Pop-Up Shops Prep for Winter Sales Lift

Pop-Up Shops Prep for Winter Sales Lift
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This story originally appeared on CNBC

Pop-up stores or small, seasonal shops are the little retail engines that could and do deliver in sales. The temporary spaces crop up in locations ranging from malls to churches during the holidays, and a prominent pop-up location is New York City's Bryant Park.

New data find that while some of these temporary stores may not be large enough to rival malls and big-box retailers, the shops bring in an estimated $2 billion during the important holiday rush, according to PopUp Republic, an online resource for pop-up shops. It compiles data on the industry's size and dollars spent.

For Cliff Huang, owner of Cliff Belts, opening a pop-up store brings in buzz and new customers who may not be familiar with his belts, bags and other merchandise—all made from harvested tree bark. Based in New York City, Huang rents a space in the Bank of America Winter Village in Bryant Park for the holiday season. In addition to pop-up spaces, most of his sales are online.

"Here in Bryant Park, it's just a really cute place to do holiday shopping—it's the whole atmosphere," Huang said. "Customers are in and out all day long, but around 2 p.m. it can be really hard to even walk through the aisles around here."

In the two months leading up to the holidays, Huang says he will do about $60,000 in sales. And while he declined to reveal what he pays in rent for the seasonal store, he says it's well worth the cost.

Buying local

The appeal of shopping local for interesting finds is what attracts new pop-up shop customers, according to PopUp Republic. The online community features 1,500 pop-up shops across the U.S., and 25 percent of the listed shops are specifically holiday stores.

While prices depend on the size and location, pop-up store rents can be as much as $2,500 a day, according to PopUp Republic. There can be additional costs, up to $200 a day, for insurance and local licenses.

It surveyed shoppers on why they patronize pop-up shops. The top reason? About 61 percent said they wanted to find seasonal products. Roughly 39 percent said they wanted unique products or services, and 36 percent of those surveyed said they wanted to shop locally.
More shoppers are supporting local, small businesses, as was the case on Small Business Saturday on Nov. 29.

The National Federation of Independent Business found 88 million consumers shopped small. That's up 14.9 percent from last year, according to the Small Business Saturday Consumer Insights Survey, released by the NFIB and American Express, which sponsors the event. Saturday sales in the U.S. reached about $14.3 billion, up 2.1 percent from $14 billion in 2013.

And for some entrepreneurs like Rachel Mednick, founder of Lucy & Leo Organic Baby, based in New York City, having a pop-up store in Bryant Park is a great way to test the waters before investing in a brick-and-mortar location. Mednick's products are all "Made in the USA" and sold primarily online.

"That's in my plans for the future," said Mednick of opening up a permanent physical store. "Probably not for several years—I would really have to scout out a great location. But I love retail, I love being with my customers all the time, so that is something that's definitely in the stars for me."

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