Pop-up retail is now more common in Canada than ever, and industry experts predict that the trend will continue in a big way into 2018. Pop-up retail is being seen in shopping centres, on urban street fronts, and even within stores — and it’s seeing success for various reasons.
David Ian Gray, retail consultant and head of Vancouver-based think tank DIG360, predicts that 2018 will be “the year of the pop-up” in Canada. While pop-ups aren’t necessarily a new thing, pop-up retail is now considerably more sophisticated, with landlords going out of their way to accommodate temporary tenants, he said. The phenomenon has been gaining traction over the past several years — pop-ups were originally intended for brands to engage with customers, he noted, and retailers quickly co-opted the idea, with considerable success.
In 2017, Canadian shopping centres have been facilitating pop-up retail in a big way, with Mr. Gray describing how pop-ups are driving traffic to centres through hype and perceived scarcity, and how some shopping centres are now taking the lead in hosting pop-up spaces in their malls. Not only are individual retail spaces being filled on a temporary basis — at Toronto’s Yorkdale Shopping Centre, for example, landlord Oxford Properties partnered with design firm figure3 to launch CONCEPT, a permanent 3,600 square foot multi-tenant space dedicated to pop-ups. Mississauga’s Dixie Outlet Mall has done something similar, but with a twist — ‘The Living Room’ as it’s been called, is a 3,100 square foot space that can be activated for free, and can be utilised for retail or other purposes. Not only is it popular, it has a waiting list.
[Above: 3D tour of 'The Living Room' at Dixie Outlet Mall, by Warren Vandal of GEOmarketing Solutions. Mr. Vandal is available to do similar tours of other spaces]
“All retailers should consider pop-ups from a strategic level” said Mr. Gray, noting that even luxury brands are in on the temporary retail phenomenon. In the spring of this year, Louis Vuitton hosted a pop-up at Nordstrom’s flagship in Vancouver. Department stores such as Nordstrom are hosting pop-ups in a big way, and the Seattle-based retailer operates permanent pop-up spaces at its Vancouver and CF Toronto Eaton Centre Centre flagships. Recently, Gwyneth Paltrow’s GOOP popped up at both stores, showcasing product hand-picked by the celebrity. A technology-themed pop-up has since replaced GOOP.
Pop-ups aren’t necessarily a new thing, noted Mr. Gray — for years, brands like Aritzia have hosted seasonal warehouse sales. But pop-up retail is now considerably more sophisticated, with landlords going out of their way to accommodate temporary tenants.
Prior to opening permanent stores, plenty of brands have launched by utilizing pop-ups — two Vancouver brands immediately come to mind, including ‘technical cashmere’ brand Kit and Ace and custom suit maker INDOCHINO.
While some pop-ups may lead to permanent situations, some are also decidedly seasonal. Spirit of Halloween will soon start opening in retail spaces temporarily, selling costumes and related ‘spooky’ items. Smoked meat and gifts brand Hickory Farms will pop-up in Canadian malls again this year, utilizing a real estate strategy that includes kiosks as well as full-sized retail CRU’s on a temporary basis.
Demand for pop-up retail space is unprecedented, says Linda Farha, Founder and Chief Connector at pop-up go, an online platform that helps pair retailers with available temporary retail spaces, which also features a curated pop-up match service that provides access to the ever-growing pipeline of pop-up seekers looking for space. Pop-up retail wasn’t on the radar for the most part, she noted, and now business is booming. Downtown Oakville is a unique example — Ms. Farha’s pop-up go partnered with Bentall Kennedy to lease out 8 individual retail spaces on a temporary bases, ranging from three days to three months. The intention is to create interest and variety in the area in order to drive more traffic to the downtown core, with a rotating group of vendors that consumers know won’t be there for long.
Ms. Farha of pop-up go noted how perceived scarcity works in a pop-up retailers favour — if consumers know that something’s available for a limited time, they’re more likely to go before it’s gone.
"Pop-ups create an air of excitement due to their temporary nature, and also allow retailers to test out new concepts and new locations prior to opening permanent stores,” said Ms. Farha, who went on to explain how pop-ups allow retailers to test the market without being bound by long-term leases and costly tenant improvements, while also providing retailers an opportunity to establish a presence in the market prior to opening their permanent store in their ideal location. Pop-ups also provide e-commerce retailers the opportunity to test concepts in a physical form, and are also useful for 'guerrilla marketing’ initiatives, she noted.
Ms. Farha explained, as well, that pop-ups are not only a tool to generate sales, but may also serve to create an experiential component that can bring a brand to life. “Pop-ups can also help brands understand their customer and serve as a form or market research,” she noted.
When asked if pop-up retail is reaching the saturation point in Canada, Robert Luciano, Principal at retail consultancy decisionSMART gave an unequivocal ‘no’. “Plenty of traditional retailers haven’t even scratched the surface in terms of exploring and utilizing pop-ups,” he noted, explaining that there is considerable opportunity for retailers of all shapes and sizes to utilize temporary retail in order to build buzz, as well as to drive sales.
Streetfront pop-up retail is already huge in Canada this year. Toronto’s Queen Street West is a notable address for concepts seeking to gain exposure, particularly the stretch of the street between University Avenue and Spadina Avenue. Ikea recently opened a temporary cafe and retail space at 336 Queen Street West, featuring various games to enhance the overall experience. Up the street at 322 Queen, Sears Canada launched its current pop-up in the spring to showcase how its has ‘changed’, profiling its new private label fashions as well as ‘The Cut’, its new off-price concept. Nestlé Canada recently opened its Bär Häagen-Dazs at the Spoke Club at 600 King Street West in Toronto, which will remain open until Saturday, July 22. Bär Häagen-Dazs hosts 'Häagen-Hour’ — the brand's own play on happy hour, where those 19 and over can listen to music and enjoy specially curated ice cream alcohol-infused cocktails.
Sleep brand Casper (known for its 'bed-in-a-box') has just launched a pop-up on Ossington Avenue in Toronto, further engaging consumers face-to-face in an effort to build relationships. Founded as an online retailer, Casper has found that it can drive sales online by offering physical experiences, building on its 'nap tour' that the brand launched in Canada last year.
Joseph Gatto, owner and broker of the 202 Queen Street West space, is in talks with a number of interesting concepts to occupy his three-level space. Mr. Gatto explained while it’s ultimately the goal to get a long-term tenant at 202 Queen Street West, a number of interesting offers has him considering using it as a pop-up space for the short-term — if not longer.
Even Toronto’s ‘Mink Mile’ has recently seen pop-ups — several years ago, ice-cream brand Magnum set up a pop-up near the Yonge Street and Bloor Street West intersection, and several months ago The Body Shop opened a temporary location at 93 Bloor Street West (soon to be occupied by luxury brand MCM, which has leased the space long-term).
Ahead of its Canadian retail store launch, Vancouver-based accessory brand Herschel has launched a ‘lemonade stand’ in the Deep Cove area of North Vancouver, featuring a variety of product designs, as well as lemonade in a variety of colours, matching the product. The almost 300 square foot space features both cold-pressed lemon juices in four flavours — plain, strawberry, algae-infused Blue Majik, and Charcoal (priced from $4), and 100% of proceeds from the juices will be donated to Artstarts in Schools, a local nonprofit that works to increase access to arts-based education for youth across B.C.
For some brands, pop-ups are an important part of their retail strategy. Montreal-based Yoga and athletic brand Lolë has been utilising pop-ups for several years now to build brand awareness (Tony Flanz of Think Retail represents Lolë as broker in Canada), and pop-ups have proved to be a way to determine if a market might eventually support a permanent store.
Technology conference Dx3, in partnership with Oxford Properties and Retail Council of Canada, held a competition several months ago, where the winner won a one-month pop-up space at Yorkdale Shopping Centre. The winner was innovative footwear retailer Tanya Heath Paris, which artfully created a temporary space with a simple, chic facade that was created by painting a plywood temporary storefront. The Tanya Heath pop-up gained the retailer exposure in Canada’s most productive mall, complementing the retailer’s permanent store in Toronto’s downtown Yorkville neighbourhood.
Landlord Cadillac Fairview notes that it uses pop-ups to provide an opportunity to broaden its retail offering, though it says that it focuses on the quality of the pop-up, rather than the quantity that open within its properties. "Pop-ups create a boutique-style shopping experience within the walls of our shopping centres, which supplements the offering of the larger national brands”, said Stephen Yau, VP, National Leasing at Cadillac Fairview. "There is a sense of uniqueness in finding products that you cannot find in other shopping centres and may not otherwise have the opportunity to interact with in an offline setting,” he said.
Furthermore, "Pop-ups have created an opportunity to work with new, upcoming brands that, due to a number of factors, may not otherwise be able to enter one of our shopping centres. The pop-up program allows these brands to test a market or a new concept, without committing to a long-term lease”. Mr. Yau noted that Cadillac Fairview’s end goal "is to incubate these retailers, with the intention of transitioning them into long-term tenants. Pop-ups provide a window of time to allow these retailers to establish a presence in the market prior to opening their permanent store in their long term location. We have seen that this is beneficial to both the retailer and the landlord.”
Cadillac Fairview has hosted a number of significant pop-ups over the past year including the recent launch of a temporary WE store, which launched last month at Ottawa’s CF Rideau Centre. The attractively designed WE space will remain at CF Rideau until early 2018, with the intention of promoting the charitable endeavour while also selling product with proceeds going to causes that the WE Movement supports. A number of other innovative Cadillac Fairview pop-ups that have operated over the past year have included:
· Zvelle (at CF Toronto Eaton Centre & CF Sherway Gardens in Toronto): The higher-end direct-to-consumer footwear brand was looking to increase brand awareness, (most notably known for being a shoe of choice for Sophie Gregoire Trudeau), and the brand currently operates out of a retail space at Toronto’s Yorkdale Shopping Centre.
· Gifted by Air Miles (CF Shops at Don Mills in Toronto): The seasonal (holiday) pop-up engaged with Air Miles collectors face-to-face, with the pop-up providing shoppers with a unique shopping experience and an opportunity to find thoughtfully curated Canadian products,
· L’Intervalle – (at CF Fairview Pointe Claire, CF Promenades St-Bruno & CF Rideau Centre) opened originally as a pop up footwear store, and now boasts permanent locations at these malls (watch for a new article on Retail Insider about L’Intervalle this month),
· The Greenhouse (at CF Market Mall in Calgary): The eco-friendly brand growing throughout western Canada, featuring bamboo clothing, essential oils, and handcrafted jewelry,
· Nespresso (CF Galerie's D'Anjou, CF Promenades St Bruno, CF Fairview Pointe Claire, all in Quebec) - Cadillac Fairview says that this has been a huge success in its malls, and many have been or will soon be converting to permanent stores,
· A/MAZE (CF Fairview Pointe Claire in Montreal) a real life escape game rooms - the unique concept is exclusive to Cadillac Fairview, and
Pop-up retail is a phenomenon that has grown in popularity quickly, and experts are predicting that it will continue to gain momentum into early next year. Retail Insider will be following this trend and more regularly reporting on pop-up retail, as it has become an integral part of the Canadian retail industry.