My recent podcast with Revo Hub and KLM Real Estate got me thinking about the power of pop-ups. Whilst pop-ups aren’t new to me, or many of you reading this, they are a foreign concept to a lot of people.

Pop-ups are definitely a growing presence in the high street, a retail space which has different businesses occupying the unit for short term durations. Anything from a day to a few months can be classified as a ‘pop-up’. They bring a vibrancy and excitement that traditional long term tenants or big brands can’t possibly be expected to drive all of the time (NB. a traditional lease is anything from 5 to 15-years). Pop-ups foster and develop community, often highlighting charitable and sustainable initiatives and provide huge value to the high street. Anyone who walks the high street loves to see something different, so why don’t we see more of them?

As a small business, one of the main things I have struggled with is finding spaces to host pop-ups. Landlords ideally want long term tenants for their spaces and if they are going to let their space out for a short-term, they want more money for it. It’s understandable from a landlord’s perspective, it’s just difficult when you are on the receiving end of it. As a start-up, in bootstrapping mode, balancing what’s affordable in the locations you want to be in is tricky. I’m not joking when I say I’ve had quotes for weekend pop-ups from FREE, to £21,000, which makes it pretty hard to gauge!

Businesses like Appear Here are doing their utmost to help get pop-ups into vacant space but they have a tough job convincing landlords of the upside of having one in their vacant units.

So here is my pitch to landlords, about why having favourable rates for pop-ups is a good thing….

1. It keeps tenants happy – the number of people who come into the store who live or work locally, always make a remark about how they love that the space is constantly changing. They use their local high street more than others as a result and probably (although I don’t think this has been studied yet) are more likely to renew their lease and stay in the area they like! For office workers, having an ever changing space on your doorstep makes coming into the office even more joyous. I think every landlord wants to encourage people back to the office as much as they can. When tenants enjoy where they work, they are more likely to stay in occupation by renewing or extending leases. This is an immediate benefit to landlords as it reduces rental void periods, there tend to be no Cap-Ex costs on a renewal and perhaps best of all, the agency fees on a renewal are less than a new lease. A rent renewal or extension costs the tenants less than it would if moving into a new, like-for-like space, therefore not only benefiting landlords, but tenants too!
2. It drives footfall and return customers -, as pop-ups are only short-term, they normally put a lot of time and money into marketing the event. It’s important they get the footfall and as a result, this benefits the whole street and the other brands on it. Often the following and customers from these smaller brands will travel all over London to see them. As a landlord, if your once vacant space has new tenants in the form of pop-ups spending money on getting customers through the door on a constant basis, it can only be a good thing! It’s a circular economy in the sense that one pop-up spends money to increase footfall, footfall increases over time. This temporary nature also almost creates a sense of curiosity, urgency and excitement. It builds community, fosters experience and camaraderie for all the local businesses. Who wants to visit a high street with a ton of empty units?
3. It can get you leasing enquiries and activates vacant space – building on the above, more footfall means more pop-ups want to operate in that space so the landlord has a space that is now in demand. In fact, all of the units we’ve done a pop-up in, regardless of whether they’re normally vacant, or normally a pop-up, have had leasing enquiries off the back of it. People are inspired by what they see in the space, getting ideas for their own business when they go to others – I know that I do. Whether it’s a permanent pop-up unit (bit of an oxymoron) which gets new brands interested, or a vacant retail unit looking for a long term tenant, raising the awareness of the vacancy, people being able to see inside and get a feel for the space, is the quickest way to help the unit get occupied.
4. You’re supporting small, independent businesses – often the reason that small businesses choose to do pop-ups or short-term lets is for financial reasons. Committing to a 5, 10 or 15-year lease is way too intimidating when we are struggling to predict the next 12 months. We don’t have the finances or backing to commit to this because we’re still figuring out strategy, and commercials. We want to try new locations, new audiences, test the concept, refine it, play around, bring in partners, remove partners, get feedback and hone our offering. Also with a lot of new businesses these days, trying to work out how to be either circular, sustainable, or simply ‘doing their bit’ often margins are tighter. Research shows that consumers are increasingly wanting to shop more sustainably, so if consumers are driving it, landlords are benefiting themselves as well as supporting initiatives which are trying to do better.
5. It drives value elsewhere for your asset – You need to own a few units, if not a street, or the whole building for you to benefit from this but if you’re an office worker and there is a coffee shop next to your reception – who would you prefer to see there? A chain or an independent? Not only is the coffee staggeringly better from the latter, but the experience is completely different. We are in a world, especially within retail, where people are predominantly concerned with the experience as much as the product, don’t you as the landlord want to surprise and delight customers. If you have the luxury of owning multiple spaces, curate it and balance the tenant mix. If you take a long-term tenant in one, can you afford to have a loss leader in another in order to keep that long-term tenant happy, to keep people coming back, and to benefit from the other less financially based factors mentioned above. We know these are inherently hard to measure, beyond sentiment and maybe the odd footfall tracker.

I strongly believe that curated spaces are the future. That money still makes the world go round and Landlords, where they are independent and their shop is their pension, only really care about the money in their pocket. But my pitch is to the ones who have the ability to drive change. Consumer habits are changing and pop-ups are a great way to experiment with that, and to support the evolution of the high street. Pop-up shops are a valuable asset to have. And a final plea.  Small businesses don’t grow unless they have the space to do so. So let them. And help them find it. Any pop-up space options, please send them my way!