A third of all new UK start-ups will be pop-up shops, according to research by mobile network operator, EE.
This impending change to the retail landscape, is most likely to be prompted by a combination of the lower risk and more financially viable strategies assigned to pop-ups, in addition to the greater flexibility and mobility afforded by advancements in technology.
For individuals who wish to dip their toe into the world of entrepreneurship, rather than take the full plunge, pop-up shops appear to provide the perfect solution. Pop-ups, it seems are taking over the retail world, and it is estimated that there will be around 3.4 million start-ups of this kind in the UK in just two years’ time.
There’s no doubt that the benefits of opting for this set-up are vast. Experimenting with this temporary business solution can be up to 80% less expensive than traditional retailing, as a result of lower monthly rental costs for business premises and utilities. Pop-ups also provide a gateway to cater to seasonal demand and offer ample opportunities to enhance brand awareness. Not sold on the idea yet? Read the advantages below to find out whether pop-ups could be an option for you.
Arguably, one of the biggest benefits centres on being mobile. Having no fixed location affords greater mobility for businesses, which means that you can go wherever the money takes you. While you won’t get the same opportunity for repeat business as static and online shops do, the benefits of having a limitless customer base can be instrumental to a start-up business which is yet to establish reputation and customer loyalty.
Small business, big potential for tech
Pop-up shops are just as, if not, more reliant on technology than standard “bricks and mortar” retailers and it is therefore vital that this heavy reliance on tech is factored into a start-up’s business plan. Advancements in technology mean that businesses of all sizes and types can deliver an ‘always on’ culture, whether they exist solely online, as a pop-up shop in a retail arcade or in a car park on an industrial estate, or as a combination. Setting up an online profile/website first seems like the most sensible option and is often the preferred method for start-ups as it minimises risk and provides a free platform for conducting market research.
It also seems that online shopping is becoming increasingly popular amongst consumers, who are set to spend an average of £1,175 online this year, an increase of 9.6 per cent on last year’s figure. While providing an alternative revenue stream is important, this also provides businesses with an outlet to learn important lessons early on, meaning they can be armed with the necessary knowledge and insight required to make the pop-up experience a success.
Whatever format you choose, it is essential to have the right kit on hand to ensure that you deliver a good buying experience for your customers.
A tablet, for instance, can be used to widen the range of products you can sell via a pop-up shop offering customers the chance to order different colours or sizes than the ones available there and then.
If you don’t plan to have an online shop, it is still possible to retail online via sites like Etsy (a peer-to-peer e-commerce website) which could be another way of supporting your pop-up shop.
Location, location, location
The term ‘pop-up’ is very vague, and in reality this encompasses a range of situations, including: fast food cabins, renting space on a market stall or busy shopping centre, or even investing in a business on wheels. The key criteria is that the shop or service is portable, and often temporary.
For start-ups, it’s important to take advantage of as many opportunities as possible, especially those which don’t break the bank. So, while the idea of renting space in the city’s busiest shopping centre may seem more appealing than the local village’s church hall, the price tag and scale of competition are likely to be deal breakers. Getting lots of small, inexpensive gigs, while supporting the business online, is actually likely to be more rewarding than blowing the budget on one or two larger opportunities and not maintaining that visibility and momentum. To minimise risk, do your market research first- identify who your customers are and where you are most likely to find them. Using this information, try out a few different locations and venues which will give you more of an idea of what works well for your business, and what to avoid in the future.
Fear of commitment?
Most start-up businesses will agree that it is important to ensure that your business plan is as watertight as possible before you invest time or money into a new venture. Pop-up shops make it possible to test the waters and begin building a business, while holding down another job in order to maintain a steady source of income. If the fledgling business is successful, demand may mean eventually moving to a fixed location which can offer more space, or even becoming an e-retailer. However, during the early stages it is wise to keep your options open. Running a pop-up shop allows you to maintain your 9-5 office hours, and pursue your new venture in the evenings and at the weekends, while keeping any financial risks such as costly shop rental contracts, to an absolute minimum.
Build customer relationships
Your customers are ultimately key to your business’ success and it’s important to establish and nurture strong relationships from the outset. While it is admittedly difficult to maintain customer relationships when your business doesn’t have a permanent home, you should use this situation to the best of your advantage. In a way, pop-up shops have the upper hand over fixed businesses, as the pop-up experience is a much more personal one, due to the more intimate, one-to-one environment. Take this opportunity to get to know your customers, learn their routine and find out what interests them. This information will help you identify buying trends and may even influence what and how you sell it in the future. A positive buying experience will make people more likely to spread the word to friends and family ultimately creating more supporters of your business, which could help to widen your customer base. This can be supported by social media, with Twitter and Facebook acting as free platforms for advertising where you will be showcasing your wares next. After all, repeat business holds the key to success.
Now how do I do it?
It’s easy to talk about the benefits in isolation, but there are a number of steps which need to be followed for successful execution, and to ensure you don’t fall foul of the law.
Put the wheels into motion
Once you have decided who your customers are likely to be and what they will pay, you need to identify where they are most likely to buy and what from a stall or shop and how you will enhance the pop-up experience for your customers to generate maximum sales? Establish what payment methods you will accept and whether you will need technology such as card readers. Put the preparation in now to avoid failure further down the line.
Pick your venues
To book your first set of venues, websites such as Appear Here are a good starting point as they allow you to search for available space, based on your desired geographic location and budget.
Make it official
Don’t forget, pop-up businesses are not exempt from taxation. As such, you are required to notify HMRC of your business’ status or that you are self-employed. There is also legislation to be aware of if you plan to employ additional members of staff. For more advice on this topic, head to the government’s HMRC website. To avoid nasty surprises, check that the price of any space you are renting is inclusive, and that there are no other costs you could be expected to pay, such as business rates.
Market, market, market
Once you’ve set up your business, it doesn’t stop there. To make it a success, you need to work hard to create a ‘buzz’. Advertise your business wherever you can: on leaflets, in the local newspaper, on shop notice boards, and of course, online. Take every chance you get to network and spread the word to everyone you can. You should also see what opportunities are out there to collaborate with like-minded people who may be able to provide services to help your business out, and vice versa.