At a time when some retailers are reducing their presence on the high street, Emma Herrod looks at how mobile is enabling pop up shops, and whether they are the answer to retail everywhere for pureplays or just a line in the marketing budget.
It wouldn’t be christmas in my local high street without a store opening to fulfil the increasingly urgent need for wrapping paper, decorations and cheap gifts and novelties. This store is usually more akin to a market stall trading mentality of pile it high, sell it cheap, making the most of the opportunity as there’s only a finite lifespan for the store in the run up to Christmas.
In the way that markets have been changing from the weekly external trading post for the butcher, baker and candle stick maker, to the local farmer of rare breed pig turned sausage maker, the artisan baker, organic home grown felt slipper maker and local cake maker so too have pop up shops moved on from the loud hailer approach.
John Lewis opened a pop up store in Exeter for six weeks prior to the opening of its permanent department store, Toys R Us [IRDS RTOY] took up the gap in the Christmas toy space left behind at Whiteley by Early Learning Centre and eBay [IRDS REBY] has had pop up shops in London for the past two Christmases. Over in the USA, online luxury hamper company Harry & David opens pop up stores every Christmas to maximise its peak trading time.
ENABLING BRICKS AND MORTAR
Mobile technology is enabling retailers to pop up pretty much anywhere. As Richard Cottrell of IT services company Vista Retail explains it is also a lot quicker nowadays. “The major constraint until now has been the issue of the availability of reliable high-speed data connections and the length of time it takes to get a landline into the premises.” However, this reliance on landline data connectivity could be about to change since 4G offers the promise of high-speed broadband over a much wider area. This has the potential for shops to ‘pop up’ in more rural locations, as well as more populated areas which currently suffer from massively congested 3G.
“Retailers will be able to simply plug in a 4G modem with SIM card,” and go where their customers are – be that an empty shop on the high street, a field at Glastonbury Festival or the middle of a sporting event. “By enabling immediate reliable wireless access, major retail chains will be able to replicate the customer experience of their existing bricks and mortar stores without the risk of compromising the brand.”
It is this ability to replicate the customer experience of permanent stores that will make the difference between future pop up stores and the pile them high-type of before. Retailers will be able to offer the personalised service – enabled by access to customer data by tablet-wielding associates in store – alongside the traditional provision for point-of-sale facilities.
At some point though, you have to transact and there are no shortage of options for mobile payments. Indeed, this is an area of mobile commerce that is rapidly changing as Paul Skeldon’s feature devoted to this area later in the magazine shows. From plug ins and apps such as Square which change your mobile phone into a card reading device into a full blown mobile payments terminal that can be rented by the week from companies such as WorldPay.
Although, “you also need to link the POS to stock management for replenishment,” comments Geoff Baraclough, Head of Corporate Propositions at WorldPay.
Of course, as issues of mobile money are overcome in terms of technology and consumer concern, pop up stores could simply be a case of bumping phones to give money to a charity collector in the street, to a payment via mobile terminal to a flower seller or market stall trader.
One technology already being used in stores to enable mobile payments is NFC which is being used to good advantage by US jeans retailer Hointer. While being a permanent store rather than a pop up, the technology in the Seattle store can be installed “in a few days,” says CEO and founder Nadia Shouraboura. Rather than having piles of merchandise around the store, through which customers have to rummage to find the correct size to try on, just one of each item is on display. Each pair of jeans has a tag which can be tapped by an NFC-enabled phone or scanned by a QR-code reader to give the shopper information about the product and access to product reviews.
In addition, an app developed by Hointer allows the shopper to request their size for trying on in the changing room. They then wait for their selection to automatically drop into a chute in the changing room from a robot-operated stockroom. When the shopper is ready to make the purchase they simply tap to pay.
Shouraboura comments that as well as making it a fun and interesting experience for customers, the technology also ensures that they know where every item of stock is in the store and warehouse so would be able to fulfil online orders easily.
VIRTUAL STORES
Mobile stores don’t even need bricks and mortar to surround them; City Dressing has pared down retail into a pop up shop that consists only of a window with no shop floor behind. Using augmented reality technology it can offer an interactive presence on the high street using shoppers’ own mobile phone.
Debenhams has trialled augmented reality from mobile phones, while Tesco has achieved lots of publicity around its use of shopping walls in Seoul and Gatwick Airport, as has Ocado . Thomas Pink’s instant mobile checkout from pop up stores generated sales from day one while Universal Music and Pretty Green increased sales and ROI from all brand communications through store window posters and Facebook. Net-a-porter’s Window Shop used augmented reality to bring images in a shop window to life on a virtual catwalk as part of a marketing campaign for Vogue’s Fashion’s Night Out.
But are virtual stores just a different window through which to see the retailer’s delivery mechanism, a click and collect point for peak times, a marketing tool to drive brand awareness, a test bed for innovative technologies or simply another form of outdoor advertising?
Jonathan Wall , E-Commerce Director at Shop Direct Group, believes that pop ups are more about brand and public relations than being a direct source of revenue. It’s Littlewoods brand tested geofencing in Dublin last year with O2 Media’s real-time location-based messaging service. Shoppers were sent a promotional message about shopping online with Littlewoods Ireland when they were in Dublin’s shopping streets. The group found that although click through rates were “reasonable,” conversion rates for the direct response mechanism were low and “not viable” from a commercial perspective. As Wall comments “what does success look like?”
Other pop ups have been run at the V Festival “which was great for PR,” but not so good in terms of the number of tents or wellington boots sold. The window of an empty shop in Liverpool was transformed over Christmas 2012 into a virtual store for its Very.co.uk brand. It showcased fashion trends alongside QR and NFC codes through which shoppers could interact with the display and purchase. As Wall comments: “We want to be wherever our customers are,” he says, “and we want to be out there when our customers are thinking of buying”. An ambition for all retailers but reaching those customers in a relevant way in real time is easier said than done but mobile is the front runner in enabling retailers to do just that. And, as Wall explains, the Group is in no rush to open physical stores.
However, Shop Direct Group is about to ramp up its testing and r&d as it moves to build innovation into the business, and mobile will take a significant part in that since it accounts for 25% of sales currently. “We’ll be trialling different things,” says Wall, “pop up and virtual” but tests will be driven by the insight teams and data, and will also include ideas around technologies that the data and insight “give us no idea about.”
One of the biggest challenges to bricks and mortar pop ups, believes Wall is landlords’ reluctance. Understandable when they are bombarded by reports of online retailing being the death of the high street. One of the ways around this for retailers is leaving the job of finding locations to companies such as Appear Here, which runs an online service connecting retailers with empty store locations available for short term rental.
Thinking has been changing over the past couple of months though amongst larger landlords – those who are responsible for a whole street rather than just an individual space comments Ross Bailey, CEO of Appear Here. Lease times have been shortening over the past twenty years and as long as there is enough demand, short term lets shouldn’t lead to empty space. “We aim to make it as easy as booking a hotel room,” says Bailey, “and as easy as setting up an online shop,” which is why Appear Here is working in partnership with payments providers and suppliers of shop fixtures and fittings.
Another running pop up stores, but in this case for SMEs is PopUp Britain. Through the PopUp Britain campaign, 120 online SMEs have been able to bring their products to the high street through a number of pop up stores in London’s Somerset House, Victoria, Richmond and Moreton-in-Marsh. Every two weeks, six new retailers move into each store to experience retailing on the high street. As well as exposing local shoppers to new businesses, the pop ups bring the benefits of allowing the SMEs to experience high street retailing and test new locations.
The shops have been kitted out with the help of larger companies including John Lewis, which fitted out the Victoria store and Intuit which provided card payment and processing through smart phones. Intel has just installed a screen-based application in the window of the Victoria shop which recognises the gender of the person looking at the window and shows them relevant products available in the shop. It also tracks whether that person’s curiosity is turned into a sale.
“Small businesses are benefiting from marketing and the profile exposure,” says Emma Jones, Campaign Director, PopUp Britain, but they offer benefits to large retailers too. John Lewis for example has added one SME’s products to its stores having visited them in the pop up to see how they’d look in a store environment. “Pop ups allow multichannel retailers to test new lines,” she says, as well as to test new locations in the case of pureplays such as eBay “to touch and feel and to experience the brand” bringing the brand to life in the real world.
All of the SMEs that have traded in a PopUp Britain store have seen an increase in sales during the two weeks of trading and also in the longer term through increased sales via their websites. One retailer has seen a 300% increase in traffic levels and 12% say they are now looking for space on the high street.
In the case of John Lewis’ Exeter pop up store the company is unwilling to share its effect on online sales but when asked whether it had plans for future stores, Ceira Thom, Project Manager, New Formats and Lloyd Page , Head of Marketing, Brand, commented: “We don’t have anything ready to share on this at the moment however are keen to explore opportunities for this with other new stores.”
And the reasoning behind the Exeter pop up store “We wanted to give the customers in Exeter a small taste of what John Lewis would be like when the main shop opened. It was about generating excitement and anticipation for all of the customers who had been incredibly positive about a John Lewis opening in the city. We wanted to create an immediate link to the community and begin dialogue on the main shop early so new customers and Partners could understand and engage with our brand and what we stand for.”
Ecommerce has proved that customers don’t have to be in the same location as the product to purchase it – indeed catalogues were already doing this for many years before the rise of the internet. With so many empty shops around the country, is now not the time to test technology, customer insight and the power of crowds and bring in all the lessons from online flash sales, daily deals and ‘for a limited time only’ to local markets and pop up around Britain? If viewed as part of r&d or part of the marketing budget then the measure of success will not necessarily be sales from the store but raising of profile amongst new and existing customers. Yes, SMEs are covering their costs in the PopUp Britain stores but their results are showing that the profit is in the longer term increase in online sales.
For larger retailers though are pop up stores just a temporary marketing transition on the longer-term road to enabling mobile scanning, tapping and payments from any form of outdoor advertising? That’s one for retailers and consumers to test. Technology is already moving that way.
FUTURE
Taking mobile and pop up shopping a stage further is online fashion retailer Zalando with a fashion concept car at the 83rd International Motor Show in Geneva. The Zalando fashion concept car uses an augmented reality app and an iPad camera integrated within the car to recognise outfits worn by passers-by which can then be ordered directly from the Zalando online shop. Once the order has been processed, it is then delivered using an in-built GPS tracking system straight to the car – wherever it happens to be – with a built in space designed to fit Zalando’s delivery boxes. The car also boasts a mobile changing room.
COMMENT
Olivier Ropars, Senior Director Mobile, eBay Europe
“The world is no longer about online or offline and the boundaries are blurring as we embrace the ability to shop anytime, anywhere. So whether we’re talking about bricks and mortar shops, pop-up shops or virtual experiences, mobile i s the key to unlocking the best of these on or offline experiences. To put this in context, this year we’re expecting to see $20bn mobile sales.”
