Looking at the context of retailing and its development, pop-up retailing has naturally developed under the existing influencing factors, and that can be adopted by retailers to serve or fill in the newly recognized needs of consumers. Retail moved from hawkers, walkers and peddlers to general stores, specialty stores and finally department stores. Retail theories, such as the ‘Life cycle, Wheel of retailing and Retail accordion’ can be characterized with their cyclicality.
Hollander (1966) in the ‘retail accordion’ notes that the way of conducting operations has an altering movement that swings from specialization towards integration or diversification of activities. Hollander explains further that this is due to new tendencies such as ‘scrambled assortments’ that is likely due to the inflexibilities of the retailers. Factors that promote contraction can be noneconomic, dealing with personal preferences of the retailers in ways that they perceive to do business; capacity (capital and/or resources) causes retailers to operate on a limited basis; costs are growing at a faster rate than the revenues, and finally the market’s complex consumer preferences pattern is a foundation of the expansion and contraction of the accordion.
Hollander (1960) comments on the ‘Wheel of retailing’ (by McNair): New types of retailers enter the market at low-status, low-price operators. They start getting hold of more investment and higher operating costs before they finally turn to be mature high-cost, high-price traders more vulnerable to newer retailing types. The reasoning behind this theory is that new retail personalities are mostly established by entrepreneurs that are cost-conscious and aren’t interested in unprofitable frills.
Some authors think that the later theory of the ‘wheel of retailing’ is controversial thus present several explanations to counter argue. The demographic trends change, and will lead to increases in merchandise quality, prices and services. Then there is the ‘imperfect’ competition that entices retailers to place emphasis on additional services to differentiate.
The illusion of a trading-up process is given through the introduction of different merchandise assortments at higher-margins. And finally, management will evolve into enhancements towards creating upward pressures. The authors introduce the notion of the ‘Product Life Cycle’ which consists of four stages starting with the innovation, development, maturity and finally decline.
With pop-up retailing, it is difficult to take a stand with either theories (‘wheel of retailing’ or ‘retail accordion’); since a pop-up can start-up as a low-price and low-cost or a high- price and low- cost. The choice of range offering, line selection and location selection gives the retailers the flexibility to alternate the price ranges. Moreover, the nature of pop-ups allows flexibility in re-energizing the offering whenever it stagnated (or reaches maturity); therefore, the Product Life Cycle keeps cutting at the maturity stage and moving into another innovation stage.
In his book The Romance of Commerce, Selfridge (1923: 9) notes that ‘[…] trade, with its broader, safer road to financial success is coming to its own; the old must give way to the new, and the philosophy of the leaders in the world’s commerce diametrically opposed to all those old unprincipled principles’.
This article was written by Ghalia Boustani.
Interested in pop-up retailing? Read Ephemeral Retailing. Pop-up stores in a postmodern consumption era, by Ghalia Boustani.