Pop-ups offer strategy for small-business success

The Latest Scoop recently signed short-term leases for stores in Victoria and Calgary

The Latest Scoop owner Deb Nichol started selling online during the pandemic | Chung Chow

While Deb Nichol jokes that she may be the only retailer in the world crazy enough to be expanding during the pandemic, her recent expansion certainly puts her in rarified company.

The owner of The Last Scoop fashion and home decor chain opened her ninth location in Calgary’s CF Chinook Centre in late April. Earlier in the month, she opened her eighth location in Victoria’s Mayfair Shopping Centre. A third store that she opened in September was at Guildford Town Centre.

Each of these new locations is a pop-up store, or one that operates with a short-term lease. The lease for the store in Victoria is four months, while the one in Calgary is for seven months. Nichol, however, views both as likely to become permanent locations.

“People are still shopping,” she said. “We will probably see a couple of new pop-up stores as early as this year, starting in September.”

Pop-up stores have long been a strategy for new brands to get brand recognition.

Vancouver-based menswear seller Indochino in 2011 launched its first in a series of pop-up shops in Vancouver to help customers get accurate measurements.

In 2014, the company opened its first permanent showroom in East Vancouver, near the Port of Vancouver, in what was then part of its head office.

It now has nearly 40 permanent showrooms across North America.

“The pop-up strategy allows a brand to test the waters in new locations,” said Retail Insider Media owner Craig Patterson. “A physical presence gives the brand a level of credibility, as well as brand awareness.”

Nichol started small, with a pop-up store that was open for three weeks in West Vancouver’s Dundarave neighbourhood in 2004.

The store was distinctive in that it not only sold women’s fashions, jewelry and handbags, but also furniture.

The store was a booming success, she said. The next year, she opened Vancouver pop-up stores for eight weeks during the summer, and then for another eight weeks into the holiday season.

Dozens of pop-up stores would appear and vanish within quick succession during the next decade.

“Over the years, I opened up to four pop-ups at a time, and they would either open simultaneously throughout the city, or would rotate in different neighbourhoods, throughout the city,” she said. “The longer I was in business, the longer they stayed open.”

The business model was a success, but Nichol decided to start opening permanent locations to appeal to customers who wanted to be able to go to a store and be confident that it would still be there. Having permanent locations also helped her retain staff, she said.

Nichol opened her first permanent store in 2016, at 2928 Granville Street, where she had enjoyed success with pop-up locations.

Other permanent stores came in rapid succession in West Vancouver, Kitsilano and Gastown.

“We then opened two stores within six months of each other in Toronto,” she said.

Operating retail stores during the new era of social distancing and COVID-19 safety plans has been a challenge, she said.

“It really calls you to action and forces you to be adaptable, to look at it as an opportunity, rather than to just look at it as a negative challenge,” Nichol said.

She arranged to have someone set her up with an e-commerce store via Shopify (TSX:SHOP) within two weeks of the pandemic being declared.

“We hadn’t had e-commerce until then,” she said. “Our stores were too busy. We had no time. Isn’t that a terrible problem?”

While her stores were temporarily shuttered, she started to offer private appointments to allow customers to come in one at a time.

The result was a 100% conversion rate, where everyone made a purchase, she said. Even better was that her customers were now making purchases that were about three to four times the value that had previously been the norm.

Staying profitable during the pandemic has paved the way for her expansion to Surrey, Victoria, and Calgary. Nichol was also able to take advantage of lower lease rates at malls.

Patterson said mall owners increasingly allow tenants to lease space for shorter time periods. In addition, they are increasingly flexible, and willing to offer percentage rent, which fixes the cost of the lease as a percentage of sales.

“That removes the risk for the retailer to open in that location,” he said. •

gkorstrom@biv.com

@GlenKorstrom