A way for small businesses to put their products and services directly in front of customers, pop-up shops can provide start-ups with a less risky and more cost-effective way to start trading.
A retail strategy that can be used by businesses of all sizes and in all industries, the UK pop-up shop industry was worth £2.3bn in 2019 opens in new window.
That amount is predicted to have grown since due to the effects of the Covid-19 pandemic on traditional bricks-&-mortar retail and property industries, with pop-up shops offering a way for new businesses to test their retail idea without being tied into lengthy or costly leases.
What is a pop-up shop?
A form of non-traditional retail, pop-up shops are a temporary retail opportunity for businesses of all sizes.
They are physical retail spaces for businesses typically in a busy public area, such as a market or shopping centre, and can range in size from a single stall to an entire retail unit.
Pop-up shops can allow business owners to exercise their creativity and create an engaging retail experience for potential customers.
Read our guide on how to use impulse purchases to increase sales opens in new window.
Why set up a pop-up shop?
Pop-up shops can provide small business owners with many benefits.
Increased brand awareness
There are many ways to increase brand awareness opens in new window for your small business – one could be to open a pop-up shop.
As pop-up shops run for a limited time, the resulting urgency and excitement could make your brand more memorable.
Depending on your chosen location, pop-up shops can also physically put your brand directly in front of potential customers opens in new window.
They can also be more experimental than core retail space, allowing brands to create more engaging customer experiences and a chance to discover products in a non-traditional environment.
For start-ups, they can get your brand noticed, create social interest, and pave the way to migrating to more fixed retail space opens in new window.
Can be more cost-effective than long-term shop space
Renting a long-term retail unit can be expensive and may also tie your start-up into long-term contracts.
Opening a pop-up shop allows you to pay fewer overhead costs opens in new window, have a shorter rental period, and go without any extra square footage or storage space, meaning you can save money while making an impact.
Easily trial new markets
As they are short-term and cost-effective, pop-ups can be an excellent way to test products and services in new markets opens in new window or soft launch products alongside your core offerings.
By talking with customers, you could conduct in-person market research opens in new window and collect valuable market data by asking them for feedback or their opinions.
This can help shape your start-up’s future strategies and provide helpful information on what customers think and feel about products opens in new window, your brand, and even ideas for retail environments.
Seasonal customer base boosts
Some businesses decide to run pop-up shops during specific periods of the year opens in new window, such as Valentine’s Day, the summer holidays, Halloween, and Christmas.
Since more people are looking to spend money during those periods, a pop-up shop can boost sales and expand your customer base opens in new window as shopping traffic increases.
This approach can be suitable for start-ups focused on seasonal products, such as fancy-dress costumes for Halloween or Christmas decorations over the festive season.
Read our guide on how to win customers opens in new window.
How to set up a pop-up shop
Before launching a pop-up shop for your small business, conducting research may be a good idea to assess if it is suitable for your start-up.
1. Conduct market research
As with starting any business, it may be worth conducting market research to see if there is a gap in the market your pop-up can fill or if a pop-up shop is even a good fit for your small business.
Examining whether similar businesses opens in new window have operated successful pop-up shops may be a good indicator of whether this is a viable business idea.
Read our guide on how to spot a gap in the market opens in new window.
2. Where to locate your pop-up shop
Choosing where to locate your pop-up shop opens in new window can be one of the most important things to consider when selecting a site.
Pop-up shops often rely on foot traffic, so a prime retail area such as a market, shopping centre, transport hub, high street, or even inside another shop opens in new window could be good choices.
Where you decide to set up your pop-up shop could also dictate the size of your pop-up, which could dictate how you customise the space and how much stock you can bring in.
3. Calculate finances
Setting up a pop-up shop is a business investment, so it’s a good idea to consider all financial aspects of the project beforehand, such as if your business can afford it, projected sales and profit opens in new window, customer payment options opens in new window, and financial and stock security.
For example, a simple payment system such as contactless could reduce the risk of having cash on-site while making it easier for customers to purchase goods.
Read our guide on sales forecasting opens in new window.
4. How will you staff your pop-up shop?
Every shop needs enough staff opens in new window to run smoothly, including your pop-up shop.
Your pop-up may be small enough to handle by yourself or with another colleague, but sometimes more help is needed, and you may need to employ several different staff.
Although often temporary employees, there are still rules and guidelines that need to be followed when hiring and managing employees for a short period.
You can learn more with our guide on hiring temporary employees opens in new window.
5. Compliance and protection
Like all other physical shops, even temporary pop-up shops have to follow regulations, such as food hygiene and food allergen regulations, if operating a pop-up catering shop, for example.
Other regulations, such as health and safety, must be followed to keep your customers and employees safe.
You may require a business license to run a pop-up depending on your industry – find out if you need one by visiting the Gov.uk website opens in new window.
How to make the most out of your pop-up space
Make it eye-catching
Bright colours, clear signage and branding, and smart use of the pop-up space are all ways to make your pop-up stand out from the crowd and draw in customers.
Providing customers with a memorable shopping experience may help increase sales and build brand affinity.
Carefully consider how much stock you need
Secure storage for stock is a priority when shopping for the right pop-up shop space.
Ineffective product shelving and point of sale could prevent customers from locating the products they need, while insecure inventory storage could result in losses through theft.
Promote on social media
A simple and free way to increase brand awareness and interest in your pop-up shop could be to share the news on your business’s social media accounts.
If you have the budget, consider using paid social media opens in new window to reach a wider audience, from boosting posts to inviting local influencers.
Read our guide on how to make social media work for a small business opens in new window.
Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.
Our free Learn with Start Up Loans courses opens in new window include:
- Entrepreneurship – from ideas to reality
- First steps in innovation and entrepreneurship opens in new window
- Entrepreneurial behaviour opens in new window
Plus free courses on finance and accounting, project management, and leadership.
Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.
