What segment of the U.S. economy “popped up” around 2009 and has grown into an $8 billion industry with a 16 percent annual growth rate, according to the Alexander Babbage Inc. market research firm? The answer is pop-up businesses, also known as “temporary retail.”
“Temporary” may be the key word in this description, especially in light of an emerging trend. As the economy improves, there are fewer vacant storefronts, where pop-ups typically have been located, so today’s pop-ups are appearing instead in temporary venues or as self-contained units.
A Farmers Market
Whole Foods opened a once-a-month farmers market last spring at the interim-use St. Elizabeths East Gateway Pavilion, the first new development at the former St. Elizabeths Hospital campus in Southeast Washington, D.C., which eventually will be redeveloped as a technology-centered mixed-use campus.
“Whole Foods was considering opening a brick-and-mortar store in Northwest Washington, and we suggested they take a look at St. Elizabeths,” said Catherine Buell, executive director of St. Elizabeths East, explaining that the city owns the pavilion. “They agreed it was a perfect opportunity for them to get to know the community.”
The community, in this case, consists of local residents as well as workers at the nearby U.S. Coast Guard headquarters, which employs 3,700 people, and a small section of the hospital that remains. “Traditionally, this area has been a food and retail desert,” Buell said. “Whole Foods came in and did everything right — signage, pricing, staffing.”
Buell praised Whole Foods’ understanding of its market in terms of being price sensitive and accepting electronic benefit transfer cards (food stamps). Under the license agreement that Whole Foods struck with the District, it doesn’t pay for its pavilion space because it donates all of its proceeds to local charities.
This level of corporate social responsibility makes Whole Foods an ideal pop-up business partner, Buell said, noting that it would’ve been a harder sell for a purely profit-driven operation. “Retailers are interested in who your customer base is, what do your numbers look like, what is your foot traffic like,” she added.
PNC Bank, the nationwide financial conglomerate, certainly understood the numbers when it made the decision to open several self-contained, portable pop-up branches for a few months, one in Atlanta last year and two others in the Chicago area this spring and summer.
PNC Bank opened this 160-square-foot, 20-by-eight-foot portable pop-up branch in Atlanta’s Atlantic Station neighborhood for a few months in 2013 and two more in the Chicago area in 2014. Photo courtesy of PNC Bank
The pop-up branches make sense for PNC because nearly four out of every 10 bank customers now are using alternative channels, including online banking sites, mobile applications and automated teller machines, to complete their basic banking transactions, explained Timothy Stokes, PNC spokesman. “However, when it comes to more major money decisions, customers prefer the face-to-face experience,” he said. “What once was a place where customers stood in line to visit with a teller about making deposits or withdrawals is now a place where customers go to speak with someone about home loans, auto loans, savings and investments.”
With fewer people visiting the bank, it stands to reason that the bank itself could be smaller and still serve its function. PNC’s 160-square-foot Chicago pop-up is much smaller than its typical brick-and-mortar branch, which ranges between 400 and 3,500 square feet. Stokes said that PNC’s pop-up branches cost only a third as much as a traditional branch to build and maintain. In Atlanta, PNC was pleased to discover that the pop-up bank generated new business on par with a traditional branch. “This included new account openings in checking, savings, money markets and credit cards,” Stokes added.
Stokes pointed out that PNC works closely with city officials and business owners to determine where the bank pop-up will be placed. “It creates positive buzz that’s good for PNC and other nearby businesses,” he added.
Art House Movie Theater
The Angelika Film Center’s decision to open a pop-up theater in a warehouse adjacent to Union Market, an open-air food market in Northeast Washington, D.C., was less about test marketing than it was about introducing itself to its audience. “This is not a theater where teenagers hang out with their friends,” said Jen Nolan, marketing manager at Union Market for Edens, which developed Union Market and owns the warehouse. “Angelika shies away from big blockbuster films. They show art house movies — independent films, documentaries, foreign films — that are geared toward a more sophisticated audience.”
The pop-up Angelika Film Center opened with three temporary screening rooms and a concession stand in a warehouse adjacent to Union Market in Washington, D.C. Photo courtesy of Edens
The pop-up theater, which opened in early June, consists of three screening rooms, each of which can accommodate 50 viewers, Nolan said. “This is taking empty space and giving people something to get excited about,” she noted, adding that Angelika plans to open an eight-screen, state-of-the-art theater at Union Market next year.
Nolan said the pop-up has been very well received and that ticket sales have increased every week. “There’s never been a movie theater in this part of the city before,” she said. When the pop-up first opened, Ellen Cotter, chief operating officer of Reading International, the parent company of Angelika, announced: “The vibrancy and creativity of Union Market make it a perfect home for the Angelika pop-up, and we are honored that [this] will be part of the continued reshaping and transforming of this important part of Washington.”