Pop-Up Retail in Montana: Trend or Here to Stay?

Pop-up retail is gaining popularity around Montana, largely in single serve events.

While more metropolitan markets host a number of spaces exclusively for short and longer-term pop-up use, it seems that many landlords tend to prefer the stability of an established tenant. 

But the $10 billion dollar pop-up industry is making more inroads in the Big Sky State. Montana landlords are wondering: is renting my space out for short-term pop-up shops the right move? 

What does pop-up retail look like in Montana?  

A good local example is the Top Hat’s collective pop-up sale. Downtown retailers, like Betty’s Divine, Olive + Iron and One Eleven, bring their wares together for one big day of sales. This type of sale might also be referred to as ‘flash retail.’

For companies that had never had a traditional brick-and-mortar location, using the pop-up model can be a stepping stone to a storefront. Tandem Doughnuts, a farmer’s market wunderkind, hosts a weekly pop-up at a small bakery in the University District. At the same time, they are seeking a more permanent location. 

Some say FOMO (the Fear of Missing Out) plays a role in successful pop-ups. When marketing is done right, combined factors of limited availability and exclusive access make pop-ups an extra hot commodity.

And when it comes to Tandem Doughnuts, we’re inclined to agree. With limited space at the farmers market for social distancing, lots of Missoulians missed out on our favorite weekend treat. 

A happier medium between single serve and month to month pop-up shops are “pop-to-perm.” In a pop-up location, tenants prove the sustainability of their concept. If proven,  the business can transition to a permanent location with a long term lease. 

This bore out in Bozeman, where national retailer Lululemon started with a pop-up location. Eventually, the retailer moved on to establish a permanent storefront in the downtown area.

Imagine Nation Brewing took the pop-up concept one step further, hosting a pop-up film festival (back when gathering in tight groups for a flick was acceptable). Now they’re back with a holiday shopping pop-up. With a pop-up shop, Imagine Nation is supporting small, local businesses and bringing foot traffic into the brewery.

Pop-ups in major markets 

In larger markets, pop-ups are big business. Even major brands like Best Buy provide floor space for pop-ups, known as “pop-ins.” Recently, Target made headlines with a similar concept by installing mini Ulta stores inside Target locations

While rents can be lower and terms much shorter (just a few hours in some cases), retail landlords struggling with empty spaces can turn a profit by renting the spaces out for pop-up shops. It’s also an option for buildings with small or awkward spaces that won’t suit a long-term tenant needing access to bathroom facilities or storage. 

In larger markets, pop-ups host retail, art galleries, food and beverage tastings and private events. While COVID has put a damper on private events, it has caused the e-commerce business to ramp up.

Many e-commerce operations are eager to provide customers for a real-life opportunity to check out the look and feel of their products. In this way, pop-up shops humanize the e-commerce experience.

Pop-ups can also help a retailer keep the doors open during a short term displacement, such as a renovation or a flooding or fire incident. Instead of shutting down during these periods, operations can simply move to an interim location.

Upshot

The combination of FOMO and experiential shopping is going to keep drawing consumers to pop-ups. For an empty space, or one that’s hard to fill, pop-up shops may help fill a rental gap. 

But, landlords should consider the needs of pop-up shops. Wifi, air conditioning, and an aesthetically pleasing interior are important. Contact the Sterling CRE Advisors team for information on the best use for your facility – is a pop-up space right for you?

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Maggie Collister

Maggie Collister is the Project Marketing Manager at Sterling Commercial Real Estate (SterlingCRE), where she combines her extensive background in real estate development with a strategic, data-driven approach to support commercial real estate projects across Montana.