Thinking Outside the Box - Store, That Is

Retail is a fascinating business but getting into retail is considered somewhat difficult. Finding a location, fixturing and the huge investment needed for inventory serve as significant barriers to entry.

For quite some time now, a somewhat different approach to retail has been flying under the radar. The current economy (especially the difficulty in borrowing) suggests a serious look at what are called "Pop-up stores."

A pop-up store is a small operation set up temporarily to capture a specific audience or target market segment. Limited or consigned inventory that's priced to sell fast, a temporary or mobile facility and lots of loud marketing all make the pop-up store a bit different from the typical retailer.

We generally don't think of these as pop-up stores, but the neighborhood fireworks stand is a perfect example. Other good examples include Halloween and Christmas shops. As the articles listed below indicate, these are only the beginning of what might become a significant retail trend:
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Pop-Up Stores: All the Rage
The latest trend in retailing: shops that open for a few days in a major city or a mall—and then are goneBusiness Weekby Pallavi Gogoi Four days. That's how much time New Yorkers had to get a piece of the upscale design line Proenza Schouler at discount prices. On Feb. 2, the über-chic discount retail store Target (TGT) popped open a store in lower Manhattan, to display this latest high-fashion-at-low-prices design line. The store then closed on Feb. 5.***

The Pop-Up Store: A Smart Idea for Frugal Times
Christina Scotti, FOXBusiness, Wednesday, December 03, 2008 Jonah Staw, 33 years old, founded Little MissMatched on the oddball notion that socks don't have to match. Since then, he has built this three-year old company, with projected sales of $30 million in 2008, into "a lifestyle brand" that targets tween girls. The sell: being different and imaginative is cool -- and colors definitely do not have to coordinate.***

POP-UP STORES
trendwatching.com, first published in January 2004 If new products can come and go, why can't the stores that display them do the same? Well, you guessed it, retail outlets increasingly do. From gallery-like shopping spaces with one-off exhibitions to mobile units bringing inner city-chic to rural areas, TRENDWATCHING.COM has noticed an increase in temporary retail manifestations around the world.***

Pop-Up Stores Pop Up as Inexpensive Way to Build Buzz
Advertising Age By Natalie Zmuda, August 31, 2009 NEW YORK (AdAge.com) -- A few years ago, when cheap real estate was scarce, pop-up stores were a major investment for marketers. Now temporary stores have emerged as a perfect solution for cash-strapped brands, commission-hungry brokers and landlords faced with a glut of commercial real-estate space.***

Is there a pop up store in your plans? Be sure to do your homework and get information about local ordinances and code compliance, then start planning!

How Can you Raise Prices in this Economy?

One of the more frustrating aspects of my practice is helping clients understand the importance of price in business success. In tough times, the knee-jerk reaction to regaining customers and market share is often to lower prices. Please don't do that!

First, the last thing any business needs to do during a slow down is to reduce profits when sales are going down. Second, study after study indicates the customer - the very person you are trying to impress with your self-sacrificing "low price" - couldn't care less.

What?? But everyone says they are watching their pennies during this recession - how could customers not care about price? The answer is that sellers and buyers are seldom talking about the same thing when they say the word "price.

"When a Seller Says "Price" they are referring to the shelf price - what customers pay.

When a Customer Says "Price" the customer is talking about the money they spend, the risk they bear and the time it takes (among other things) to complete a purchase. Understanding what a customer means when they say "I want low prices" can mean the difference between success and bankruptcy.

A recent Wall Street Journal article reported on a fascinating consumer test that illustrates this point well:

Why Tie Marketing to Time, Not Money By Kelly Spors, March 24, 2009, 9:07 AM ET"In today’s recession, many small businesses may think it’s wise to tie their marketing to money and value to appeal to cash-strapped consumers. But perhaps they should tie it to something else of considerable value: time."

"A new study by researchers at Stanford Business School, published in the Journal of Consumer Research, found that it’s generally far more lucrative for businesses to reference time and personal experiences in their marketing than focusing on monetary value.""The experiment showed that the sign that stressed time brought in twice as many passersby who ultimately paid twice as much than when the signing stressing money was posted. Those customers who bought with the sign mentioning time also reported liking the lemonade more than the others."***

If any of my readers would like to discuss this is more detail for their business, please call or email and we'll set up an appointment.