area roots. It’s a great way for retailers — especially those that don’t have a permanent physical location — to share their stories and creations with a wider range of potential patrons without committing to a multiyear lease in a mall or other commercial space, said Lori McGhee, Taubman’s group director for specialty leasing.
“On the consumer side, we’ve found that it’s all about the experience. When visiting a new and exciting pop-up, many feel like they’re getting the inside scoop on new trends and unique products. These stores are a great way for consumers to check out new products and learn more about emerging brands,” she said. “Pop-ups can be a win-win for both the merchant and consumer.”
And that can apply not only to emerging brands, but established retailers that want to experiment with new concepts and markets.
For instance, American Girl operates temporary shops at some Taubman locations. The Hello Kitty Cafe Truck, which is coming to the St. Louis Galleria mall on Nov. 4, has also made stops at Taubman centers to serve up sweets.
Similarly, Overland, Missouri-based Build-A-Bear Workshop has used pop-up shops as part of its marketing strategy in recent years. The retailer announced it’s also opening a pop-up bake shop in November at West County Center, where customers can come in and customize their desserts. The one-of-a-kind location will set up shop near Build-A-Bear’s West County store to sell sweets made by Chesterfield-based Sarah’s Cake Shop and offer in-store events, according to a report in the St. Louis Post-Dispatch.
Google, meanwhile, announced it will open one of 11 pop-up doughnut shops in St. Louis to introduce the Google Home Mini voice-activated assistant. The shop will be open in the Cortex Commons from noon to 8 p.m. on Nov. 9. There, visitors to the free pop-up event can register to win either two doughnuts or one of the new doughnut-sized devices while getting a peek at other surprises from the tech industry behemoth, according to the Facebook invitation.
Sales are sometimes a secondary goal, said Goldfarb, the real estate analyst at Sandler O’Neill + Partners. Rather, Apple and Microsoft stores — or even Target pop-ups in Manhattan and other areas where superstores are few and far between — are more about giving consumers an avenue to see and feel products they’ve probably already researched online.
“Having a temporary store can be a good thing in that it spurs excitement among consumers,” Goldfarb said. “And it also gives the retailer a good sense of how much demand they can expect for their product in that market.”