Business Essay

Question

To tackle this option you must approach it as an investigation of academic thinking around the topic. You will need to consult textbooks and academic journals although you may also find reports from respected industry contributors helpful. in this case you should relate the concept to existing theory and discuss the implications of the new ideas for existing business models. You should include examples of organizations in order to illustrate your arguments. You must clearly demonstrate that you have read around the relevant academic topics and that you have a strong foundation of understanding.

Answer

 “Pop-up retail” is a concept used to define temporary business establishments whose objective is to take full advantage of a seasonal product or a trend. Most of the products that businesspeople sell in pop-up retail tend to have short-lived demand. In today’s business world, pop-up retail is a very common phenomenon in the apparel industry. In the apparel industry, it is common to see stores “pop-up” one day only for them to be gone the next day. Some common examples of pop-up stores include fireworks stores and Halloween costume stores.

Pop-up retail has several advantages over the conventional retail phenomenon. Both retailers and customers derive several advantages from this business trend. For example, sellers are able to benefit from shorter leases and lower rents. This is particularly the case when these retailers intent to generate sales while at the same time retaining limited inventory.

Recent literature on pop-up retail has dwelt a lot on its role in experiential marketing strategy. Some of the issues arising from this literature include the relationship between customer shopping enjoyment and pop-up retail, attitudes towards pop-up retail, and the role of consumer innovativeness in the emergence of pop-up retail. Researchers are also interested in examining how this recent trend relates to existing theory. It is evident that aspects of experiential marketing theory keep arising during discussions on pop-up retail (Kim, 2010; Surchi, 2011). Moreover, one may expect that this type of retail is already portraying far-reaching implications for existing business models.

The aim of this paper is to critically investigate and discuss the notion of “pop-up retail”. The paper begins by providing an overview of  pop-up retail. The role that this trend plays in experiential marketing theory is also examined. The objective is to determine the overall impact that this approach to marketing has on contemporary marketing theory.

The world of retailing has drastically changed in recent years. The latest trend is characterized by shops that are established with the aim of engaging in retail business for just a few days. Most of these shops open in major malls or cities. The owners open them for just a couple of days before winding up business. For this reason, they are characterized by limited inventory and short leases. Moreover, these shops offer discount prices for their products.

The emergence of these stores seems to be inspired largely by the sense of haste that is increasingly manifesting itself in people’s lives. To respond to this sense of haste, companies attempt to capture the attention of consumers by creating a sense of urgency. For retailers, the objective is to get as many people as possible to get into their stores to buy fashion products such as shoes as clothes by positioning their stores as the newest limited editions in town. The retailers create a sense of urgency by presenting their products in a manner that pushes customers to “act now”. This greatly influences the way people shop (Postrel, 2003).

The growing trend towards preference for pop-up retail stores has a lot to do with the gusto and fanfare with which these business enterprises open up. This trend has become so popular that multinational companies have joined the fray. In November 2012, Nike, a multinational sportswear company, opened up a pop-up retail store in Soho, a New York neighborhood. This store closed down after four days, during which 250 pairs of special edition shoes were sold. Another example is that of Wal-Mart, a giant US retail store set up a Fashion Cabana to launch Metro 7, one of its newest products in South Beach district, Miami. Wal-Mart’s store stayed open for two days only.

For most retailers, pop-up stores provide an excellent opportunity for buzz and excitement to be generated, with the source of attraction being the launch of a new product or range of products. In other instances, these temporary retail stores are aimed at “testing the waters” as far as response of customers is concerned (Pine, 1999). Moreover, these stores tend to be less costly and in some cases even more effective than television advertisements. In many cases, television adverts cost up to millions of dollars to set up yet the objective is to generate the same publicity that would have been achieved through pop-up retail stores.

            The pop-up store, also known as the temporary store, has been hailed in contemporary marketing theory as the latest tool for marketing fashion brands (Surchi, 2011). It is imperative for focus to be on the factors that motivate the choice of pop-up retail as an ideal marketing tool. In most cases, particular reference is made to the fashion and apparel sector. Towards these efforts, it is common for qualitative methods to be used. Information obtained from various companies that make use of the pop-up retail approach can greatly enhance our understanding of this marketing tool, particularly its contribution to marketing theory as well as contemporary business models.

However, given that “pop-up retail” is a relatively new concept in today’s marketing literature, there is still a lot to be done in terms of research. Of particular importance is the need for practitioners and marketing specialists to obtain new information regarding the use of this fascinating marketing tool as the managerial challenges and implications associated with it. It is worthwhile to note that temporary shops have become a common phenomenon in several Western countries such as the UK and the USA. Nevertheless, in other Western countries such as Italy, this tool is yet to be universally accepted.

Many researchers study aspects of the temporary store using the exploratory approach (Ponsonby-Mccabe, 2006; Woodside, 2007; Sheth, 1991). They overcome the temptation to simply engage in descriptive analysis. It is only in the specialist media where a descriptive analysis tends to be used. Through an exploratory, this literature contributes immensely to the existing body of knowledge with regard to marketing theory and business models.

In other studies, focus is on the various characteristics that influence the behavioral intentions of customers towards pop-up retail. For instance, Kim (2010) assesses the various characteristics of pop-up retail with regard to its relationship with various factors including, shopping enjoyment, consumer innovativeness, attitudes, and patronage intentions. Kim (2010) uses the structural equation modeling method in the analysis of relationships among variables.

According to Kim (2010), shopping enjoyment and the innovativeness of the consumer greatly influence beliefs and attitudes towards hedonic aspects of pop-up retail, including uniqueness and novelty. These variables also influence consumers’ attitudes towards temporary retail. This is ultimately reflected in the changes that occur as far as patronage intentions are concerned. From this analysis, the concept of experiential marketing strategy is derived. Experiential marketing strategy involves efforts aimed at ensuring that the retail venue’s appeal is enhanced (Surchi, 2011). Customers who exhibit higher tendencies as far as innovativeness and shopping behavior is concerned are highly likely to have a lot of interest in enhancement of a retail venue.

Towards this end, the pop-up retail store seems to be providing a new, highly elaborate, experiential marketing format. There is a need for an analysis to be carried out on the various factors affecting this new marketing format. An understanding of these factors is necessary not only for the contemporary discourse on marketing theory but also on the current critical appreciation of various business models.

On the bigger picture, pop-up retail is a reflection of a new trend in customer behavior. In this new trend, many customers are interested in not just buying various products but also the engaging experiences that go with this activity. In the traditional retail-store settings, these customers do not seem to get the engaging experiences that they expect. Some of these experiences include greater choice, participation in the overall retail experience, and personalization.

Schmitt (1999)argues that some of the main factors that customers assess before making a choice of retail-firm patronage include brand image and product quality. In the experiential format, these customers search for products that are offered in an environment of proper communication and entertainment. They also want various marketing efforts to be undertaken in a manner that evokes emotion while at the same time stimulating their thinking (Schmitt, 1999). In other words, they expect they want to have the best response to various experiences. Moreover, they want the shopping “ritual” to be full of fun.

It is imperative to assess the pop-up retail trend in the context of the contemporary dynamics in consumer demand. This assessment has the potential to provide crucial clues as far as marketing theory is concerned. Marketing specialists have come to appreciate the fact that more customers are being attracted to retail centers that adopt a new format with the aim of engaging the customer even more. Examples of these retail centers include regional lifestyle centers, open-air retail town centers, and one-stop superstores. These centers are drawing bigger crowds than most traditional retail establishments such as downtown shopping districts and strip malls. In these traditional retail stores, marketing specialists are compelled to put in place measures that reflect the shifting preferences of consumers.

Pop-up retail falls in the category of the highly revolutionized retail marketing practices aimed at capturing contemporary dynamics as far as consumer preferences are concerned. Retailers are increasingly being compelled to make use of the experiential marketing approach. It is imperative to conceptualize the emergence of pop-up retail store in this context. This approach entails the use of interactive elements, emotional engagement, and rich sensory experiences in the hope that the resulting engagement with consumers translates into a competitive advantage.

In pop-up retail, established companies that already have a foothold in the market get a unique opportunity to create buzz and hype. They do this by offering entertainment as well as using space and design creatively. Instead of using traditional marketing media, proponents of the new trend prefer to use shopping centers. In most cases, they set up temporary retail centers, create buzz in the locality, put in place a small volume of inventory, make quick sales, and then close down the premise. From that point, the marketers resume their traditional marketing activities. In most cases, these marketers hope that their future marketing efforts will be positively impacted upon by the positive appraisal provided by pop-up retail customers.

However, for pop-up retail to be successful, various aspects of marketing theory need to be put into consideration. This is particularly the case regarding those aspects relating to process of communicating with customers. For effectiveness to be achieved, it is imperative for all experiential elements to be integrated at all points of contact between the consumer and the retailer. In most cases, the consumer meets the pop-up retailer through the company website and through marketing communication. Other crucial contact points include advertising channels and community-based events.

In literature on experiential marketing strategy, there is a lot of emphasis on the need for marketing specialists to ensure that the retailer/brand image is fortified. Moreover, efforts are made to promote brand recall while at the same time ensuring that the retailer/brand remains the consumers’ top-of-mind choice (Surchi, 2011). In this context, a pop-up store is seen as a manifestation of the emerging trend that promotes the importance of pop-up retail. In this case, a lot of emphasis is on the aspect of “individual physical manifestation” of the new trend as far as pop-up retail is concerned (Surchi, 2011). In this analysis, the impression created is that pop-up retail is a distinct business model that is manifested in many ways. Pop-up stores constitute only one of these many ways.

By setting up pop-up stores, experiential marketing strategists of various companies hope to engage consumers. They use this promotional setting to provide highly experiential interactions with consumers in an exclusive environment that cannot be found in the companies’ mainstream retail outlets. Through these exclusive interactions, the marketers also gain knowledge on which brands need to be selected for more aggressive promotion campaigns. Pop-up stores give visitors an opportunity for unique experiences and personalized interactions with the brand.

In recent times, literature on pop-up retail has focused a lot on its importance to both retailers and consumers.  This analysis is normally provided from two perspectives: demand-side analysis and supply-side analysis. In the demand-side analysis, focus is normally on the response of customers. Research evidence shows that in recent times, the response of customers to this new experiential marketing strategy has been overwhelmingly positive (Surchi, 2011; Ponsonby-Mccabe, 2006).

The fact that pop-up retail is a reality in today’s marketing practice shows that experiential marketing is no longer the fad many marketing practitioners thought it to be some years back. Many retailers are using this approach to amply the essence of their brands into physical, tangible, interactive experiences. Marketers have come to acknowledge that consumers must be addressed from both emotional and utilitarian dimensions for brand essence to be developed. The utilitarian dimension is achieved through the production of quality products. On the other hand, emotional dimension involves lifestyle activities and face-to-face interactions aimed at capturing the brand’s essence.

            Pop-up retail is also considered one of the “guerilla” approaches that act as response mechanisms in a dynamic world of fast-changing consumer preferences (Kim, 2010). The term “guerilla” is used to describe the resource-limited, non-traditional processes that provide a brand experience that is more lifestyle-oriented (Kim, 2010). From the demand-side analysis, it is evident that pop-up retail builds brand awareness and product knowledge. Ultimately, this leads to consumer empowerment, thereby benefiting both the retailer and the consumer.

            The demand-side analysis also shows that business owners are no longer ready to wait for customers to derive long-term attachment and loyalty to their products. The world is too fast-paced to allow such kind of patience. The best alternative to this long-term build-up of emotional attachment to a company’s products is to complement utilitarian dimensions with emotive dimensions of marketing. This is achieved by incorporating the lifestyle of the consumer into the buying experience. Pop-up retail provides retailers with an excellent opportunity for facilitating these integration efforts.

            There are many examples of companies that have chosen to adopt pop-up retail strategy instead of customers to develop long-term attachment to their products. For example Target Inc. (TGT) opted to set up a pop-up store within the lower Manhattan area. In this story, TGT displayed its latest fashion products at low prices. The pop-up store remained open for only one week before being closed down. During this time, the volume of inventory was low and sales persons had to adjust to a new environment that called for a new approach to the development of customer experience.

            Another example is that of pop-up retail that takes the form of travelling pop-up store. In May 2012, a Gap (GPS), a business enterprise based in the US, embarked on a tour dubbed “60’s Style Tour”. In this tour, the business entity opened a travelling pop-up store in the form of a school bus. This mobile pop-up store made brief appearances in New York and Los Angeles. It also stopped for a short time at the beaches of both cities. The seats of the bus were replaced by shelves on which flip-flops, t-shirts, and beach hats were on display. Customers would enter inside the bus, buy the products of their choice, and then pay for them at a cash register positioned near the driver’s seat.

One of the most lasting impacts of pop-up retail is that it is being adopted by business enterprises in the non-retail sector.  A good example is that of the US Potato Board, an association representing the American potato growers. In 2012, this association set up a pop-up store within New York during the Thanksgiving Week. The cost of setting up this store was less than $200,000. The objective was to create awareness on the nutritional benefits of potatoes. This store ended up being featured in several morning TV shows in the US as well as in The New York Times.

A critical assessment of the turn of events at the US Potato Board shows that the impact of the pop-up store on contemporary marketing theory was far-reaching. Senior representatives of US Potato Board stated that the association could not have been able to buy that much media within a budget of $200,000. Such a comment has the potential to inspire many business enterprises to try out pop-up retail with the hope of cutting down on their advertising and promotion budget. In theory, this may translate into a deviation from the traditional ways in which business models are defined.

In conclusion, future marketing research is likely to focus a lot on how such companies are using pop-up retail as a representation of a new experiential marketing format characterized by not only the utilitarian benefits of a product but also the emotive response that comes with the buying experience. One may expect most marketing departments of today’s business enterprises to adopt pop-up retail as a way of introducing the experiential marketing format. This is because of the over-so-urgent need for today’s businesses to create a sense of haste similar to the one that characterizes this era of globalization.

References

Kim, H. (2010). Psychographic characteristics affecting behavioral intentions towards pop-up retail. International Journal of Retail & Distribution Management, Vol. 38, No. 2, pp.133 – 154.

Pine, B. (1999). The Experience Economy. Harvard Business School Press, Boston.

Ponsonby-Mccabe, S. (2006). Understanding Brands as Experiential Spaces: Axiological Implications for Marketing Strategists. Journal of Strategic Marketing, Vol. 14, No. 2, pp. 175-189.

Postrel, V. (2003). The Substance of Style. Harper Collins, , New York.

Schmitt, B. (1999). Experiential Marketing. Free Press, New York.

Sheth, J. (1991). Why We Buy What We Buy: A Theory of Consumption Value. Journal of Business Research, Vol. 12, No. 1, pp. 73-85.

Surchi, M. (2011). The temporary store: A new marketing tool for fashion brands. Journal of Fashion Marketing and Management, Vol. 15, No. 2, pp. 257 – 270.

Woodside, A. (2007). Building Strong Brands in Retailing. Journal of Business Research, Vol. 60, No. 1, pp. 1-10.

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