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(Cynthia J. Hoffman is the editor of Real Estate Forum magazine.)

SAN FRANCISCO-When it comes to the future of retail, look for a proliferation of pop-up stores, noted a panel of retail executives at the CB Richard Ellis World Conference here. According to Linda Berman, VP of corporate and brand ventures at Caruso Affiliated, a growing number of brands are using pop-up stores, “as a modality to connect with shoppers.”

As the name implies, pop-up stores spring up quickly, typically in major retail destinations, and have a limited lifespan. The aim is not necessarily to sell goods but to create a buzz about a company or its products, explained Berman, who has worked with several corporations on establishing such locations.

Over the past five or six months, approximately 48 new installations have sprung up across the US, she noted, and while they are mostly being placed in high-traffic, urban areas, “it will inevitably filter down to B and C locations” and secondary markets. Such stores are particularly attractive to companies known for being innovative, such as Target, which has used the concept in the past, as well as those seeking to demonstrate or introduce a new product line.

From an owner’s perspective, there is considerable potential in the rise of pop-up stores. Landlords, “now open themselves up to a vast new audience of tenants. Many of them are not retailers but brands looking for a retail presence,” said Berman, who termed the concept as being “one part theater, one part branding and one part real estate.”

She noted that these tenants are willing to pay a premium for highly visible locations. “Brands are paying in three months the kinds of rent that a landlord would conceivably get in two years.” But the loftier rents are far less expensive than a major advertising campaign. “One of the components of the pop-up store is there is no conventional advertising,” she relayed. “They are under the radar screen to come up on the radar screen in terms of cool.”

But such locations do not work for everyone. Session moderator Michael McDonald, recently named head of retail for CBRE and former Ikea executive, noted that the Swedish retailer attempted the concept many years ago by opening smaller locations with a line of goods focused on a particular area, such as cookware or bedding. It found that its customers were frustrated by the store in that the full range of goods was not being offered.

The subject of brand identity was also addressed by panelists Paul Moulton, EVP of Costco, and Anders Bergland, co-partner of Ikea Seattle. When asked by a member of the audience whether the retailers would consider scaling down their stores in order to go urban, both noted that while they would like to penetrate the inner city markets, their brands were more suited to larger floor plates and single-story locations.

“We have two or three multi-level stores in the US, but they have not been very successful,” stated Moulton, who added that, conversely, the retailer has done well with multi-level stores abroad. Moulton cited a number of factors for tepid performance, including the cost of such locations, the difficulty to move goods and the fact that its shoppers like to see a vast selection of goods.

“At Ikea, we have one size store and it is very difficult to change,”remarked Bergland. Ikea stores draw customers from as far as a 40-minute drive away, and they also demand a wide array of goods.

As for retailers to watch, Berman says keep an eye on established brands introducing new concepts, such as J Crew creating a line for older consumers or Lucky going after the children’s market. “These brands have done well because they know their customer well,” she says. Now, “they are projecting where their customers will be in 10 years.”

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