The arrival of e-commerce giants like Amazon and Alibaba have brought with it despair for brick and mortar stores around the country. Former storefronts like Toys R Us and mall favorites like Brookstone have seen the end of their days thanks to the recently coined “retail apocalypse.” Even luxury retailers like Nordstrom and Barney’s have suffered in recent years, with the latter opting to close its doors once and for all as sales plummet in favor of online shopping. Pop up stores, however, are thriving. The temporary storefront model is nothing new—shops like Spirit Halloween have been implementing the strategy for years now—but they’ve quietly become one of the most successful storefront models in recent years. Here’s why:
A Closer Look At Spirit Halloween
It’s easy to discount temporary stores like Spirit Halloween as nothing special. At first glance, the temporary storefronts seem nothing more than meme-worthy for their ability to manifest in an abandoned Big Lots seemingly overnight. A deeper look into the strategy behind Spirit Halloween, however, reveals a carefully executed plan to make a lot of money with very little cost.
Spirit Halloween is owned by Spencers Gifts and has been since the company purchased the temporary retailer back in 1999 when the franchise had only 60 seasonal shops nationwide. Spencers Gifts, a permanent gag gift shop that has managed to survive in the retail apocalypse despite the fact that malls are a thing of the past, carries an inventory much like its Halloween shop. The inventory in each shop thrives on trends that have longevity—things like lava lamps, classic Halloween costumes that never really go out of style, and branded gifts for franchises that people will always love. Superhero t-shirts, old school Nickelodeon cartoon toys, and phallic bridal shower decorations line the shelves of Spencers Gift shops around the country.
At Spirit Halloween, the same idea rings true in a much bigger way. Customers at Spirit Halloween shops are likely to encounter the same Halloween costumes they saw in the shops as children. Very few of these costumes (witches, prisoners, zombies) go out of style, meaning the company can carry the same inventory year after year for years—possibly decades—at a time. In addition to the fact that many of these costumes are made for mere pennies in foreign countries using cheap materials, Spirit Halloween can upsell their inventory at exponential margins while sitting on the products as long as they need to.
The company never has to have a sale, either, because they’re only ever in business between the late summer and Halloween. Where other companies and grocery stores seem desperate to rid themselves of their seasonal items, Spencers Gifts simply closes up shop and packs away their inventory until the following year when they can continue selling the same products at a higher price to account for inflation. Your parents may have paid only $20 for the same costume you just spent nearly $50 on, but the costume has likely been sitting in the same packaging, year after year, nonetheless. For its more trendy costumes, an online sale gets rid of the remaining inventory that cannot be sold the following year.
The Pop Up Model Has Become The New Norm In Retail
For other online retailers, brick and mortar has been a lucrative way to build brand recognition and generate social media buzz for a company. Glossier, the cult-favorite skin care company that started with just a couple of products online, has earned a reputation for its Instagram-friendly pop up shops throughout the country. Rent in many high foot-traffic areas of major U.S. cities may not warrant a full-time shop, but the unicorn company has leveraged these spaces to its advantage with temporary retail shops.
Cities like Seattle, Miami, Austin, and Boston are among a few of the U.S. cities to see the direct-to-consumer beauty company cause a splash. Each location is tailor-made to fit its host city, sending the already cult-like following running for a chance to see what interiors the company has dreamt up for the pop-up. In Seattle, the interior space was inspired by the lush, outdoor ecosystem of the Pacific Northwest. In Los Angeles, the now permanent location on Melrose Place drew inspiration from the red rocks of the American Southwest, making each shopping experience more of a destination than a necessity.
The stores, however, run only for a couple of weeks at a time. The inventory of the shops is nothing different from what Glossier already carries online, and the fast-growing beauty empire is able to use that to its advantage by never sacrificing on lost inventory. Its most recent pop up shop in Austin, Texas, brings the kitsch of old-American diners to life in new, imaginative ways. Retailers should take notes from both Glossier and Spirit Halloween, as the imaginative business strategies have helped each company rake in millions of dollars each year—at little cost.