NEW YORK (Reuters) - Temporary stores, a money-making staple during the Halloween and Christmas seasons, are going back to school.
A growing number of retailers, including Target Corp (TGT.N), JanSport and Toys R Us Inc TOYS.UL, are popping up this summer in neighborhoods, malls and college campuses across the United States to sell notebooks, clothes, bed sheets and other supplies as students prepare for a new school year.
These pop-ups typically open in empty storefronts and sell smaller selections of popular items. They are a good way for retailers to increase shopping options during busy periods, test locations and promote their brand, retail experts say.
“Merchants today are looking for a way to differentiate themselves,” said Christina Norsig, chief executive officer of Pop-Up Insider, which connects retailers to potential pop-up spaces. “We’re really seeing a change in marketplace.”
The number of pop-up stores in the United States has jumped 16 percent to 2,380 in 2012 from 2,043 in 2009, according to data from industry research firm IBIS World. But pop-ups are still largely untracked, with no data available on their sales or revenue.
Retailers can save up to 80 percent by opening a pop-up instead of a traditional retail store, according to Storefront, a company that also connects pop-ups with real estate.
With a national retail vacancy rate of about 10 percent, landlords are usually willing to let retailers sign a shorter and sometimes cheaper lease, said Storefront Chief Operating Officer Tristan Pollock.
About 2,000 square feet is a popular size for pop-ups, he said, since that allows retailers to be flexible about how much inventory they carry.
Some pop-ups may stock a smaller selection of items, but enable customers to purchase others online, said Kurt Salmon retail strategist Megan Donadio.
Phil Magnuson, principal at SBLM Architects, which designs for retailers, said a well-known retailer’s pop-up had struggled because it did not stock items that customers came in expecting to buy.
But retailers should not water down the theme of the pop-up, Magnuson said.
“It’s important to define what is back-to-school in everyone’s mind, and how much can you stress that?” he said.
Backpack retailer JanSport Apparel has tested the pop-up with a kiosk in the Mall of Georgia near Atlanta, said Rico Pasqualini, vice president of sales.
It worked so well during last year’s back-to-school months that the company decided to keep it open for longer. It soon realized, though, that backpacks did not have as much selling power year-round.
“Outside of back-to-school, we kind of struggled a little bit in leveraging the same kind of volume,” Pasqualini said.
JanSport agreed to let a fellow VF Corp (VFC.N) brand take over during the off months and reappeared in the kiosk last week, he said.
After the kiosk’s lease expires at the end of August, Pasqualini said the company would evaluate next year’s plans.
Target said on Thursday that its pop-up glass dorm room would visit five universities when students head to school in August and September. Shoppers can purchase the bedding and accessories showcased in the room by scanning barcodes on the wall with their phones.
The retailer has plenty of experience when it comes to promoting its brand with pop-ups. It has used them during the holidays, and in May, the company built a life-sized dollhouse in New York’s Grand Central Terminal to promote its new Threshold furniture and home decor collection.
Other retailers use pop-up stores to test locations to see if a store will profit there. Toys R Us opened pop-up Express stores during the holidays, and some of the stores did so well that they have remained open even after the gift-buying season ended.
Toys R Us spokeswoman Alyssa Peera said the privately held retailer has been using the temporary stores since 2009. They have done extremely well, she said, leading Toys R Us to open pop-ups for other shopping seasons, including back-to-school.
Although Toys R Us does not brand any Express stores as back-to-school stores, the pop-ups will carry educational toys, Peera said.
Staples Inc SPLS.O opened a handful of pop-up stores, called Staples Back-to-School Express, during the 2010 back-to-school season, but has not done so since, according to Norsig.
“We have more than 1,500 Staples stores nationwide for customers to shop in during back-to-school season, so pop-up stores aren’t needed,” a company spokeswoman said.
Many other small retailers and large chains are popping up for back-to-school in family-friendly neighborhoods or on college campuses, said Storefront’s Pollock.
That is the strategy for Bed, Bath and Beyond (BBBY.O), which opens pop-up stores selling dorm room essentials near or on college campuses in time for students to go back to school. A company spokeswoman declined to provide specifics.
“The name of the game is about making it easier for the consumer,” said Kurt Salmon analyst Donadio. “By having these pop-ups, it’s easier to make yourself more accessible to the consumer.”
Reporting by Madeline Will; Editing by Jilian Mincer and Lisa Von Ahn