BUSI
4600 Dr. Bruce M. Firestone
Copyright.
Frans van Lavieren, Ottawa,
Here today, Gone tomorrow!
A new phenomenon in retailing is
popping up all over. “Guerrilla stores’ in major cities around the world like
NYC, London, Tokyo, Paris, LA, Shanghai, Berlin open up for two weeks to a
month or so[1]. They set up in temporary vacant
storefronts, sell trendy exclusive products to action figures, and then
disappear after a short time. The temporary locations have a “get it while it
lasts” appeal. The concept is pioneered 4 years ago by Russell Miller, founder
of Vacant (www.govacant.com), who works with emerging brands as well as big
manufacturers. His business has grown 60% during the past year[2]. Other
well known large companies have copied this concept successfully like Reebok,
Amazon.com, Target and the Breast Cancer association. The question that rises
is ‘Why is Guerrilla retailing so successful?’ and ‘Is this type of
selling sustainable as a business?’
A human being is by nature curious and wants to distinct his or her self from others. Guerrilla retailing or Pop-up stores appeal to both instincts. Several guerrilla marketing techniques are involved in Guerilla retailing. This is how it works and why it works. A few days before opening they spread tons of flyers and posters through the city, striking slogans like “Get it while it lasts” or “Here now, gone tomorrow” emphasizing their short presence and the exclusivity of their products. This creates a buzz, because it is mysterious. The shops are often located in vacant buildings on high traffic streets. But because the building is vacant and last minute leasing, it is cheap. The owner of the building knows it is not going to be leased or sold for that month and will consider it as sunk cost, resulting in a low leasing fee. They keep the space raw on the inside and striking on the outside through paintings and posters. So every time people pass, they get curious and want to take a look and afterwards they spread the word again. Because the shop pops-up out of nowhere, unannounced till only a few days before opening, a lot of people talking about it, the local media wants to know more about it as well. And when that happens their presence is known.
Another important factor is the “exclusivity” or “uniqueness” factor, bringing limited editions and hard to find products to the stores. Consumers are always looking for new, fresh exclusive products and Pop-up stores tantalize consumers with the promise of something out of the ordinary and come with a built-in exclusivity due to the limited time span[3]. This again creates a buzz and reinforces its attractiveness. And because of the limited lifespan of the store which creates a sense of urgency in the aisles, the shops are sold out before the end of the month. The group that responds well to the pop up offer is defined by youth, high disposable income, and the need to be an early adopter not only for retail products but in a very broad spectrum[4].
Large established companies like Reebok, Amazon.com, Delta Airlines, Suave hair care (Unilever) and Target use Guerrilla retailing as a marketing stunt. They open up stores on A-locations in the major cities of this planet. Not only to generate sales in the stores, but especially to introduce a new brand, to promote their latest product line, to test the market for new product lines or to give a brand a new boost. They often are; supported by a celebrity, a limited creation by a famous designer or to sponsor a charity fund, any of them will result in extra media attention. Even without the media, it will create a buzz. This again will drive consumers to the pop-up store. This is a typical form of guerrilla marketing, a small investment and effective communications with great returns in sales if not in brand value (Levinson 1993). Negative cost marketing can be recognized in this type of selling as well. ”This means that people are willing to pay you for the privilege to market your stuff for you”[5], for example shirts with the big Nike “swoosh” on it. Nike gets free advertising when people walk around in it. The guerilla store gives this an extra boost by the attention it draws to itself because they use the brand they sell to promote their store. The brand itself doesn’t have to pay anything for this.
Large consulting firms believe there is a third use of the pop-up store concept, “Getting information from the consumer”[6]. It has given their clients a rare opportunity to directly communicate with their end-users. Through this concept they can find out why they buy and even more valuable why they don’t buy a product! Their willingness to pay for a product so they can better set their prices is another. So in the end both the customer and the company benefit. So it can be used for market research purposes as well and successfully[7].
However, an important factor in this concept is curiosity factor. The impact of this factor will vanish when the concept is used for several times in the same area. This is a huge drawback when you are trying to make a business out of it, because there is only a short time span to make profits. On the other hand there are a great number of markets, geographically as well as in product categories. And exclusiveness is also a very important factor. When using the guerilla shop concept as a business you’ll have to make a choice between either new ways of attracting customers, like additional unique promotion, or permanently open stores in the major cities as soon as the concept lost its appeal, that is when the major cities are exploited, what will take years. The latter is in my opinion the best alternative since their will always be a market for exclusivity, and there is more time to be profitable. Especially for Vacant it will be crucial to settle first because their guerrilla retailing concept has worked as guerrilla marketing as well. It has established their pioneering name within the target groups, which will result in long-term competitive advantages[8].
When using it as a guerilla marketing tool, especially for established brands, it is an effective tool to create a buzz around the product or brand that is being marketed. So as a marketing strategy it is innovative, fresh, cheap and appealing to customers.
Guerrilla stores will be a commonly used concept in the future, serving diverse purposes.
[1] Collett, Nigel. The new
look in retail design- popping up in a street near you.
[2] G.M, The Entrepreneur, January 2005, page 64
[3] Wilson, Marianne. Retail to Go. Chain store age, August 2005, page 132
[4] Collett, Nigel. The new
look in retail design- popping up in a street near you.
[5] Mark Gencher and Bruce Firestone, Why People will Pay you to Market your Stuff.
[6] Koch, David. Pop-up stores buzz: temporary stores represent good marketing opportunity. Retail traffic, May 2005, page 49
[7] Ibid, page 49
[8] Kerin R.A, Varadarajan
P.R., Peterson, R.A.(1992),” First-mover advantage: A synthesis, conceptual framework, and research
propositions.