A marketplace for pop-ups wants to disrupt the retail real estate business
Source: thestorefront.com

A marketplace for pop-ups wants to disrupt the retail real estate business

In a world where many segments of physical retail are lagging, pop-up shops have never been so popular. Now one startup, being billed as “the Airbnb of retail,” has opened a marketplace that could shake up the pop-up model by making it easier for brands and retailers to rent.

Storefront, Ltd. connects brands and retailers looking to launch pop-up shops with available retail real estate, according to an interview with CEO Mohammed Haouache on Bloomberg. Mr. Haouache said that by using the marketplace, brands are able to book an open retail space in less than two hours. Storefront currently has a presence in Paris, New York, London and Hong Kong. The startup facilitates pop-up placement for 4,000 brands worldwide.

The Airbnb comparison made in the Bloomberg report is an interesting one given that some have accused Airbnb of disrupting urban residential rental markets in big cities — and not in a good way. Airbnb’s critics charge, as discussed in a Los Angeles Times article, that the use of properties as short-term rental units in popular areas takes them out of the rental market, creating scarcity and driving up rental costs for residents.

The extent to which Storefront or a similar marketplace might impact the rental landscape — and the pricing — for pop-ups and long-term retail leases remains to be seen.

But what has become clear in the past few years is that the growing popularity of the pop-up model may lead to it being a less cost-effective method of brand promotion than it was in the early days. Earlier this year, RetailWire reported brands sometimes finding that pop-up rental prices had begun to rival the prices of long-term leases. Still, the model represents a way for brands and retailers to be creative with how they get their names out there and expand their reach beyond their traditional retail footprint.

When questioned by Bloomberg about the move into physical retail at a time when e-commerce is ascending, Mr. Haouache noted Amazon and Google’s increasing use of pop-up shops to reach customers.

“Even the almighty online players need a physical touch,” Mr. Haouache told Bloomberg.

BrainTrust

"The immediacy of being able to search for space and move fast to create an experience is fantastic for marketers that need to keep ahead of the curve."

Anne Howe

Principal, Anne Howe Associates


"Storefront will work as a kind of pop-up shop Travelocity, letting retailers compare renting options in target neighborhoods. "

Jasmine Glasheen

Content Marketing Manager, Surefront


"I see a lot of innovation coming in the space in 2017."

Kim Garretson

Advisor, MyAlerts


Discussion Questions

DISCUSSION QUESTIONS: What impact do you think Storefront and similar marketplaces will have on the price of pop-up real estate and retail real estate as a whole? Could such a model scale and succeed in smaller cities as well as large?

Poll

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Anne Howe
Anne Howe
Member
7 years ago

Brilliant! And while I have some concern about a marketplace driving pricing up, the immediacy of being able to search for space and move fast to create an experience is fantastic for marketers that need to keep ahead of the curve. I can see this happening in the U.S. marketplace and it will likely be as disruptive as Airbnb. I can also see service companies using this as well as retailers and classic brands.

Max Goldberg
7 years ago

Storefront and other pop-up locators offer numerous benefits. For mall owners and real estate holders they represent a possible solution for empty space. For consumers they present a treasure hunt. For brands they offer the ability to reach consumers without long-term leases. In the short-term I don’t see them driving up traditional retail rents, but that could change as more brands come on board.

Dan Raftery
7 years ago

The basic economics of supply and demand should move the pricing, which it sounds like is already in motion. The early opportunity to capitalize on dark store locations is likely to diminish as Storefront and others grow their businesses.

The concept is a great fit for special marketing events, similar to what works well at large gatherings of all types, from marathons to summer festivals to NASCAR races. The trick for pop-up stores is being in a location that can draw.

Jasmine Glasheen
Member
7 years ago

Storefront will work as a kind of pop-up shop Travelocity, letting retailers compare renting options in target neighborhoods. Just as travelers use price comparison sites regardless of the scale of their destination, so will retailers use Storefront to rent small- and large-scale real estate. After all, even in less populous neighborhoods retailers want to rent in prime shopping areas.

Bob Amster
Trusted Member
7 years ago

The allure of the pop-up is not solely a lower price, but the flexibility of not having to commit to a long-term lease. Storefront and others may drive up the price of pop-up real estate but the markets always find their balance, and Storefront’s challenge will be the ability to continuously find desirable locations. If the interest in pop-ups is truly increasing, then the availability of desirable space will decrease and prices will go up.

Lee Kent
Lee Kent
Member
7 years ago

With so much vacant space available due to many store closings over recent years, I don’t see this venture impacting real estate prices in a negative way any time soon.

This is an excellent concept and can only help some malls start to thrive once again. With the variation and, in some cases, the short-term nature of certain pop-ups, consumers will be much more interested in visiting the malls to take a look and see what’s new.

And that’s my 2 cents.

Adrian Weidmann
Member
7 years ago

I love this concept. The availability of flexible retail real estate combined with technology that enables a 100 percent accurate consignment business process is, in my opinion, the future of brick-and-mortar retail. New innovative products — from apparel to IoT devices — are being introduced at a rapid pace and the pop-up store, enabled with the proper technologies, will allow the small brands that make these products to showcase and sell them without getting lost and mired in sluggish processes and the politics of established big box retailers.

Patricia Vekich Waldron
Active Member
7 years ago

I think it’s a great opportunity. It offer retailers and other brands the chance to reach new customers and experiment with new offerings, concepts and services while at the same time using excess real estate with a flexible model.

Ralph Jacobson
Member
7 years ago

It was definitely becoming an opportunity for someone to jump on. If this is managed well, the scalability will increase and its cost-effectiveness should rival traditional real estate costs.

Kim Garretson
Kim Garretson
7 years ago

I think what’s interesting is that there are more firms popping up around this trend in addition to Storefront. For instance, Susan Sandler’s Pop Up Summer creates pop-ups not relying on retail space, like the Birch Box Beach Cart. And Etsy is doing a lot to help individual sellers and groups of its sellers put together innovation pop-ups. I see a lot of innovation coming in the space in 2017.

Naomi K. Shapiro
Naomi K. Shapiro
7 years ago

Pop-ups are where the action is. And the market will bear what pop-ups are worth as they grow more popular. Good question about smaller city appeal of pop-ups or if you need a larger population and bigger shopping centers to make them worthwhile.

Dave Wendland
Active Member
7 years ago

Pop-ups are revolutionizing retail … and I believe they are here to stay (consumers are responding well!). My hope is that retail’s price per square foot does not squelch the growth of this format. I’d much prefer seeing short-term occupied space than vacant storefronts. Wouldn’t you?

Larry Negrich
7 years ago

Great way to fill temp and non-traditional retail spaces. Most operators will always prefer long-term tenants but the flexibility provides a great option for all parties.