Pop-up roadshow takes pureplay retailers offline

Internet Retailing

20th Oct 2016

Amazon and Google have done it; so have Warby Parker and Bonobos. The trend of pureplay online retailers opening physical pop-up stores is well established by now. New research from online accounting software company Xero provides some insight into why.

In a recent survey of Australian consumers, over half of respondents (51 per cent) said the ability to try things on and examine items in person is one reason they like to shop instore. Around one-third of respondents said they like being able to browse products, while only 7 per cent said they enjoy the in-person customer service. Clothes, footwear and accessories are the items Aussies most prefer to buy instore.

While new technology has enabled retailers to improve the online shopping experience – assistants powered by artificial intelligence are making e-commerce websites easier to search and navigate and bots are responding to customer queries – conveying the look and feel of products online still presents a challenge.

For online apparel sales in particular, virtual fittings have a long way to go. Many e-commerce websites now disclose the model’s height and their typical clothing size (as well as the size of the item they’re wearing) to help shoppers gauge their correct size.

Meanwhile, some specialised retailers ask their own employees try on clothes for customers. This involves customers sending in their measurements and brands having someone on staff with similar proportions. And it’s hard to imagine such a solution scaling in any major way.

Pop-up stores, on the other hand, let pureplay retailers establish a temporary physical presence and give customers the chance to try items on and see them in-person. Hong Kong-based e-retailer Grana uses pop-up stores to introduce its brand to customers in new markets, so they can determine their size before purchasing online. According to co-founder Luke Grana, a permanent bricks and mortar location isn’t necessary, since customers don’t need to try on every item once they understand how the brand tends to fit them.

“I think the savvy retailers know what tactic and channel to use and when to use it. The rise of the internet and the technology available means retailers can grow a lot faster online. But to have a sustainable business it’s about having that omnichannel strategy,” James O’Connell-Cooper, head of direct marketing at Xero, said.

Xero is helping a number of small pureplay brands take a similar approach with its ‘pop-up roadshow’, which kicked off in Brisbane on Sunday, October 16. The first stop involved online-shoe retailer Radical Yes manning a stall on Brisbane’s Queen Street Mall and was a resounding success, according to Melbourne-based founder Kerryn Moscick.

“It’s about expanding markets and getting more reach, finding more customers and getting more eyes on the brand,” Radical Yes founder, Kerryn Moscick said.

“For us, as a shoe retailer, having a physical presence is fundamental to what we do and we’ll always have some kind of bricks and mortar activation happening so people can access the fit,” she added.

While Moscick says that she always wants the brand to have some type of physical presence, she remains daunted by the prospect of committing to a long-term commercial lease.

“The rent is crazy in Melbourne … I’m not sure that we will feel comfortable committing to a long-term lease because the kind of investment that’s needed terrifies me,” she said.

“When you’ve got small amounts of funding you have to think about how to get the best return on investment. There’s a certain level of stock and turn over you have to have, It’s prohibitive for a lot of smaller brands.”

Moscick predicts that pop-ups will become increasingly popular with smaller pureplay brands in the coming years. This will certainly be the case over the next few months, as Xero’s ‘Cloud St roadshow’ continues. Four more stops are planned in Newcastle, Wollongong, Parramatta and Melbourne before Christmas.

A version of this story first appeared in print in our sister publication, Inside Retail Weekly.