Overview: Pop-Up Stores

Pop-up stores are temporary stores opened to take advantage of seasonal demands, trends and events, or to support marketing campaigns. These stores let retailers showcase private-label products, experiment with new store concepts on a small scale, collect customer feedback on products and store design, and gain insights into evolving consumer trends and consumption patterns.

Among the companies to have opened pop-up shops are online pure-play retailer Jet.com, meal kit firm Blue Apron, brand owner Kraft, startup SÜPRMARKT and gourmet food retailer Harry & David. We provide more detail later in this report.

Pop-Up Stores in Grocery Retail

Apparel, beauty and fast fashion retailers have used pop-ups for some time, leveraging the temporary format to tap into short-term seasonal demand for their products. For these retailers, pop-up shops act as a marketing tool to create buzz on social media, allowing them to offer customers a unique way of experiencing the brand and products. Now, grocery retailers and brands are testing the waters, using pop-ups to promote private-label products and engage younger consumers.

While online has made huge inroads across the retail landscape, grocery remains a laggard. Our 2019 online grocery survey outlines the reasons why: The top reason for not buying groceries online was a preference for seeing and choosing products in person, the second-most-chosen reason was that respondents say they enjoy shopping for groceries in store.

In another survey conducted by facilities management company Vixxo in 2018, 87% of the 1,260 US consumers who responded said they prefer shopping for groceries in store. By age group, 96% of Baby Boomers and 81% of millennials said they prefer the in-store experience to online.

Retailers can capitalize on these consumer preferences by leveraging pop ups to create a more compelling shopping experience.

Younger consumers don’t just prefer enjoyable shopping experiences, many also want to share their experiences. Younger generations, such as Millennials and Gen Zers, are more likely to share on social media, and an aesthetically pleasing pop-up can serve as a great setting for sharing on social media, giving retailers added reach and brand awareness to customers’ social media followers.

Survey data bears out younger consumer’s propensity to share shopping experiences on social media. According to a December 2018 US survey by consulting firm Boston Retail Partners, 56% of respondent aged 18-37 said they would report an unsatisfactory shopping experience on social media, compared to just 27% of respondents above 38. Similarly, about 61% of 18-37 year olds said they would also report an exceptional shopping experience on social media compared to 29% of respondents above 38.

And, younger shoppers tend to spend more at pop-ups than older age groups. According to a survey conducted in the UK by the Centre for Economic and Business Research (CEBR), in the period July 2014-2015 (the latest period for which we have spending data for pop-ups), shoppers aged 18-24 spent an average of £132 at pop up stores, aged 25-34 spent an average of £161 – nearly double what their older counterparts spent.

Pop-up shops offer numerous advantages for grocery retailers: Lower rent and quick set up time are the most obvious benefits, but there are many more

Walmart/Jet.com Pop-Up Store

In May 2017, Walmart opened a pop-up store in New York via a partnership with Jet.com (owned by Walmart) and Story, a New York City concept store that changes its theme and appearance every four to six weeks. The tie-up created a theme called “Fresh Story” that showcased items such as cooking gadgets, ingredients, cook books and fresh produce – all arranged in attractive arrays.

The crucial part of the pop up was participation of local personalities such as Mario Batali, who showcased his collection of merchandise ranging from pasta to handmade cutting boards. Beauty expert Bobbi Brown exhibited the health benefits of fresh produce and promoted her new book, Beauty from the Inside Out. The pop up also offered workshops including cooking classes for kids and mixology lessons with Hella Cocktail Company for adults.

Also notable about Jet.com’s pop-up shop were a floor-to-ceiling installation of Jet shipping boxes and cherry scratch-and-sniff wallpaper on some walls.

Blue Apron Pop-Up Store

Blue Apron is New York-based ingredient and recipe meal-kit service. In May 2018, the company launched a national series of pop-up events known as “Unboxed,” with pop-up stores in New York City, mobile pop-up experiences in Los Angeles, San Francisco and Seattle, and free outdoor movie nights in Austin, Dallas, and Minneapolis. It was the first experiential retail venture by Blue Apron. Pop-up stores in New York City showcased new products and curated culinary programs from May 29 to June 24, 2018, with a new theme each week. The pop-ups also offered cooking classes and panel discussions with famous chefs.

The pop-up stores turned into an important channel for Blue Apron to showcase new products and gain consumer insight.

Kraft Foods Social Initiatives Through Pop Up Stores

Krafts Foods opened pop-up stores in Washington state in early 2019, offering food on credit to Federal government workers who were expected to not receive a salary due to the then-government shutdown. Federal workers were offered groceries on credit, but when customers did eventually pay, Kraft gave the money to charity.

SÜPRMARKT Pop-Up Shops

SÜPRMARKT is start up that sells low-cost organic foods through pop-up shops around southern Los Angeles. Even though South Los Angeles is home to about 1.3 million people, the area has only 60 grocery stores – and many households struggle with prices in regular supermarkets. Olympia Auset, the founder of SÜPRMARKT, aims to meet the needs of low-income households by offering organic vegetables, fruits and other items at affordable prices through pop-up shops. Auset updates locations on the website and social media. SÜPRMARKT also offers subscription service for weekly produce delivery priced at $100 per month.

Harry & David Holiday Pop-Up Stores

Harry & David, a gourmet food and gift retailer owned by 1-800-flowers.com, opened 20 seasonal pop-up stores in the 2018 holiday season. The company had opened holiday pop-up stores in previous years to take advantage of the biggest gift-giving time of the year. The pop-up stores included the same popular gift-basket items as Harry & David retail stores, including candies, chocolates, pears, popcorn and baked goods.

The holiday pop-up stores helped the company expand its presence in markets near Chicago and Los Angeles, and towns in the US Northeast. The company used a social media campaign with hashtag #sharemore to build awareness of the new pop-up stores.

Pop-Up Shop Market Overview

Retailers are embracing pop ups because of the many advantages in low cost, ease of building out, ability to offer an innovative shopping experience and as a means to test and promote private label products. Pop ups also help grocers reach young consumers. A national survey by the National Retail Federation and Forrester in March 2018 found that 24% of retailers had opened a pop-up shop in the US.

According to PopUp Republic, a social media marketing company, pop-up store sales contributed about $50 billion to total US retail sales in 2015. PopUp Republic also conducted a survey which found 61% of respondents shopped in pop-up stores to find seasonal products, while 30% said they shop in pop-ups for a fun experience.

Key Insights

More grocery retailers and brands will embrace and experiment with the pop-up store format to test new products, brands, store design and location. Pop ups help retailers drive customer awareness, trial private-label products and create unique shopping experience through fun activities, food demos and other events. Pure-play online grocers can also leverage pop ups to reach customers in the non-virtual world, for example showcasing new products before launching online.