By CHARLENE KOMAR STOREY
A store that’s here today and gone tomorrow may seem an example of a quick failure. But if it’s a pop-up store, it may have been very successful indeed, its short life span being part of the design. And a temporary storefront approach offers some outstanding possibilities for pawnbrokers.
Pop-up stores, especially during the holiday season, offer two main uses for pawnbrokers: selling merchandise and buying gold. Pawning is more problematic, as most pawning licenses are strictly for a given location. But selling vintage goods or jewelry or buying gold can be very promising indeed.
Pop-ups may seem like a fad, or something for New York City or Los Angeles. But the concept has been around long enough to pass beyond the mere trendy, and can — and does — work in malls and shopping districts all over the country.
In fact, pop-up stores have been with us for a while, although not under that name. Halloween costume stores that appear in September and disappear with the holiday are perfect examples of pop-up stores. You might even call farm stands pop-ups.
But since the turn of the century pop-ups have taken on an expanded role. Today, they meet many needs: as an added outlet for a certain period of time; to test a new market, and for publicity.
Setting up a strictly retail, seasonal pop-up store has been done by everyone from those independent Halloween shops to giants such as Toys R Us; last winter the behemoth chain opened some 350 Holiday Express stores — 260 in the company’s Babies R Us stores and 80 in malls and other shopping centers.
As the economy has gone down and retail vacancy rates have gone up, the concept has shown added appeal for landlords as well.
Although the situation will vary from market to market, generally there’s no lack of high-visibility retail space. As of mid-year, the United States retail real estate rate was 7.1 percent, according to CoStar Group, the commercial real estate research and information service. Landlords that may have turned down short-term leases in the past may be more eager to get any money they can out when many properties are standing empty. And if it looks like the economy is improving in a given area, they have the benefit of not locking themselves into a long-term low rent.
Try a New Market
Besides simply making money, a pop-up store can have an added benefit: it allows a pawnbroker to test a market. If the store is very successful, it may make sense to make it permanent.
That was H&T Pawnbrokers’ experience. The United Kingdom chain made an aggressive move in 2009, opening 56 Gold Bar outlets in malls. They were meant to be temporary, but were so successful that the company made most permanent.
Today, there are 45 Gold Bar units; earlier this year, H&T also converted 6 retail mall units into gold shops or a new format, shops casually called “H&T Lite” — smaller stores, usually between 250 and 300 square feet, that are focused solely on gold buying and selling jewelry. It plans to have 10 of the lite stores open by the end of the year.
In the United States, pawnbrokers should be aware of the increasing number of state and local laws governing gold buying. Although licensed pawnbrokers often won’t have a problem, some areas are banning all gold buying from locations without a lease lasting at least a year, so it pays to make sure of the legalities before making further plans.
Of course, besides protecting consumers, those laws can also benefit pawnbrokers, as they chase out the hotel and home party fly-by-nights. Not only will that leave more business for pawnbrokers, it also will protect gold-buying from getting a bad reputation from these rip-off artists.
Getting Your Name Out
Another plus for pawnbrokers is that a pop-up offers publicity. While that may make some think of pop-ups that have been used to hype movies such as Tron or music such as Jay-Z and Kanye West’s “Watch the Throne” CD (see sidebar), in fact pop-ups naturally combine serious buying and selling with publicity.
Even if your pop-up is only open for a month or two, it gets your permanent outlet’s name in front of more customers. If you’re selling in the pop-up, make sure customers know they can return or exchange at your regular location. Money envelopes and bags with your pawnshop’s name and address are great reminders.
These approaches also will emphasize the temporary nature of the store. That’s a good thing, as consumers are becoming more and more attracted to what marketing experts call planned spontaneity.