Pop-up retail is now worth £2.3bn to the UK economy, according to Britain’s Pop-Up Retail Economy, the second annual report into the pop-up sector from Centre for Economics and Business Research.
The report, commissioned by communications giant EE, found that pop-ups now account for 0.76% of total UK retail turnover, up from 0.6% the year before, an increase of more than £200m in sales.
The Cebr report found that the sector is growing much faster than predicted, with 12.3% more revenue this year versus 8.4% last year, caused by a rise in the number of customers and an increased average spend. 44% of respondents have visited a pop-up in the past year, and they’re spending £8 per month more than they previously were at an annual total of £124 per person.
Britain is now host to more than an estimated 10,000 pop-ups, according to the report, and the sector employs more than 26,000 people. The lines between pop-ups and traditional retail are increasingly blurred, as well-established retailers and online-only brands are using pop-ups to test and expand into new locations and product lines. And 8% of retailers report having launched a pop-up sometime in the past year, while 10% plan to open one in the next five years.
However, barriers still remain. Obtaining a reliable internet connection remains one of the biggest challenges, and is crucial for point-of-sale (POS) devices, stock management tools and for real-time customer promotion via social channels like Facebook, Twitter and Instagram.
Additionally, in spite of the fact that card payments are projected to overtake cash within the ten next years, over 40% of small retailers and food and accommodation providers say they are unable to process card payments.
Additionally the report highlights stock management is increasingly a key challenge, particularly as retailers try to manage sales and inventory across online, permanent and temporary shops. 25% of retailers say they have lost money because they don’t have sufficient stock management systems in place.
Mike Tomlinson, director of small business at EE, said: “The pop-up sector is rapidly evolving, with pop-up shops now contributing £2.3 billion to the economy every year.
“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.”
Rob Harbron, managing economist for Cebr, added: “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.”
And Ross Bailey, founder and CEO of Appear Here, added: “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% 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.