Landlords and brands are experimenting with new types of pop-up shops, making them a mutually beneficial, innovative addition to high streets.
A new store has just opened on the corner of Elizabeth Street, in the sought-after Belgravia area of London. Nothing about the store – from the plush dusty rose furnishings to the glittering dresses hung around the space – seems temporary, but a week ago this store was not here, and, in a month’s time, it will vanish again completely.
The store is the first pop-up from online peer-to-peer fashion rental start-up Hurr. Shoppers try on dresses in the shop, rent them for a set period and then return them to the store or by post. In 35 days, the brand plans to host 30 events: leveraging its physical location to connect to customers in real life.
Hurr’s presence in the street is indicative of the evolving approach to pop-ups from landlords and brands alike. As businesses seek to test out new concepts in physical retail – for as little as a few days to several months – and property companies try to fill voids and revive high streets, a new, flexible relationship is emerging, which has mutual benefits.
The pop-up’s popularity is in part a result of the challenges faced by the UK high street. The retail vacancy rate hit a four-year high in September, increasing by 6% year on year for the first half of 2019, Local Data Company reported.Retailers continue to cite falling numbers of shoppers as a reason for declining sales.
With a temporary tenant in place, landlords can avoid having to pay business rates on empty properties. And new retailers bring excitement and lure shoppers back to into local areas – and may also turn into permanent tenants for the landlord.
Both growing and established brands are using pop-ups to test locations and concepts before investing.
In recent months brands including Never Fully Dressed, Castore, Essentiel Antwerp, Mulberry, Blundstone, Dundas, Gap, Barbie and sustainable store Rêve en Vert have all announced or opened pop-up stores – and the momentum behind the concept seems to be growing.
“For us [pop-ups] mean added vitality and freshness for the consumer,” says Haydn Cooper, property director at property company Cadogan, whose estate encompasses 93 acres in Chelsea.
“This means being very selective about the brands that we work with – ideally, they will be opening their only store in London, bringing excitement and footfall, and looking realistically at committing to a longer-term lease should it prove successful.”
“Pop-ups keep our streets interesting,” asserts Joanna Lea, director of retail at property company Grosvenor, whose holdings in central London include South Molton Street and Elizabeth Street. “The high street is changing, and [pop-ups] give us access to fresh young talent and a much wider pool of brands.”
Lea highlights pop-ups from Instagram influencer The Daily Dress Edit in May, as well as the Hurr pop-up on Elizabeth Street, as examples of how Grosvenor is seeking to evolve the concept. Both are unconventional uses of retail space: a rental store and a curation of brands from an influencer – rather than a traditional retailer. This creates a fresh high street experience for shoppers, she says.
“The struggles for the high street are no secret and I think landlords are becoming more entrepreneurial and realising that people want flexibility in leases and people want to take those spaces for a short amount of time,” notes Victoria Prew, founder of Hurr.
She continues: “The way that consumer retail and generally the high street it going to go is all about the experience. That is how to bring consumers back into stores: it’s more about creating that experience rather than just pitching product. Pop-ups are all about that immersive experience.”
Landlords are becoming increasingly flexible, to appeal to the kind of young, exclusive brands they hope can drive footfall.
The Crown Estate is one company also making use of this approach. Senior asset manager Katrina Mercury highlights Princes Arcade, which links Jermyn Street and Piccadilly, as a key location for pop-ups: brands including Barker shoes and Grenson have pop-up stores in the arcade.
“In that location we took a deliberate decision to try and attract really interesting and innovative brands, so we had to take a more flexible approach,” she says. “That really allowed us to welcome independent brands that may have been priced out of the area under other circumstances. Each of them adds another reason for shoppers to visit the area and really brings a bit more diversity to our retail mix.
“We work with brands that we think will help us gain really positive PR and drive footfall.”
Under its flexible leases, rather than committing to contracts of several years on stores, terms can range from three days to six months, and retailers have the option to extend. The Crown Estate offers leases either at a fixed price for the term, or as a percentage of turnover. Mercury says at least one brand in the arcade already wants to convert to a longer-term lease.
From a brand and retailer perspective, flexible rents in pop-ups shops provide the ideal opportunity to “try before they buy” with retail – seeking to ensure security with a lower cost, before taking the plunge and investing in a permanent store.
“Fresh young brands want to trial and test before they ‘buy’,” says Grosvenor’s Lea. “If we can make it as easy as possible for them to do that then that is a good thing. If they then they do well, then we can potentially convert them into a longer-term lease. It allows us to build that customer relationship from a very early stage and stay with brands all the way through as they grow.”
She gives the example of premium womenswear brand Me + Em, which initially took space in Belgravia on a pop-up basis and has since taken a store on Elizabeth Street. Elsewhere, Essentiel Antwerp’s pop-up with Cadogan on the King’s Road converted from pop-up to permanent, and luxury sportswear brand Castore have just opened a pop-up on the same road, and are considering converting the space into a permanent store if it is a success.
Premium womenswear brand Rixo – which has hosted a series of pop-ups across London including in Covent Garden, Carnaby Street and currently in King’s Road – is also treating pop-ups as a testbed for future plans. Henrietta Rix, co-founder, explains.
“It’s been a great way for us to test the market to work out things like footfall and where our customer is truly shopping. We wouldn’t have had to chance to do this if we had jumped straight into a permanent space,” she says.
“With full-time stores you usually have quite lengthy contracts, huge deposits and bigger overheads, which you don’t tend to get with a pop-up, so from that respect they are more cost effective – especially if you are a brand that is just starting out, and still figuring out your customer and where they shop, as well as what physical space and location actually really represents your brand.
“The long-term plan for us is definitely to launch a flagship store in the future, but we want to be absolutely certain it’s the right space and location for our customers.”
Flexible rents are not the only factor making pop-ups affordable and practical for retailers. Property companies are keen to facilitate the process to harness the mutual benefits of pop-ups.
Grosvenor, for example, launched “Retail Concierge” 18 months ago as part of as innovation strategy. The service for occupiers assists with logistical matters such as fit-outs and utilities management.
“We’ve done a big piece of work looking at all the pain points faced by pop-up occupiers, who generally have no property experience,” says Lea. “We’ve been trying to look at how we can reduce those barriers to entry and make it easier.”
Appear Here, which links landlords with prospective pop-up occupiers, is another company making stores accessible to a wider variety of brands by removing costly and logistically complex arrangements.
Katie Cary, founder and designer at footwear brand Rogue Matilda, opened her pop-up through Appear Here. It runs for two weeks on Sydney Street in Chelsea, London at the end of November 2019. She says the ease of the process enabled her to capitalise much more effectively on the traditional benefits of pop-up stores: brand communication and customer interaction.
“I would still have been able to launch a pop-up without Appear Here, but it would have been a lot more stressful,” she says. “What this means is that it has been really enjoyable to organise. I can put time and effort into the more fun, creative side of things, which gives it a much more personal touch. It has freed up my creativity.”
“It’s really important when you have to have an online brand that everything will immediately come to life. People need to come into the store and get a sense of what the brand is about.”
Pop-up shops have a permanent feature of the high street retail property landscape. If landlords and retailers continue to work together, in a flexible and innovative manner, pop-up shops have the potential to give a much-needed sense of excitement to the British high streets and an equally valuable boost for young, innovative brands.