‘They’re spending their money elsewhere’: Brands are more cautious about holiday pop-ups this year
With more customers focused on value and scarcer real estate, brands and retailers are rethinking their holiday pop-up strategies.
Since the pandemic-driven e-commerce boom, pop-ups have been less about testing out new places for brands to sell products and more about creating immersive brand experiences. This holiday season, brands have been less willing to invest in physical activations or have had to make sure their pop-ups especially stand out as many shoppers have been careful with their spending, industry consultants told Modern Retail. However, others said that brands are still moving forward with holiday pop-ups if they feel like they can offer a truly unique experience or do it more cost-effectively, such as by decorating an existing space or hosting smaller, more intimate events.
Brands especially embraced pop-ups in 2022 as they tried to reach more shoppers in person as more people ventured outside after lockdown. For example, major retailers like Saks and Ulta showed off new types of immersive technology in temporary spaces as a way to engage more holiday shoppers. Now, in-person shopping has resurged, but consumer shopping dynamics and brands’ priorities have changed. BofA Securities forecasts a rise in holiday spending this year but says six in 10 will try to offset rising prices by looking for discounts and deals at places like outlet malls and big-box retailers, per CBS News.
Rebekah Kondrat, founder of Rekon Retail — which helps digital brands open physical stores — said she’s seeing less demand for pop-ups from brands than in previous years.
“Because of the softness in consumer spending, brands are less willing to spend money on those physical activations unless there’s a very compelling need for things to be IRL,” Kondrat said. “Their money is better spent on other forms of digital advertising or maybe even out-of-home, catalogs and things like that. I think they’re spending their money elsewhere instead of on physical activations this go around.”
Additionally, retail space has been increasingly hard to find in popular areas as availability hit its lowest point in decades this year. Because of that, Kondrat said, landlords have had less reason to make deals with short-term tenants.
Other pop-up retail practitioners have observed similar trends.
Melissa Gonzalez, principal of Seattle-based architecture and design firm MG2, said she has also noticed fewer brands pursuing pop-ups. For the ones that do, the companies are focused on really getting the best bang for their buck.
“For brands that are targeting holiday pop-ups, it’s just really important — probably even more so than other times of the year — that they’re really understanding the unique value proposition because it is such a competitive time,” Gonzalez said. “The consumer’s mindset is so much more around holiday deals, and there’s already brands that they know and have relationships with, so what are you going to do to entice with something special, something unique?”
As such, many of the companies that are moving forward with activations this year have been centered around providing unique holiday experiences.
Target will host “Target Wonderland” holiday pop-ups in popular locations — not at its stores — in Atlanta, Dallas and New York City in November and December, showcasing holiday gifts with photo ops and activities. In New York, for example, the retailer is holding it at the Chelsea Industrial events venue between Chelsea and Hudson Yards. Customers will be able to scan QR codes at the event to pick the products at their local store. Spirit Halloween began opening Spirit Christmas pop-up stores along the East Coast last month, selling holiday decor, apparel, inflatables, gifts and stocking stuffers, as well as offering meet-and-greets with Santa and a gingerbread village display. Skincare brand Kiehl’s opened a pop-up in New York City for locals and tourists to shop for last-minute gifts, offering holiday cards, limited-edition tote bags, gift wrapping and treats like cookies and hot cocoa.
Aly Tatnall, vp of accounts at CNC Agency, said the experiential marketing firm is still busy with pop-ups around new product launches or in new markets. The firm couldn’t yet share activations they’ve worked on this year, but their projects last year included a walk-in vehicle for Soma Intimates in New York City, a listening party with a capella group Pentatonix for Ashley Furniture and a mobile showroom for apparel and home products brand Quince.
Some have chosen to instead activate in their existing stores with gift wrapping or photo booths instead of pursuing pop-ups in new locations. Those moving forward this year have had to make sure their experiences especially stand out and are more focused on building awareness than generating sales then and there, she said.
“They’re still seeing it as a ripe opportunity to use the last month of the year to be in front of their consumers,” Tatnall said.