Fungible goods was something I learned about in economics (that and I can’t hand-draw a graph to save my life). Basically, units of widgets are all the same, and they are all are interchangeable. So each fungible item can be exchanged for one exactly like it, like different copies of the same book. They’re identical.
Fungible goods doesn’t cut it anymore in today’s competitive marketplace. The name of the game today is customization and personalization.
I want something made just for me, and I want to make sure it works. How can online storefronts get consumers to try out their products, without the hassle of returns or frustration in picking the wrong thing? Make it a convenient and novel experience.
Pop-up or temporary store commercial real estate concepts allow an online-only brand or concept try out physical retailing, or to experiment with an omni-channel retail strategy. Consumers get choices, and no waiting time. (Impulse purchases, anyone?)
What does this mean to the average shopper? Instead of 3 red lipstick choices, I have 25 to choose from, and I can’t tell the difference in the shades on my computer. Or there are 17 different leg cuts on a pair of pants, but I can’t figure out which ones will actually work for me, because the ones I bought last season and ripped were discontinued, and I have to start shopping all over again. I can’t buy a fungible good, I can’t replace the item I have with an identical one, because I want something different or the same item doesn’t exist any more. So I head out to the physical store, along with lots of other consumers, to see and try products in real life. Consumers want something novel, current and relevant. Pop-up shops can provide exactly that experience and capture those dollars.
Once I can actually see the shade of red in the tube and compare it in real light, instead of the glow from my computer screen, I’ve got confidence I’m making the right choice, and I’ll be the first to click and order the lipstick of my dreams online, since I know what I’m getting. If I’m not price sensitive, I might even pay a premium to have the lipstick right then- instant gratification.
Pop-ups or other super-short-term leases are usually around 6 months to 1 year, but could be even shorter. The commercial real estate lease form for a pop-up is usually a lot shorter than a traditional one, and provides both parties with greater flexibility to test drive a site, a concept, and to maximize the use of space to fit with community needs.
It might be a short commercial real estate lease, but you still have to read it and know what the rights and obligations are of each party. A short lease is still a binding legal document. As consumers have more options, retailers have to work to grab those eyeballs and those dollars, and that means providing a venue to showcase those goods and curating a novel engaging experience, making retail shopping an occasion or an adventure, not another chore to cram into a busy day.
Online retailers need to become commercial real estate destinations too, in creative and interesting ways that resonate with their audience and the community. That means a commercial real estate lease. While it pays to be creative in retailing, watch out for “creativity” in a short-term or pop-up lease, that could cost a lot more than the tenant bargained for!
This article does not create an attorney-client relationship. This article is for general education purposes only and is not legal advice. You should consult with a qualified attorney before you rely on this information.