A Taste of Retail

October 31, 2017

 

Over the spring and summer of 2017, I did rounds at various weekend markets, such as the Georgetown Sunday market and the Chantilly Big Flea. It was hard work, with early mornings, lugging around a canopy, weights, display tables, chair and inventory.

 

Outdoor markets are a particular challenge as you are subject to the elements - a little wind can knock over your merchandise, and the weather is a factor that can make or break your sales. Indoor markets on the other hand are way more comfortable, but the market fees are more expensive - which cuts into your margins. Nonetheless, I persevered with whatever opportunities I could manage, because it's part of growing a business.

 

And then...one fall day, I got a direct message via Instagram. The Georgetown Pop-Up Shop was interested in carrying some of my products, and invited me for a meeting. Off I went to meet with the business partners, and I learned about the latest trend in the retail.

 

A pop-up shop is in essence an indoor market, giving the appearance of a retail destination because of its location. eg in a busy street with some level of foot-traffic. It works by renting (sub-letting if you will), a small space (often referred to as a 'plot') within its store to vendors. The main differences between a pop-up shop and a weekend market are: (i) a pop-up shop is a semi-permanent fixture, often having a lease on a building for a few months; (ii) that your merchandise remains in the store (no need to dismantle and pack up your inventory at the end of the day); and (iii) the pop-up shop will sell your merchandise for you (subject to specific terms that you might negotiate) on your behalf.  It may look and feel like a retail destination, but unlike retail where your merchandise is bought outright at wholesale prices, the pop-up shop will allow vendors to sell directly to customers at retail prices.

 

Different pop-up shops have different arrangements with their vendors. Some require the vendors to devote several hours a week to coming into the pop-up shop and watching over their own plots. Others require vendors to be present full-time.

 

For vendors, there are pros and cons to pop-up shops: the pros are that one is tapping into a different market that may not have been accessible in the past - and if a pop-up shop has a great location, it gives vendors exposure to a whole new line of prospective clientele. The environment is also very comfortable, as it's indoors, and it helps vendors build experience on how to re-stock inventory on a different scale than at a weekend market.

 

But the cons must also be considered, and there are several: given that pop-up shops are temporary arrangements (hence the name pop-up), a store needs to invest heavily in advertising to ensure that the maximum number of customers visit the store. No matter how great the location, relying on foot-traffic alone is not a guarantee to drive the required sales, since the nature of any pop-up store is like a one-hit wonder. Related to this is that pop-up shops rarely have an established clientele, and will rely on vendors to have a following. However, this is a catch-22 method of attracting customers, because vendors with a substantive following, would not need a pop-up shop to drive sales.

 

Secondly, the negotiated fee of the vendor's plot is often steep. And in essence it is the price of the building lease which has been passed onto the vendor. This is another reason why heavy advertising is essential, to help the vendors with sales, given that margins can become precariously narrow.

 

Thirdly, contract negotiation has to be one that suits both parties. Things for vendors to consider are: pop-up shops may charge additional fees to 'manage' a vendor's merchandise; the required number of hours for a vendor at a pop-up store may become onerous; one's plot location within the store may be subject to change depending on the ongoing marketing strategy of the pop-up shop; and, since customers often buy multiple different things when visiting a store, the vendor must insist on the clearest of accounting as one's sales are sometimes co-mingled with that of other vendors.

 

I entered into a contract for a month, to test the market at the Georgetown Pop-Up Shop. It was a good experience, and I liked the business partners - they were friendly, had a great work-ethic, and the atmosphere in the store was always positive. But in the end, the bottom line is what drives a business...and for my specific products, upcoming holiday sales at the weekend markets seemed to be the best way to go.

 

Below is a picture of me with my other mom, Mrs. G, who dropped in to see me on my first day at the Georgetown Pop-Up Shop.

 

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