Blurred lines in retail boosts economy by £2.3bn

Pop-up shops, used by online and offline retailers alike to explore the potential of the high street market, are now worth £2.3 billion a year to the UK economy, a new study suggests.

The phenomenon of the short-term shop emerged as stores became vacant during the economic downturn of recent years. Now established as a strategic tool to test the impact of factors from different geographic locations to store concepts and product ranges, pop-up retail is becoming a force to be reckoned with.

A new report from the Centre for Economics and Business Research (CEBR) sponsored by EE, Britain’s Pop-Up Retail Economy report, suggests the pop-up retail sector is now growing at 12.3 per cent a year, hitting £2.3bn in 2015 and employing more than 26,000 people. Last year, the sector turned over 8.4 per cent.

Pop-ups now account for 0.76 per cent of total UK turnover from retail compared to 0.6 per cent at the same time last year. More customers, it seems, are visiting pop-ups, with 44 per cent of those questioned saying they had done so in the last year. At the same time they are spending more, at £124 a month, some £8 up on last year.

In total, the study estimates, Britain is now host to more than 10,000 pop-ups and the lines between pop-ups and traditional retail are increasingly blurred. Eight per cent of retailers report having launched a pop-up sometime in the past year, while ten per cent plan to open one in the next five years.

Ross Bailey, founder and chief executive of pop-up retail space marketplace Appear Here, said, “This report highlights how important the pop-up sector is becoming to the UK economy. With so many traditional retailers using pop-up shops and so many pop-up retailers moving onto long-term rents, we should no longer be looking to draw a line between traditional retail and pop-up retail – it is all just retail. We’re seeing brands and retailers from all backgrounds incorporate pop-up retail into their retail strategy. Since launching in 2013, Appear Here has grown by 500 per cent year on year and currently generates £14m in request value per month, a number which is increasing month on month. This is a testament to the growth of the industry.

Barriers to the trend include the need for a reliable internet connection that underpins technology such as point-of-sale devices, stock management tools and real-time customer promotion using social media channels. More than 40 per cent of small retailers and food and accommodation providers also say they are unable to process card payments.

Rob Harbron, managing economist for CEBR, said: “Pop-up retail is continuing to become an increasingly viable platform for both people with new business ideas and for established businesses looking to engage with customers in new and innovative ways. Successful retailers increasingly need to offer customers the ability to shop when and where they want. As such, the flexibility of pop-up stores makes the format increasingly attractive. However, without appropriate investment in technology, efficiently co-ordinating a range of platforms is becoming increasingly challenging for businesses.”

Mike Tomlinson, director of small business at EE, said: “The sector’s growth is driven by retailers and brands of all sizes using pop-ups to create new experiences, products, and locations for their customers.”