Investments in Pop-up Stores : Alternative Rental Models and Vacancy Risk Reduction

This book focuses on two key challenges: the negative impact on property value and higher vacancy risk for pop-up shops. It suggests alternative rental models based on footfall and customer conversion rates and provides a strategic framework for real estate investors to develop and manage pop-up stores. The empirical study emphasizes the importance of data availability, market fundamentals, and the potential of the operator model for managing pop-up retail spaces. The retail real estate market in Switzerland comprises about 13.0% of total commercial areas. The growth of e-commerce, accelerated by the COVID-19 pandemic, is causing significant changes in brick-and-mortar retail. Real estate owners are facing higher vacancy rates, shorter rental terms, and lower rental prices. However, e-commerce has limitations that prevent it from fully replacing physical stores. Retailers are now seeking flexible and innovative spaces like pop-up stores. In Switzerland, pop-up stores are mostly used as marketing tools or to fill vacancies, rather than as a sustainable business model, due to their negative impact on property market value. This textbook has been recommended and developed for universitary courses in Germany, Austria and Switzerland. Management Summary Acknowledgments Table of Contents List of Tables List of Illustrations List of Abbreviations 1 Introduction 1.1 Market Context 1.1.1 Implications for Real Estate Owners 1.1.2 The New Purpose of Brick-and-Mortar Stores 1.1.3 Changing Retailers’ Requirements 1.2 Issue to be Explored 1.3 Objectives of the Analysis – Research Question 1.4 Delimitations of the Study 2 Literature Review 2.1 Definition and History of Pop-Up Stores 2.2 Types of Pop-Up Stores 2.3 Goals & Challenges of Pop-Up Stores – Retailers’ View 2.3.1 Goals 2.3.2 Challenges 2.4 Goals & Challenges of Pop-Up Stores – Real Estate Owners’ View 2.4.1 Goals 2.4.2 Challenges 2.5 Key Success Factors Essential Criteria Criteria for the creation of a special customer experience Criteria for the differentiation of pop-up stores from other marketing instruments Criteria for the sustainable effect of pop-up stores Macro Factors Micro Factors 3 Methodology 3.1 Research Strategy & Research Design 3.2 Research Question One: Alternative Rental Models 3.2.1 Data Collection Method 3.2.2 Sampling Strategy 3.2.3 Data Analysis Method 3.3 Research Question Two: Minimization of Vacancy Risk 3.3.1 Data Collection Method 3.3.2 Sampling Strategy 3.3.3 Data Analysis Method 4 Results Alternative Rental Models 4.1 Key Performance Indicators 4.1.1 Measurement of productivity for pop-up stores pursuing brand goals 4.1.2 Measurement of productivity for pop-up stores pursuing communication goals 4.1.3 Measurement of productivity for pop-up stores pursuing sales goals 4.1.4 Measurement of productivity for pop-up stores pursuing market testing goals 4.2 Potential Framework for Alternative Pop-Up Store Rental Models 4.3 Challenges 4.3.1 Determining the value of a customer visiting the store 4.3.2 Data Transparency 4.3.3 Data Collection 4.3.4 Legal and Ethical Challenges 4.3.5 Increasing Complexity and Uncertainty 4.3.6 Acceptance from Market Players 5 Results Minimization of Vacancy Risk 5.1 Product Category 5.2 Location 5.3 Goals 5.4 Attributes 5.5 Companies 5.6 Letting Process 5.7 Pricing 5.8 Physical Attributes 5.9 Challenges 6 Conclusion & Discussion 6.1 Data and Transparency are Key 6.2 Shift of Retail Market Fundamentals 6.3 The Potential of the Operator Model 6.4 Limitations of the Study 6.5 Need for Future Research 6.6 Final Remarks Bibliography Appendices Appendix 1: Research Question One: Overview of Retained Literature Appendix 2: Overview of Marketing Metrics Appendix 3: Interview Guides Market Specialists Pop-Up Operators Appendix 4: Interview Transcripts Bikini Berlin brands’n mind Pop Up Shops Research Project “Pop-up City” Authors