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Popping up Pop-Up Stores

Recently, from July 9th to August 7th, the contemporary designer brand, Koimooi, opened a pop-up store in Seongsu-dong. The pop-up store, named “pinkO’clock,” aims to engrave the brand’s signature color, pink, onto customers’ minds. Moreover, various enterprises are attempting pop-up store marketing following the economic recovery after the pandemic. Based on this trend, the Sungkyun Times (SKT) would like to introduce the origin and effects of pop-up stores in Korea and some proposals for future pop-up stores.

Pop-Up Stores in Korea

Origin and Development of Pop-Up Stores

A “pop-up store” is an offline store that opens in certain places for only a certain period of time. The first pop-up store originated in 2002 when Target, a wholesale market in the United States, rented temporary stores by failing to install new ones. As this became popular, other companies began benchmarking Target’s marketing solution. At first, a pop-up store operated by giving out free samples and introducing new products to passersby. It was a type of test marketing aimed at predicting future demands and promoting new products by making them viral. Since it did not have any special meaning beyond a temporary store, it did not attract customers. Thus, the foot traffic in the area was vital. However, in 2004, Comme des Garçons, an experimental fashion brand, opened a pop-up store in Berlin, Germany, where fashion was underdeveloped. Following its success, companies abroad began to reach out to unpopular places that fit their brand image. In the case of Korea, pop-up stores began to appear in the 2010s, especially in the cosmetic industry.

How the Trend Has Developed

Unlike pop-up stores overseas that open in the suburbs, domestic pop-up stores mainly gather downtown, such as in Seongsu-dong and Garosu-gil. For example, in Seongsu, popups such as the “Ghana Chocolate House” and “Sealy Mattress Factory” were popular during the first half of 2022. Recently, luxury brands and department stores have also joined the popup trend: customers’ reactions directly lead to increased profits. For instance, Louis Vuitton opened a pop-up restaurant in Cheongdamdong, “Pierre Sang at Louis Vuitton,” in June 2022. Moreover, unlike in the past, when B2C (business to customers) companies took up most of the market, more B2B (business to business) companies have also started to open popup stores. For example, the team collaboration tool company, Flow, recently opened a pop-up store where customers can experience software team collaboration tools. Its main reason for success was opening the store in Yeouido, as it planned to expand its target to the banking and public sectors.

Pierre Sang at Louis Vuitton (hypebeast.kr)

Reason for Sucess

Why the MZ Generation?

The Millennials and Generation Z (MZ generation) is receiving attention as the primary consumer target of companies. According to Park In-ho, a professor at SKKU, pop-up stores are a marketing method with significant advantages, as they allow brand participation through direct experience. Similarly, the MZ generation prefers direct experience rather than simply owning a product. They do not judge the product simply through “taste” or “performance,” but by the brand’s image and values. Hence, a place that provides experience is essential even if it does not directly result in higher sales. Companies often affiliate with each other to create a space where customers can experience the brand’s philosophy and authenticity offline. For instance, in July 2022, a pop-up store named “24 Black,” a collaboration of Emart 24 and a computer game Black Desert, convinced the customers with its unique and consistent concept of premium black. Moreover, the MZ generation enjoys limited experiences. Limited edition goods in pop-up stores are attractive for the MZ generation, since they tend to spend money on hobbies and resell goods. For instance, the Wonsoju pop-up store that opened in The Hyundai Seoul, a mall in Yeouido, represents the success of limited-edition goods. Curiosity towards Wonsoju’s limited goods led to a hike in sales.

Wonsoju (eyesmag.com)

Pop-Up Stores as a Marketing Method

Pop-up stores temporarily borrow other spaces, so they require less fixed costs and can identify the customers’ market preferences in advance. This is an advantage, considering the real estate situation in Korea. The short contract period reduces the building’s vacancy rates, which benefits the property owner. Also, pop-up stores lessen the burden of fixed costs in long-term rent for the company, creating a win-win strategy for both stakeholders. Moreover, before, customers were reluctant to visit offline markets when they sold premium products or products they could not test. However, pop-up stores significantly reduce the burden on customers since they can freely experience the product and the brand. From the company’s perspective, it has the advantage of utilizing viral marketing to deliver the brand’s image and increase awareness quickly. According to Kyunghyang News, Park Kyung-bin, who oversees promoting Shinsegae Starfield, stated that pop-up stores have the power to attract customers from various occupations. As pop-up stores lead customers to promote the brand themselves, and as such voluntary participation positively affects sales, companies strive to create a “fandom” for their brand in the long run.

Ways to Move Forward

Cost Problems and Improvements

Although pop-up stores were established exclusively for promotion purposes, they still require extra marketing and advertising costs. As such, an additional labor force is needed. Furthermore, as the size and types of pop-up stores have increased over the years, it has become more expensive to deal with space rental fees, labor supply, interior fees, and auxiliary facilities. For instance, in May 2022, domestic online shopping commerce Musinsa opened “Musinsa Terrace” to create a space in which small companies can start up their own pop-up stores. Since Musinsa Terrace was only designed solely for opening pop-up stores, companies are burdened with a low rental fee compared to other general malls. Also, Musinsa participates in the entire planning process: from the interior to the rental of necessary items. Thus, small companies can save costs spent on pop-up stores by collaborating with bigger companies, which is a mutual benefit for both businesses.

Delivering the Values of the Brand

Recently, pop-up stores have been operating mainly by selling consumer goods for the MZ generation, such as fashion items, food, and beverages. Such marketing techniques require much more capital as the content’s volatility is emphasized. Thus, mass-produced pop-up stores may harm the meaning of a “unique experience.” To solve this problem, Professor Park Inho stated that pop-up stores should not simply aim to promote the brand’s product but should contain storytelling factors that deliver the brand’s core values. Pop-up stores must keep up with the trend, but companies should remember that it is more critical to provide the brand’s values in a distinctive manner. For example, “Simmons Grocery Store” recently opened a popup store in Cheongdam-dong. The pop-up was unusual, as the store did not showcase its principal product: mattresses. Instead, colorful groceries filled the place, and visitors could experience the brand’s “fun and bouncy image.” Since its exterior image was inspired by a French charcuterie shop, it also made the customers feel like they were visiting a shop abroad.

Simmons Grocery Store (magazine.brique.co)

Pop-up stores tend to receive much attention from the MZ generation since they appear and disappear quickly in downtown areas. As such, marketers should put more effort into reviving a brand’s value through pop-up stores. Kingos should also take part in such a unique experience by visiting a pop-up store nearby.

김하진  0804grace@g.skku.edu

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