20 Aug 2012

Warehouse considering use of pop-up stores

6:36 am on 20 August 2012

The Warehouse is considering opening pop-up (temporary)stores as another way to bring its wares to the high street.

Pop-up stores have become popular in Britain and the United States as a way to temporarily fill vacant high street stores and for firms to turnover stock in a short space of time.

Last month, the British government introduced legislation to cut red-tape and make it easier for people to operate pop-ups.

If The Warehouse does commit to pop-up stores it will be joining the likes of Microsoft, which last week, advertised for staff for 12 pop-up stores in the US and help boost its retail sales.

Pop-up stores do literally as they say - pop-up for a short-time and then disband; often to coincide with big spending seasons.

The British government sees the concept as a way to save its struggling high streets, so much so they commissioned an official report into the model and have now made it easier for retailers to set up shop.

Warehouse chief executive Mark Powell says there are several benefits to pop-up stores.

He says there are certain markets where it may not be possible to support a store for the full year, where as the product can be bought to customers at key event times such Christmas, Valentines or Easter.

Mr Powell says pop-up stores are just one channel the retailer is considering, and they would have the potential to feed back into its traditional revenue gatherer - its bricks and mortar stores.

"It's about saying in certain markets in certain channels - can we bring the offers to the customer that make it easier for them."

Mr Powell says pop-up stores require a different skill set to traditional shop fronts and are labour intensive, but he expects high turnover to offset the labour costs.

Merit seen in concept

Retailers Association chief executive John Albertson says the concept has merit in New Zealand.

He says in Britain there have been rows of derelict shops which have been converted into pop-up stores, which become permanent tenants because they have been so successful.

Mr Albertson says it might be an option in parts of Auckland, but location is still very important because a certain critical mass is needed in order to get people to visit them.

While there are benefits to pop-up stores, he says there also needs to be a balancing act to make sure operators of the store are paying competitive rent.

Mr Albertson says it can irritate other retailers if a pop-up store owner pays very low rent and is only there for a very short time.

But he says competition aside, pop-up stores are a good way to rejuvenate dying retail areas.