Why Pop-Up Shops Keeping Popping Up
STEVE INSKEEP, HOST:
This is the time of year when once-vacant stores take on a temporary new life as Halloween or Christmas shops. That temporary model is becoming an increasingly popular marketing strategy and not just for the holidays. From member station WBEZ in Chicago, Susie An reports.
SUSIE AN, BYLINE: At a pop-up Halloween store in downtown Chicago, shoppers are trying on masks and sword fighting with props.
AN: This used to be a LensCrafters. And for a few weeks around Halloween, Chicago Costume Company is bringing the shop back from the dead. Halloween shopping is big business. It's expected to generate $9 billion this year. And pop-up shops are all about getting some of that retail dollar. Courtland Hickey is general manager of Chicago Costume.
COURTLAND HICKEY: When people are looking to get costumes, we want to be where they are. You know, it is a very delicate balance for a small business like ours. The cost of doing business can be quite high, so we have to make very good and thought-out choices.
AN: Hickey says in the past, they've opened as many as eight pop-up shops. But this year, they only have one. He says they're facing more retail competition and getting squeezed by more expensive short-term rent. Many landlords used to shun short-term leases. But Steve Schwartz with commercial real estate service JLL says that view appears to be changing.
STEVE SCHWARTZ: I definitely think it's a benefit. It really allows a landlord to activate the storefront. And activating a storefront in any way is always a good thing. Halloween shops, you know, they're fun. They're positive. They're engaging. They attract families.
AN: And Schwartz notes that pop-ups aren't just holiday themed anymore. He points to online retailers and digital companies that are adopting the model to build their brand and interact with customers in person.
SCHWARTZ: And they're using that pop-up model to sort of test the waters. So I think that the Halloween stores may have invented it. But some of these brands are perfecting it.
AN: One company helping them perfect the model is New York-based Storefront. Think of it like the Airbnb of commercial spaces. CEO Mohamed Haouache says everyone's using pop-ups, from small Internet retailers to large companies like Facebook.
MOHAMED HAOUACHE: We've seen, also, a big push coming from luxury brands. We worked in the past with Chanel. And we've seen a lot of celebrities, you know, like singers and performers launching their own brand.
AN: He says record labels have even set up pop-ups centered around a specific artist. Haouache says as recently as five years ago, many landlords would rather sit on a vacant property for a year than entertain a short-term lease. But now he says more are seeing the upside of getting rent from a pop-up store.
HAOUACHE: You're changing the traditional model of a long-term lease. And you're replacing it by a space which is getting booked every day or every week.
AN: He says, in some cases, the pop-up renter turns into a permanent tenant.
HAOUACHE: There is absolutely no doubt right now that short-term is the new long-term.
AN: When it comes to pop-ups, landlords can charge higher rents, in some cases, making that more attractive than long-term retail leases.
For NPR News, I'm Susie An in Chicago.
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