Fashion brands eyeing coffee pop-up stores

Recently, pop-up stores with the theme of "fashion + coffee" have become a new trend in offline marketing for brands. This article details the current situation, problems behind it, and future prospects of cross-border pop-up stores. I hope it will be helpful to you.

Cross-border pop-up stores are popular again.

Recently, from international luxury brands to light fashion brands, they have all set their sights on the "coffee" element, and pop-up stores with the theme of "fashion + coffee" have become a new trend in brand offline marketing.

In August, American sports brand Vans and coffee shop brand GREEN HOUSE opened the "GREEN VANS Pop-up Coffee Shop" in Guangzhou; and earlier in June, international luxury brand LV (Louis Vuitton) and Chinese coffee brand Manner opened a joint pop-up bookstore in Shanghai. In addition to selling books and coffee, customers who spent over 580 yuan could also receive a canvas bag with the LV logo, which became a hot topic on social platforms.

Some analysts believe that the popularity of pop-up stores is caused by the downgrade of consumption of some consumers. Some entrepreneurs also believe that in the absence of price cuts for clothing brands and coffee products, pop-up stores have actually created co-branded products with higher unit prices. This is not a downgrade of consumption, but a reflection of the consumption form entering a new cycle.

As pop-up stores become more and more popular, the creativity of major brands is also getting more and more exciting. Are pop-up stores the "antidote" or "shackles" of light fashion?

1. Coffee and fashion collide in pop-up stores

The cross-border collaboration between fashion and coffee has become a hot trend in recent years.

Last year, Li Ning's opening of coffee shops attracted a lot of public attention. Earlier, Ralph Lauren also had dedicated coffee areas in some of its stores. Recently, the combination of coffee and fashion has been extended to the pop-up store model.

In June this year, the LV canvas bag that can be owned for 580 yuan became popular. This product came from three pop-up stores with the theme of books and coffee jointly opened by LV and Manner in Shanghai. It is reported that in the joint pop-up store, the minimum price of a book is 290 yuan, and a LV canvas bag can be given for spending 580 yuan or more. The same canvas bag was once sold for thousands of yuan by scalpers online.

Not only luxury brands, but also some light fashion and fast fashion brands have started to play pop-up stores.

Converse has built four different themed pop-up stores in Chengdu Taikoo Li since June this year. During the opening of the "Whimsical" themed pop-up store, Converse's iconic star and arrow logo was transformed into a cloud shape, and the store launched a "Floating Cloud" special drink and a "Whimsical" photo-taking space to maximize the social attributes of the entire store.

Earlier in January, in order to promote its New Year series of products, Li Ning opened "Make a Fortune Every Day" themed pop-up stores in business districts in Shanghai, Xi'an, Guangzhou, and other cities. The stores not only displayed Li Ning clothing, which was mainly red, but also launched New Year-themed tea drinks.

The Japanese fashion brand HUMAN MADE made its debut in China, opening pop-up stores in Shanghai and Shenzhen at the same time, and teamed up with Luxemporium to bring selected styles of HUMAN MADE SEASON 25 (Spring and Summer 2023), including classic jackets, classic sweaters, shirts, T-shirts, pants, socks, hats and other apparel products, as well as selected household items such as pillows, teacups, and coasters.

Italian fashion brand DIESEL also opened a limited-time pop-up store for its 2023 spring and summer collection in Suzhou this spring. The store, with the theme of "Making Waves", not only displays classic clothing and bags, but also red-themed cupcakes and other pastries.

Xiaoyu, a pop-up store operator, told Value Planet that in second-tier cities, many brand pop-up stores are actually joint promotions by private owners. They are not very outstanding in terms of creativity, positioning, and the design of peripheral products, and there is still a lot of room for development in the future. Compared with the sinking market, such pop-up joint activities in first-tier cities are more mature, still mainly luxury goods, and the addition of light luxury and light fashion is also a trend in the past two years.

2. The embarrassment of light fashion

The concept of brand pop-up stores can be traced back to the 1970s.

In 1976, British clothing brand Paul Smith rented a hotel during Paris Fashion Week and displayed six tops, two jackets and some accessories in the hotel, creating the original model of pop-up stores.

After entering the 21st century, pop-up stores have been constantly upgraded. Russ Mille, founder of marketing company Vacant, once helped the brand Dr. Martens sell limited edition shoes in New York. When the products were sold out, the store closed down, which gave it an authentic "pop-up" feel.

Later in 2004, Japanese avant-garde designer Rei Kawakubo and her husband Adrian Joffe, who was in charge of the brand's commercial development, renovated an old bookstore in Berlin. Japanese clothing brand CDG opened a one-year pop-up store there, which directly increased the brand's sales by 30% that year.

In recent years, many luxury brands such as Bulgari, BV, LV, Dior, etc. have joined the ranks of opening creative pop-up stores. This year, the trend of pop-up stores has also swept into the light fashion circle.

The reason why Light Fashion joined the flash sale model is probably closely related to its unsatisfactory sales.

Xiao Xiao, a fashion industry observer, told Value Planet: "Whether it is a high-end luxury brand or a cost-effective mass brand, its ability to resist cycles and risks is very strong. On the contrary, clothing defined by keywords such as designer, creativity, and light luxury will have a difficult time in the next two years. As some consumers downgrade their consumption, these brands will be the first to be replaced from the shopping list."

Yang Ran, a light fashion consumer, agrees with this view. "Before, I always thought that spending more than 2,000 yuan to buy a designer brand would not collide with big brands, but also show my personality. I am an advertising designer, which is more in line with my 'personality'. But in the post-epidemic era, I think it is more reasonable to spend a little more money to buy big brands or save a few hundred yuan to buy clothes for daily wear."

Similar consumer psychology has put light fashion brands in an awkward position.

HM is the most typical example.

In June this year, H&M's flagship store in Beijing's Sanlitun Taikoo Li officially ceased operations. Closing stores in China has become a normal practice for H&M in recent years.

On June 24, 2022, H&M's first store in the Chinese market, the Shanghai Huaihai Middle Road flagship store, officially closed; in March this year, some netizens discovered that H&M's Hangzhou West Lake Yintai store had ceased operations. In addition, in cities such as Qingdao, Zhuhai, and Chongqing, some netizens said that H&M was gradually closing stores.

HM's financial report shows that the number of HM stores in China began to shrink since 2019. From 2019 to 2021, the number of HM stores in China was 520, 505 and 445 respectively. The number of stores has declined year-on-year for three consecutive years, and the decline rate has continued to expand, from 2% in 2019 to 12% in 2021.

Data source: HM financial report

Li Ning, which has actively invested in coffee and pop-up stores, has not seen good financial results. In 2021, after briefly stripping off the impact of the epidemic, Li Ning rebounded and achieved revenue of 22.57 billion yuan that year, a year-on-year increase of 56%. However, in 2022, its growth rate slowed significantly to 14%, the slowest growth rate in the past four years except for the year when the epidemic broke out.

Data source: Li Ning financial report

Under the dual pressure of market and finance, some light fashion brands have turned their marketing highlights to pop-up stores.

Liang Yiru, a public relations manager of a fashion brand in Shanghai, told Value Planet that because the pop-up store cycle is short, the labor and rental costs are lower. As long as the creativity is sufficient, the social communication effect and sales conversion it brings are very impressive. It is a good way to use creativity to leverage sales. On the other hand, these ideas will continue to empower consumers' impressions of the brand, allowing the brand to get rid of the labels of "fast season" and "low brand value", and promote some consumers to become long-term buyers. Today, the entire market is relatively cautious about advertising and marketing, so pop-up stores are a popular marketing method that can quickly give feedback and bring ROI.

3. Can pop-up stores “save” light fashion?

Low customer acquisition cost, wide coverage, short cycle, and flexible operation are the reasons why pop-up stores have become a new trend in fashion marketing. But why do many pop-up stores choose to combine with coffee and cultural and creative peripherals?

Xiaoyu, the operator of the pop-up store, believes that coffee is more social than tea and feels more "advanced" than milk tea. Coffee itself can also have many thematic creative ideas in taste and packaging, making it a good tool for "communicating" with consumers.

He gave an example: "Many consumers are just passing by or joining in the fun. They may not buy clothes that cost a few thousand yuan, but they are willing to buy a cup of creative coffee that costs tens of yuan, take photos, and post on WeChat Moments. These displayed clothes do not require additional costs, but the venue and planning of the event do. On the one hand, coffee can generate income, and on the other hand, the posts on WeChat Moments can promote the brand, so coffee is very suitable."

As for cultural and creative peripherals, they are similar to coffee in that they have low unit prices, strong social attributes, and are easy to combine with brands to create creative ideas, so both of them have become products that pop-up stores are willing to choose.

So, can the sluggish light fashion industry be revitalized by pop-up stores? Xiaoyu, a pop-up store operator, believes that this depends on whether the pop-up store is creative, whether it can achieve product sales or consumer conversion, and whether it can empower brand value.

First of all, it depends on creativity. Renting a venue, hiring a few temporary workers, printing a few creative peripherals and selling them is a low-cost method, but it is also highly replicable. As more and more brands adopt the marketing form of pop-up stores, the ability to produce eye-catching creativity is becoming more and more important.

Previously, luxury pop-up stores often focused on the design, such as making a certain bag into a giant bag for display, or expanding the logo to the size of a three-dimensional store. However, Xiaoyu believes that light fashion pop-up stores should focus more on the content, such as combining classic film and television IP with the brand's own tone to create a more profound theme.

In addition to creativity, the ability of pop-up stores to convert actual sales should also be evaluated . No matter how many marketing tricks are used, they ultimately serve brand conversion. No matter how lively the activities are, they are meaningless if they cannot effectively promote the brand. Light fashion does not have as strong cash flow as luxury goods. For them, pop-up store activities are not only about "making noise" but also "making sales." How to use co-branded pop-up stores to create popular items, and even in the long run, to deliver more effective customers to the brand on a daily basis, are issues that light fashion pop-up stores must consider.

In addition, it also depends on whether the planning can empower the brand itself.

Pop-up stores are the most convenient way to update brand positioning. Xiaoyu believes that we should not choose some eye-catching but unpopular strategies to attract traffic. We should really emphasize and update the brand concept in the pop-up store, so that consumers can see the new vitality of the brand. This is the direction in which pop-up stores should "roll".

After attracting a wave of consumers to check in and gaining popularity on social media, whether pop-up stores can truly lead light fashion brands out of their predicament and achieve a two-way increase in brand value and sales is an important test of brand strategy and marketing capabilities.

Author: Salad Sauce, Editor: Machi

Source: Public Account: Value Planet (ID: ValuePlanet), discovering company value and telling capital stories.