The Budgy Smuggler store in Manly
If your commercial property is without a tenant at the start of summer then you should consider the prospect of marketing it to potential short term tenants as a pop-up store.
Pop-up stores are attractive to emerging businesses and large corporations alike, with summer seeing a surge in enquiry numbers from businesses keen to test the market or deliver a premium experiential offering.
This is especially so in Manly and the Northern Beaches where swelling summer visitor numbers are an attractive prospect for brands.
A short term lease or pop-up tenant can also be operational within weeks, compared to a long-term tenant who might take months to occupy the premises, according to Pine Property’s Patrick Kelleher.
“If a long term tenant is not secured and undertaking a fit-out by the start of December, it is unlikely they will be in before February or March at best, so you should consider short-term leasing or pop-ups,” Mr Kelleher said.
“Pop ups are popular with local brands because it enables them to dip their toe in the market and ascertain the local appetite for their product before they commit to a long-term lease,” he said, adding that landlords also benefit by generating an income while searching for a long term tenant.
Budgy Smuggler’s pop-up success story
One Manly brand that began its bricks and mortar presence with a pop-up store was Australian swimwear icon, Budgy Smuggler.
Having traded online for over a decade they tested bricks and mortar with successful pop-up store in Manly over the 2015 October long weekend.
It was a success and they followed it up with a three-month pop-up store from November 2016 to January 2017 near Manly Wharf, which also traded well.
Budgy Smuggler General Manager, Brenden Hartmann said the sole intention of the pop-ups were to test the appetite of the market before entering into a long term lease.
“After we closed at the end of January, we still had people turning up and calling to ask where our shop had gone. This was the sign that we had enough traction to open a permanent store in Manly,” Mr Hartmann said.
They have since also trialled a summer pop-up store in Brisbane and will be opening one in Melbourne in 2019.
Today Budgy Smuggler operates a permanent shop from Darley Rd in Manly, a location secured by Pine Property.
“It’s a little tricky in Manly to find the right space. As a small business, we couldn’t afford to be directly on The Corso but we wanted to be close enough that people could take a slight detour to find us. In the end, it wasn’t too difficult,” Mr Hartmann said.
He recommended that brands who are considering a pop-up store be strategic around what they stock.
“You don’t need to stock everything, which we’ve tried to do in the past. Just bring the best sellers and a handful of the rest.”
The “retail experience” boom
The pressures felt from online has seen premium brands adapt with small format retail pop-up stores designed to deliver an experiential offering in smaller footprints.
Increasingly, small format pop-up stores focus less on sales and more on providing a personalised shopping experience, collecting customer data and reinforcing brand messaging.
“It enables a large retailer to have a presence in a high street location and drive consumer engagement and online sales,” Mr Kelleher said.
2017 research from the UK found that a retail revolution is taking place with an increasing focus on delivering a high quality “retail experience” through environment, education, escapism and entertainment.
Due diligence still required
While pop-ups are a great short-term commercial leasing solution for landlords, Mr Kelleher emphasised the importance of vetting any potential pop-up operator, especially when they are an emerging business.
“You must have the right operator who knows what they are doing. You can run into problems if they are misusing the property,” he said.
“You still need to ensure the entity is qualified, has insurance and is willing to pay an appropriate bond.”