How retail giants seized on popups to woo millennials, test expansion plans

VANCOUVER • To drum up excitement around the launch of a credit card targeting the oft-pursued millennial demographic, American Express Canada tapped several star chefs last month to serve Instagram-worthy plates at a restaurant in Toronto that would launch and shutter within a week.

Before Japanese clothing retailer Uniqlo opened its first Vancouver location this month, it ran a shop with a twist for one day. The location was stocked with flannel shirts, but employees asked Canadians to choose between leaving with a free one or gifting it to a newcomer.

Later this month, Google will open a temporary doughnut store in Toronto, promoting its new smart speaker, the Google Home Mini, simultaneously.

While the pop-up shop may have started as a way for online retailers to stage a lower-risk experiment with a physical presence, the temporary storefront has morphed into a marketing tool for established brands, often ones that already boast multiple locations.

“It’s definitely a trend,” said Tamara Szames, a Canadian retail analyst for apparel and footwear with the NPD Group.

Even Ikea Canada, which operates a dozen stores in the country, has created multiple short-lived shops. In June, the Swedish retailer opened the Ikea Play Café in Toronto where shoppers could sample meatballs, play a giant pinball machine and, of course, shop a small selection of the company’s kitchen products.

Pop-up shops backed by big corporations now spring up like whack-a-moles, and Szames thinks it’s “a very smart trend.”

 

That experience could change the way a consumer views a company and prompt them to either travel to one of their permanent stores to shop or to their online store, said Szames.

A temporary location also lets established Canadian companies test new markets in a vast country or international retailers experiment with the Canadian consumer, she said.

Japanese-based Muji, for example, offered a pop-up shop in Vancouver earlier this year and later opened a location at Metropolis at Metrotown in nearby Burnaby.

The method provides additional benefits for big brands whose products are sold in other companies’ stores.

Nestle Canada, for example, hosted a smattering of pop-up shops this past year. In Montreal, people could customize Delissio Rustico margherita pizzas. In Toronto, passersby could sample Haagen-Dazs ice-cream flights à la wine tastings and ice-cream cocktails during happy hour. Later in the summer, pedestrians could stop at a makeshift campground and roast s’mores using Aero chocolate.

The practice allows the company to develop an experience for consumers they don’t get to interact with in stores, and re-invent a brand for new, younger demographics, said Tracey Cooke, vice-president of communication and marketing excellence at Nestle.

The company sees a direct positive relation with sales in the vicinity of the pop-up, she said.

She acknowledges the pop-up is not necessarily a novel concept anymore and retail is on the brink of a saturation in the marketplace.

“I think everybody is on the pop-up bandwagon,” she said.

Still, she doesn’t foresee them disappearing any time soon as consumers, especially millennials, respond to experiences. For Nestle Canada, she said, pop-ups will remain in their playbook.

Leave a Reply

Read the original at Financial Post - Top Stories.