Last year, consumers spent $8.3 billion on Halloween items, and 2017 will likely bring in more revenue. According to ServiceChannel, more than 171 million Americans participate by shopping for costumes, candy and decor.
In response to the great demand around the holiday, pop-up shops have become increasingly popular. However, it's not always easy for a temporary retailer to build loyalty, and so these retailers must deliver an exceptional customer experience. In 2017, this means incorporating machine learning and IoT technology in order to create the best possible outcome.
However lucrative, managing perennial pop-ups is complex business from inventory and staffing to logistics.
"To fully exploit the rich opportunity and offer the unique experience consumers want, retailers and professionals need to think ahead and ensure support for brand-uptime, which includes meticulously maintaining pop-ups for consistent and positive image," Hugues Meyrath, chief product officer at ServiceChannel, told FierceRetail. "The complexity is not necessarily in the logistics; it lives in the criticality of ensuring brand uptime (or perception) across potentially hundreds of temporary yet unique, distributed locations.
Pop-ups are not a new concept in retail, but today they get much more respect as a significant opportunity for retailers to engage with customers.
"In fact, a pop-up can be the difference between a make or break for a retailer—whether a result of unexpectedly low sales or vocal, unhappy customers—especially in this volatile retail landscape," Meyrath said.
With all this in mind, retailers need to take into account four things when preparing for a pop-up:
1. What is the experience the retail is looking to create?
2. What location should the retailer use—mall stores, standalone, etc.?
3. What is the goal of the pop-up, and how long will it be alive?
4. How much investment and resources should be allocated, or should it be outsourced to a third party?
From there, Meyrath recommends making a long list of "to-dos," including how to manage all pop-ups in one central location and the technology that will be needed in order to make the operation run smoothly.
The pop-up industry brings in about $10 billion in sales annually, so Meyrath believes the investment in facilities management tools is worth the expense.
He does warn that there are common mishaps that retailers need to avoid.
"The biggest mistake a retailer can make is treating the pop-up as a secondary, less important location," he said. "Due to online shopping, a pop-up may be the only physical interaction a customer has with a brand and when there's a poor brand perception due to customer touch points that fail to meet expectations, the pop-up is not only harming the brand, it puts the company at a significant competitive disadvantage."
As Halloween approaches, Meyrath reinforces the importance of the holiday for retailers. One Halloween pop-up, now in business 31 years, has more than 1,050 stores and uses technology to feed the frenzy by ensuring brand consistency across locations and improving the customer experience each year.
AI, IoT and machine learning are playing an increasing role in these annual shops. As customers are expecting a smooth experience at all times, technology helps identify problems in-store and elsewhere, allowing for the prevention of a business interruption.
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In addition, Meyrath notes that machine learning and AI drive visibility, allowing staff to make smart, data-driven decisions on strategy.
"AI bots can be leveraged to direct shoppers to the pop-up location and communicate the experience before shoppers enter," he said. "Plus, a social media AI bot can target appropriate customers and market directly to them."