Chapter 16: Pop-up Analytics and Measurements

Chapter Overview

To achieve pop-up retail success, Haas and Schmidt (2016) suggest six strategic aspects to consider: 1) lifestyle products and luxury goods; 2) Millennials as the target market segment; 3) unexpected and extravagant shopping experience; 4) scarcity marketing tactics; 5) a location that fits the target market and brand; and 6) advanced brand awareness, distinctive brand community, or innovative brand power ¹. These aspects provide a framework to plan and execute a pop-up retail shop and a direction for analyzing its outcomes.

Along with quantitative performance measures (such as store sales and profit) Return-on-Investment (ROI) metrics also link to relationship-building outcomes, as well as other subjective evaluations by retailers and customers. These are called non-objective performance indicators. In the context of omni-channel retailing, pop-up analytics weigh heavily on the ROI of social media impacts as pop-up shops are considered an integral retail channel that complement the bricks-and-mortar, online and other channels.

In Chapter 2, we discussed the five main objectives of pop-up shops: communicational, experiential, transactional, testing and institutional. It is worth noting that metrics for performance measures of pop-up shops with different primary objectives will vary accordingly.

1. Type of Metrics and ROI of Pop-Up Retail Operations

Choosing a set of appropriate performance measures to track for a pop-up operation is not an easy task, but is critical to the retail business’ ongoing success. The metrics used to compare different measures can help retailers in identifying areas of strength so they can devote sustained energy towards maintaining and enhancing the areas in their operations. On the other hand, proper metrics can also help retailers to recognize gaps in performance and steer their attention towards improving business processes to better achieve their goals and objectives. In order to develop and implement effective performance measures, a retailer must have a clear understanding of the broad dimensions of performance metrics.

For retailers, performance metrics include the use of information from objective measures and non-objective measures and performance can be measured at store level or at the organization level if the retailer is operating multiple stores and in multi-channels. For pop-up retail operations, metrics are often developed at the store level.

1.1 Objective Measures and Performance Indicators for Pop-Up Shops

Research shows that choice of performance metrics are often driven by data availability, which results from the more “observable” financial performance measures (such as sales, profits, ROI) being widely adopted³. Thus, these quantitative performance indicators make use of what are called “objective measures”.

Sales in this context refers to the net sales revenue which can be measured by day, by employee, by product and per square foot.

• Sales by day can provide insights into which days a pop-up shop achieves a high volume of sales and this information is important to plan and adjust inventory and personnel needs.
• Sales by employee can be used to measure productivity of sales associates.
• Sales by product is an essential indicator for merchandise planning and inventory management.
• Sales per square foot, as discussed in Chapter 10, refers to net sales divided by the total area (or square feet) of selling space. Sales per square foot is an industry standard calculation of how productively a retailer is using the selling space to generate sales.

Profit includes operating profit and net profit. Operating profit is what remains after all financial obligations related to operating the business are met and net profit before taxes refers to the figure on which the firm pays income tax.⁴

Return on investment (ROI) is a financial analytic tool which measures the output performance benefits gained against the total costs of an initiative or a company, expressed in percentage.

In addition, retailers also use KPIs such as traffic count, conversion rate and basket size to conduct detailed analysis of the effectiveness of retail strategies.

• Traffic count is the total number of customers who come into a store during a given time period.
• Conversion rate (also called traffic conversion rate) refers to the percentage of the number of transactions made divided by the number of customers coming into the store.
• Basket size (also called average transaction rate) measures the average dollar value per transaction during a given time period.

Traffic count, conversion rate and average transaction rate provide details on total traffic, changing traffic patterns throughout a day, how much traffic has converted into a transaction and the size of an average transaction. These KPIs help managers to better plan daily operations, such as staffing and inventory management.

1.2 Non-Objective Performance Indicators of Pop-Up Shops

In addition to objective metrics, retailers also examine other KPIs that are related to relationship-building and customer experience management. These metrics are primarily based on subjective performance assessment by retailers and customers. However, pop-up retailers who excel in non-objective performance measures often enjoy great success in the objective KPIs that we outlined above.

KPIs linked to relationship outcomes include relational touch-points, strategic alignment, surprise and delight and serendipity ⁵.

• Relational touch-points highlight that pop-up shops provide opportunities to reach out to new customers, raise brand awareness and engage with existing customers.
• Strategic alignment emphasizes the importance of a pop-up shop’s alignment with brand, location and context.
• Surprise and delight confirms the strong link between positive emotions and customer engagement with the brand through delightful and multi-sensory pop-up shopping experiences.
• Serendipity refers to chance, happenstance or happy accident ⁴ and is one of the factors that largely contributes to pop-up retail success.

Pop-up retailers who devise effective strategies to control happenstance, location, timing, and serendipity (i.e., seasonality) of a pop-up operation will maximize customers’ perceived serendipity which strengthens their positive relationship with the brand.

Other experience metrics, such as customer satisfaction scores and customer journey/touch-point analysis, are also meaningful measures of pop-up retail performance, especially in building customer experience.

A customer satisfaction score is a holistic measure of a customer’s satisfaction with a retail business. This score can be obtained by customer surveys on multiple satisfaction dimensions, such as product quality, service quality, cost and timeliness⁶. A final global customer satisfaction score is calculated as the sum of all scores on each dimension. Analyzing a customer satisfaction score and its antecedents offers important implications for pop-up retail operators.

Mapping the customer journey can help businesses to better manage and stage the sequence of touch points that customers interact with while the customers are within the retail environment. Customer journey management helps to create “a customer-centered vision of the future and align the promise making and promise keeping efforts of an organization profitably”⁷.  A pop-up retailer can conduct audits of customer journeys through participant observations and customer interviews, using the findings to gain a deeper understanding of the key objective measures and inform the future design of customer experience.

1.3 Social Media ROI in Pop-Up Retail Operations

Social media can and should be an important aspect at all stages of a pop-up shop. A good social media strategy will:

• consider how to reach potential customers and influencers prior to launching the pop-up, which will create awareness and build excitement for opening day
• engage current customers at the pop-up to share their experience in the moment
• continue to build on the connection post-visit

To develop a social media plan, the retailer must determine which platforms their target customers most frequently use and decide what actions they hope to encourage, along with the measures that will be used to track success.

In Canada, the Social Media Lab at Ryerson University reported that 84% of adults had a Facebook account, 42% were on Twitter and 37% had an Instagram account⁸.  Most retailers will have a target customer that is more narrowly defined by a certain age, gender, geographic region or other factors that may be relevant in choosing the social media platforms that those individuals prefer and in measuring their level of engagement compared with the rest of the population. According to Statista in 2017, only 26% of Canadians aged 35–54 were active on Instagram each week, yet 54% of individuals between 18–34 reported using this platform weekly⁹. Understanding these differences is one of the first steps in building a measurable social media plan.

The next step is to define how these social media channels may contribute to the pop-up shop objectives. This may include driving foot traffic to the pop-up or redirecting customers to the retailer’s website, building a new online community hub, getting feedback about products and the store experience, or even making sales directly through social media platforms.

With the above goals and information, the retailer can decide what measures will matter most and the best metrics to track in determining an ROI. Karola Karlson outlines a list of 37 KPIs for digital marketing and notes that, “social media has many advantages that can’t be measured in numbers, you should evaluate your social media ROI according to your goals and advantages”¹⁰.  Whether you seek numbers like actual sales or qualitative feedback from a certain number of customers, having an idea about what each is worth to the business will be key in planning how much time and money to invest in a social media plan and developing targets for an expected return.

2. Analyze Appropriate Measures by Objective for a Pop-up Shop

2.1 Transactional Pop-Up Shops: Understanding Objective Performance Metrics

There are several transaction-oriented metrics that may be relevant to a pop-up that sells products or services on-site. Some of the objective metrics listed above include sales per day, by product, or by employee plus traffic counts, conversion rates and basket sizes. For each of these metrics, there are multiple factors that managers must consider.

Social media metrics related to conversion can also be an important indicator and business driver during a temporary retail activation. James Mulvey suggests that conversion may be measured as “goal completion” in relation to total visits to a retailer’s social media channels, website or even the pop-up itself where a goal may be defined as the customer making a purchase, signing up for an e-newsletter, downloading a mobile app or any number of other measurable and desired customer actions¹¹.  On social media, this could include a special offer code or downloadable coupon which may only be redeemed at the pop-up shop. In-shop redemption of this code may be tracked and measured against total visitors to the pop-up and total visitors to the social media channels to determine its effectiveness in driving traffic or influencing purchase decisions.

2.2 Testing-Focused Pop-Up Shops: Listening to Customer Feedback

Most social media platforms provide easy access to simple metrics such as number of likes, comments, shares or other engagements for each post. However, retailers must look deeper than this to analyze customer sentiment when testing new products or a new retail business through a pop-up shop. The use of relevant hashtags can help with this ability to listen for key messages from customers, as can the creation of “brand fan pages”.

In their work on how to generate different types of social media interactions, De Vries, Gensler and Leeflang (2012) report that posing a question is one of the best ways to encourage comments rather than simple likes.¹³ They found that positive comments led to an increased number of likes and that sharing of both positive and negative comments led to increased number of total comments, which can provide an opportunity for the retailer to learn from feedback and to further engage with customers to address any concerns in a transparent way.

In addition to social media channels, some traditional methods for listening to customers and soliciting feedback may include:

• customer feedback solutions at the point-of-sale
• customer intercept surveys/interviews
• reports from observations by employees
• post-purchase customer surveys by email

Pop-up retailers might also consider how scarcity marketing strategies and limited available inventory at pop-ups may impact customer satisfaction. Developing marketing, communications and operational plans that set clear expectations in the minds of customers with a strategy to help satisfy those who do miss out can go a long way to avoiding unintended negative consequences.

2.3 Communicational and Experiential Pop-Up Shops: Measuring Social Media Impressions

One of the first things a pop-up retailer might ask themselves about their planned shop before launch should be “Is it Insta-worthy?” Dave Colebrook, vice-president of marketing for Cara Foods, explained that this question is something his team considers when creating new menu items in the hope that customers will be compelled to take photos of their own food and share them through social media – encouraging word of mouth marketing at no cost to the company¹⁴. Getting customers to share their experience is step one, but tracking what they are sharing, how many people they are reaching and if the same individuals are sharing repeatedly are all important things to measure from social media.

Apart from the organic nature of creating experiences that customers will share on their own, pop-up shops can further encourage customers to engage with the brand and their personal networks online by offering special discount codes for future e-commerce purchases to individuals who share their experience. Tracking how frequently shoppers use specific words to describe their experience can also help to inform future Search Engine Optimization strategies for the brand.¹⁰

In a study by Klein et al (2016) about luxury retailers, it was found that “pop-up brand stores are an exceptional opportunity for luxury brands to reach existing and new target groups alike” and that these retailers could use the pop-up experience to stimulate positive word of mouth¹⁵.  With this in mind, some important metrics to track may include the number of unique posts that mention your brand through social media during a pop-up activation, shares of brand-generated content related to the pop-up experience and the total reach of each post.

2.4 Institutional Pop-Up Shop: Bringing Different Types of Analytics Together

As discussed in Chapter 2, an institutional pop-up shop also contributes to revitalizing local communities and promoting economic redevelopment of the area, in addition to the business objectives individual pop-up entrepreneurs are working toward. These pop-up shops are often part of a community building project and supported by local shopper loyalty. Thus, an institutional pop-up is not just about transactions, testing a product or concept, or communicating to customers and providing experiences. Oftentimes organized as a pop-up program, multiple institutional pop-up shops have missions beyond business operations. Therefore, in addition to specific metrics measuring business success, such as those objective and non-objective indicators and social media ROIs, civic leaders focus on the social and economic impacts of pop-up retail operations in local communities. Examples of such measures include how vacancy rates of commercial districts in neighbourhoods have been reduced, indicators of local customers’ engagement in local economy and matters (i.e., physical and social media participation of residents on community issues and debates, foot traffic in downtown mainstreets and commercial districts, and in-shopping behaviours of local residents).

3. Pre- and Post-Pop-Up Strategies

Pop-up experiences can vary significantly, depending on the objectives of the operations. However, pre-planning and post-planning strategies of a pop-up shop include fairly consistent elements, regardless of the format and primary objective.

3.1 Pre-Planning Strategies

Pre-planning builds a blueprint of a pop-up shop within financial perimeters and a road map to achieve  the desired outcomes. Pop-up retail operators should have a working model they can use as a template to guide their implementations in a logical sequence. In the pre-planning stage, the following aspects should be included:

1. Initial planning and budgeting: These initial steps help a pop-up entrepreneur to articulate why he/she plans to operate a pop-up shop and the scope of the pop-up shop. To answer the question “why” one has to consider the primary and secondary objectives for the pop-up shop. In Chapter 2, we discussed five objectives for retail pop-ups: communicational, experiential, transactional, testing and institutional. With clear objective(s) in mind, a pop-up entrepreneur can develop an effective concept for the pop-up operation and establish budget expectations based on the concept.
2. Planning the set-ups: Baras (2016) suggests that a pop-up operator should use the following checklist¹⁶.
   1. Location: Where will the pop-up shop be located? In an empty storefront, inside a shopping mall, at a community park, in a market place or in an exhibition hall?
   2. Permits and licences: Find out what permits and licenses are required to operate the pop-up shop. Usually the information can be obtained from the local town hall.
   3. Landlord requirements: What is required in terms of rent, hours of operation, parking, maintenance schedule and insurance?
   4. Hiring staff: Determine the number of staff needed and establish work shifts. Budget payroll expenses including Worker’s Compensation insurance.
   5. Visual merchandising and pop-up space planning: Include all aspects of the pop-up retail environment such as lighting, colour, signage, shelf/fixture, display, traffic flow and crowd control.
3. Planning the operation: Establish the aspects that are directly involved in the pop-up retail operation, such as:
   1. inventory and logistics control, financial planning to ensure cash flow and operational success
   2. store policies with regards to hours of operation, payment methods and loyalty cards/gift cards
   3. staff training on customer service, loss prevention and security

An important aspect to plan is how to promote the pop-up shop. While online and social media promotions are most common, attention should also paid to drawing in passerby into the pop-up shop. This can be achieved by various tactics, such as distinctive signage (i.e., balloons), music and swag items by the entrance.

                 4. Planning the evaluation: Develop a plan for dismantling all displays, fixtures, and signage, putting inventory and swag items away, and cleaning up the space. More importantly, the plan should also set KPIs and determine net profit target, as well as how to measure if the pop-up shop objectives have been met.

3.2 Post-Planning Strategies

In the context of omni-channel retailing, pop-up retail operations are often considered as a channel of merchandise and/or service distribution which is an integral element of the comprehensive retail business strategy. From this perspective, pop-up shops do not just provide a “once in a lifetime” experience for customers, they are part of the customers’ brand experiences before, during and after the pop-up retail operation. Thus, a pop-up entrepreneur needs to establish a clear vision for the pop-up shop beyond the operation itself. Post-planning strategies are part of the long-term vision of a retail business. Especially in the areas of fostering customer loyalty, further developing relationships with new customers acquired through pop-up retail operations, diversifying shopping and brand experiences through pop-up but creating synergy across different channels such as bricks-and-mortar, e-commerce, mobile commerce, and social commerce, and continued product and brand development based on the insights gained through pop-up retail operations.

References

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