The rise of e-commerce over the past decade has prompted retailers to make changes to what consumers want. E-commerce is growing at an accelerated rate, and its growth rate has surpassed the brick-and-mortar sales channel. Online sales this holiday season in the U.S. account for almost 20 percent of total U.S. sales, according to preliminary estimates.
In addition, department stores use discounts and promotional offers as the main mode of promotion to attract customers to visit their Buy email list physical stores. In the long run, this sales tactic will dilute the store's brand, making it appear like a big-ticket boutique. In addition, consumers will also take this into consideration and only come to shop when there is a discount.
A large number of stores have closed over the past few years, and we expect this to intensify in 2017 and beyond. Department store sales channels continue to shrink, and many brands have to compete for dwindling sales space. We believe that brands must be more creative, flexible and diverse when it comes to selling.
Pop-up stores are one way to break out of the more traditional wholesale model without the rental risk that comes with opening a store. Brands can use pop-up stores to fully control the creative expression of the brand experience and the way brand information is communicated to consumers, and let consumers understand the brand's positioning through customized stories and characters.
In some cases, brands will use pop-up stores as an advertising tool, with merchandising as a secondary concern. This type of pop-up store typically offers a unique store experience to lure consumers into the store. Pop-up stores can also be set up outside the mall to make it easier for brands to reach target customers in that location.
Retailers and brands can also use pop-up stores to test how well expensive shopping locations generate sales. Pop-up stores often offer discounts on rent, and store owners can also use these pop-up stores to show other prospective long-term tenants the available sales space in the store. Mall operators welcome pop-up stores because they can bring freshness and uniqueness to consumers. Real estate firm Related Companies has opened pop-up stores in New York City's Time Warner Center to refresh and diversify its products.