The flexible use of short-term retail is the perfect opportunity for retailers and e-commerce brands to experiment and be impactful. Short-term retail strategies are on the rise, as it’s a low-risk experimental play that could reap huge rewards. Used as a marketing tool, these strategies are ruling retail this year, be it the RealReal announcing 2018 the year of the pop-up stores or the fact that huge physical retailers like Toys R US and malls across Americas have officially shut down.
Renting a space on short-term is a trend that’s here to stay and affect consumer views (and wallets) for the positive. Here are 3 reasons why a short-term space should be a high priority for your brand.
1.Short-term rentals are low-risk.
By renting a short-term retail space, brands are capitalizing on the digital generation’s need to ‘experience’ without shelling out tons of cash for a long-term, costly lease. According to TimeTrade research, roughly 85-90% of retail is happening in-store, and brands can capture this demand in any allotted window they choose – be it a week, or a few months – and drive measured results during this time period. For online-only retailers, this physical presence is especially important, since they might have fewer resources and funds to get into a top-notch, high-traffic retail space long-term.
Additionally, the nation’s high commercial real estate vacancy rates are prompting landlords to rethink their own leasing strategy, with negotiations being more favorable for the renters. With lower risk, and more vacant space than the nation’s seen, renters can get the short-term space they want without breaking the bank.
2. Renters can test and expand into new markets.
Short-term rentals are a great opportunity to expand your brand into a new market, or test a physical location out for the first time. Brands like Everlane and Warby Parker have experimented with this concept in multiple cities, eventually leasing brick-and-mortar space in specific locations. Storefront has been popping up with e-commerce brand MM.LaFleur to strategically acquire new customers in new cities, from LA to Dallas. Their goal is to “provide our returning customers with a rich and immersive experience that will allow them to experience our brand in a new way,” using the temporary nature of short-term to give such impact. Setting up for short-term in different cities gives brands unique consumer data, builds deeper relationships, and increases brand awareness, providing them with unlimited opportunity for growth.
3. Renters can experiment.
With short-term, retailers and renters can use temporary retail to experiment with products, collections and collaborations. A short-term lease can act as a case study that brands can use to either build out a permanent product line or get to know their consumers more from a physical outpost. Take Diesel, for example, who announced its new knock-off collection with a pop-up store in Soho to sell limited-edition merchandise and get to know its consumers better.
Using short-term space is a smart way for brands to announce temporary collaborations and collections as well. High-end fashion brands like Louis Vuitton are using short-term spaces to partner with artists and showcase new designs and branding, an experimental collaboration that came alive through the help of a physical space as opposed to just selling and announcing it online.
Whether it be purely experimental, expanding into new markets or because short-term is low-risk, brands are considering short-term retail spaces to expand their business and boost sales.