Updated: Jan 26, 2021
Visit downtown Fergus Falls, and you’ll likely notice a new addition next door to Sugarbomb. The Hastings family, owners of Sugarbomb, are collaborating with local baker, Jeney Christensen, to share her sweet treats with the community. Peney Cakes, the latest pop-up shop to grace downtown, will celebrate its grand opening on June 27th. But, Fergus Falls isn’t the only city experiencing an influx of pop-up retail locations. This business model has been utilized throughout the world by a variety of new and established brands such as Glossier, Gucci, and Lego. So much so that the industry has been valued at roughly $50 billion and shows no signs of stopping.
What is a Pop-Up Shop?
Shopify defines a pop-up shop as a “short-term, temporary retail space where brands — usually ones without a physical presence — can interact in person with current customers and communicate their message to potential new ones.” Pop-up retail locations are great for businesses of all sizes. However, this business model is especially ideal for those still in the beginning stages. It provides an accessible way for entrepreneurs and small businesses to test the waters before making a larger, more permanent investment.
Pop-up locations offer a wide array of benefits, including:
Interacting face-to-face with customers
Create buzz and a “get it while it lasts” urgency
Testing new markets and revenue streams
Creating brand awareness
Marketing products around a specific sale, holiday, or season
So, what exactly makes pop-up shops so successful? We’re glad you asked!
Why Do Pop-Up Retail Shops Thrive?
There are many reasons pop-up shops are successful. Not only are they an affordable business model, but they also offer versatility and new ways to connect with a target audience.
1. Pop-Up Shops are Cost-Effective
A budget-conscious business owner considering opening a physical location can benefit from the affordability a pop-up location offers. While factors like location, duration, and size can impact the cost of a pop-up, even businesses on a limited budget can find a location that works for them. Having a temporary physical location lets business owners experience the benefits of a brick and mortar store without the commitment — a sentiment Christensen appreciates.
She explains, “I’ve never really wanted to jump into a permanent brick and mortar model. There is an incredible amount of capital needed to do so, and that kind of commitment has never appealed to me. When Kristi suggested renting the space next to Sugarbomb to use as a pop-up shop, I thought, ‘Yes! That’s the exact next step Peney Cakes needed to continue to grow!’”
2. Pop-Up Shops are Versatile
What’s so great about pop-up shops is that they can be tailored to suit a variety of needs. From a mobile pop-up to rented gallery or event spaces, the sky's the limit. A popular form of pop-up shop is a pop-in, which is a store within a store. This type of collaboration is common between similar businesses, such as Peney Cakes and Sugarbomb, and allows the pop-up retailer to take advantage of the established business’s customer base.
For the Hastings family, the flexibility of a pop-up is important. “The business model for a pop-up is much more fluid … We can make changes to quickly adjust our sails,” Kristi Hastings remarks. A large business would require feedback from many decision-makers, which is not the case for a pop-up. “At Sugarbomb, our family can sit down at the table and talk about what we can change to stay viable and implement that change the next day.”
3. Pop-Up Shops Bridge the Gap Between Online and Offline Retailing
While an online business model helps keep overhead costs relatively low, it can be limiting. Online retailers without a physical location tend to miss out on additional ways to increase revenue, improve customer awareness, and develop and test new products and ideas. A temporary pop-up shop is the perfect solution for bridging this gap. It allows the business to go where its customers are and interact on a more personal level, which is something Christensen is taking full advantage of.
“I love nothing more than to see faces light up with joy when someone has a beautiful, delicious dessert set in front of them.” Running the pop-up shop lets her experience that joy in person more frequently and see what flavors and treats her customers tend to gravitate toward. Christensen notes, “With the pop-up shop, I can test the market for individual cupcake sales and get my name out there to the community.”
The ability to test the market is one of the many reasons Hastings believes in the power of pop-up retail. She says, “If candy didn’t work in our community, we could try something else. We’re light on our feet in that regard; we can buy a small number of new items to see if it sells before ordering a larger quantity.” Finding what works and what does not without investing a lot of time and money can be a game-changer for small businesses.
Pop-Up Shops Thriving in Fergus Falls
Pop-up shops have proven to be a successful business model for several Fergus Falls businesses. While Sugarbomb is now located in a permanent space downtown, it originally started as a pop-up in 2019. The idea came to the Hastings family while brainstorming ways to bring people downtown. The seasonal shop was such a hit that it’s now a permanent fixture to downtown Fergus Falls.
With a successful pop-up under their belt, the Hastings family wants to pay it forward. In addition to partnering with Peney Cakes, they want to encourage other local businesses to test the model — even if they already have a brick and mortar location. “A pop-up is a great way to advertise your traditional business by moving a small piece of it to a different location to reach a new market. Look for where your customers are and bring the pop-up to them. If they like what they see, it’s more likely that they will seek out your traditional business.”
While Christensen’s pop-up shop is temporary, she has big plans for Peney Cakes and hopes to have a cupcake food truck in the future. Until then, she plans to soak up the benefits of a pop-up model. “I think the pop-up shop will be an incredible tool to do market testing for flavors, individual cupcake sales, and general interests in other treats. The cupcake truck will essentially be a mobile pop-up shop, so this opportunity will be the perfect learning experience for me!”
Thinking a pop-up might be the right business model for you? Greater Fergus Falls can help with that! Get in touch with our team to learn more about the process and some of the great locations available in Fergus Falls.