With the holiday season upon us, urban areas such as New York City are teeming with holiday pop-up shops – from Bryant Park to Union Square. According to a recent article published by CNBC.com, commercial real estate firm CBRE reports that the holiday pop-up trend will continue to “balloon.” While it’s true that pop-up shops are popular around the holidays, many retailers are opening these temporary retail locations to publicize new services or products beyond the holiday months; and landlords are benefiting as well. With popular retailers opening up at empty storefront locations, the heavy foot traffic is making these spaces more desirable for tenants to eventually sign a long-term lease after testing the market – and this trend is on the rise.
Bisnow.com recently published an article citing that brick-and-mortar retail continues to decline nationwide. New York City for example is now feeling shifts the market is taking towards online shopping. Interestingly enough, according to data compiled by Cushman & Wakefield, rents have dropped across 14 of Manhattan’s retail corridors, while pop-up stores have grown in popularity. Pop-up shops are a way for landlords to increase foot traffic to an empty storefront in hopes that a client may sign for a long-term lease, especially in neighborhoods such as Manhattan’s SoHo, where retail has taken a hit. According to an article recently published in The New York Times, “between 2010 and 2014, rents for stores in the former industrial district in Lower Manhattan soared by 75 percent, to an annual $860 a square foot, or $4.3 million a year for a 5,000-square-foot storefront.” However, empty storefronts in SoHo are more prevalent than ever before as the economy continues to grow, and retail rents soar at an astronomical rate. According to CBRE, “between 2010 and 2014, retail sales in Manhattan climbed 31.9 percent, while rents soared by 90 percent.”
The answer to the vacant spaces, for some landlords, have been pop-up shops, many of which, have attracted customers away from the “e-commerce experience” by becoming more interactive. InStyle reported on Victoria’s Secret’s pop-up shop that was running for 10 days in SoHo, saying the interactive experience provided customers with a winter wonderland oasis that included a giant slide and ball pit with “larger-than-life” photo opportunities. CNNMoney.com also reported that Amazon opened five pop-up stores at various Whole Food locations, where customers had the chance to test out Amazon devices such as Echo smart speakers and Fire tablets.
Tech giants and retailers aren’t the only short-term tenants signing up for a pop-up location. Artists such as Future and most recently Taylor Swift are promoting their music by opening pop-up locations where fans received an interactive experience while buying their merchandise. According to Billboard.com, coinciding with her new album release, Taylor Swift opened a pop-up shop where fans bought merchandise from her new album, Reputation, and were able to experience her “Look What You Made Me Do” music video in person by getting an up-close look at her outfits and taking a photo on the throne from the set.
As the retail market begins to shift, it’s important to take into account the strength of pop-up shops and how these temporary retail locations have been used to strategically market an empty storefront, and bring back the experience and excitement of brick-and-mortar shops.
