Emerging Retailing Models in Licensing: Pop-up Stores
Overall, pop-up stores bode well with Licensing as there is usually an element of temporality when there is a licensed property, since some franchises are perennial while some are just a flash in a pan. Especially for movie tie-in properties, time frames for licensed products inherently have different cycles and it may take weeks to get licensed merchandise to store using classic or traditional distribution platforms. With pop-up stores, however, all that is needed is a product and a suitable location. Combined with the prerequisite of flexibility and the spontaneous nature of some licenses, pop-up stores present many opportunities.
Pop-ups can act as billboards for the franchise enabling licensors to communicate the brand story directly with consumers. According an interview with Paul Gitter, SVP at Disney Consumer Products, published in License! Global Magazine, “Pop-ups allow you to fully brand the experience and to have more control over how products are presented. Pop-up environments are usually focused less on a large inventory of products and more on highlighting select items, which helps create a heightened sense of demand and urgency to buy.”
The power of pop-up
Pop-ups offers an opportunity for licensors, licensees and retailers to have a short-term presence in popular high consumer density areas, such as malls, without locking them into annual rental agreements helping them to avoid high costs. Moreover, they can create a buzz around the franchise helping them to stand out from rest of the licences in today’s crowded market place. Not only are they perfect environments for testing and establishing new licences, they can also be used to reinvigorate established franchises. They could also present a new platform for lifestyle franchises which may have difficulties securing a shelf space for their merchandise in other established channels.
Pop-up stores is now a legitimate retail channel thanks to its advantages, and an increasing number of licensors are experimenting with the platform. As was highlighted by in an interview with LIMA, “ pop-up stores are here to stay. They are exciting and the public likes them ”. These stores are exploiting the opportunity presented to them whether they are opening just during a craze, such as a movie launch, or gifting season.
Licensors embrace the pop-up store format like never before
In October 2016, Disney, the world’s largest licensor, opened a pop-up store in Newcastle’s (UK), Eldon Square Shopping Centre just in time for the crucial Christmas shopping period selling a wide range of Mickey Mouse, Star Wars, Marvel and Frozen products, alongside an exclusive range of seasonal products. Aiming to create a buzz around its franchises, Disney also included sections in its store where customers were able to have their photos taken with a Hulk figure and a Princess throne. It was reported that Disney Europe opened nine pop-up stores across the UK over the 2016 Christmas season.
If set up and managed well, pop-up stores provide a unique and exciting experience to connect with fans. For many consumers, it is almost like attending a special and exclusive event. NBA teamed up with US department store Bloomingdale’s in January 2015 to open basketball-inspired, in-store pop-up shops across 16 select locations to celebrate the 64th NBA All-Star Game. According to Global Licence! Top 150 Global Licensors 2016 study, The National Basketball Association is the world’s 19th biggest licensor with USD3.2 billion in total retail sales of licensed merchandise in 2015.
In celebration of its updated Powerpuff Yourself fan engagement campaign, Cartoon Network, which owns Ben 10 and The Powerpuff Girls licences, opened a weekend pop-up shop in New York in October 2016. The Powfactor Shop featured exclusive and limited edition merchandise where fans experienced the new Powerpuff Yourself maker and were able to print their personally created designs on products, including t-shirts, mugs and bags. According to Global Licence! Top 150 Global Licensors 2016 report, CN is the world’s 30th largest licensor with USD2 billion in total retail sales of licensed merchandise in 2015.
In May 2016, Smiley opened a pop-up store at the Galeries Lafayette Beijing mall, showcasing licensed bags, cushions, hats, mugs, sunglasses and plush toys.
But, be aware…
Pop-ups could also be a poisoned chalice. One of the tricky questions is, who will be running the stores? Also, some balancing might be needed. A brand cannot possibly open pop-up stores constantly. Otherwise, the novelty factor would be lost, which is one of the key USPs. Additionally, franchises cannot nurture a relationship with retailers if they tilt the balance too much towards stand-alone pop-up store format. Yet, it should also be noted that if they opt to launch a limited-time shop within a section of an existing retailer, this could well help to start a long-standing relationship which would potentially benefit all parties.
Furthermore, some experts believe that the pop-up store formula is more suitable for franchises that target adults/grown-ups in licensing. As for pre-school properties, however, a number of licensors aim to create the experience impact or the buzz through events and tours rather than forming shops. It could also be argued that these marketing strategies co-exist well. Events and tours could be seen as key for sustaining and growing a fan base for franchises, particularly in the pre-school arena. Yet, if they are to be supported by the pop-up platform in retail, the return could potentially be greater.
Finally, since pop-ups are a reflection of the brand, there should be high quality in execution. There is no one ‘fit all’ solution globally. They need to be customised in accordance with a country’s economic environment.
Disney Pop-up Store in Newcastle, UK