The standoff between the UK’s businesses and their landlords has reached a boiling point. With the COVID-19 pandemic worsening trading conditions and destroying footfall, businesses have undoubtedly struggled to stay afloat during the crisis – let alone make enough money to comfortably continue paying their outgoings.
With the nation’s commercial landlords attempting to collect some £2.5 billion in rent during June and July 2020, struggling retailers may be asking themselves whether there’s a better way forward. At a time when businesses have been forced to think on their feet to survive, could adopting a more mobile approach to trading be the answer they’re looking for?
How lockdown has affected UK business property
Just as lockdown has affected so many areas of life in the UK, so too has it caused a sea change for the way businesses work. In a post-pandemic world, high street operations are limited by social distancing regulations and customers have been driven online by the promise of secure delivery and minimal personal contact. It is fair to say that footfall has nosedived, with data from Springboard suggesting that May 2020 saw a drop in customers visiting retail premises of over 80%.
Despite a decline in custom and income, businesses have had no reprieve from their obligations. Stockists and suppliers, landlords and local councils have all continued to require payment for their services leaving businesses balancing on a financial knife edge. In response to these unprecedented times, many businesses have had no option but to cease making payments for rent and business rates to ensure that they can continue trading when the lockdown is lifted.
With businesses in financial turmoil and landlords unable to indefinitely pause their own income, it seems the country is heading towards an impasse.
What is a pop-up shop?
With rents and business rates getting close to becoming the ‘straw that breaks the camel’s back’, one solution businesses may look to is temporary retail. Known as flesh retail, pop-up shops or mobile businesses, these are retail spaces that act as a business’ temporary home before they move on to another location.
The benefits of a mobile business model
Reports from the Centre of Economic and Business Research (CEBR) have shown that pop-up retail contributes more than £2 billion to the UK’s economy each year, with a third of British businesses beginning their life in this way. With the format continuing to grow, here are just some of the advantages businesses could cash in on by taking their model mobile:
Cheaper Rents and Business Rates
Pop-up shops come in many shapes and sizes, but because they are often smaller than more permanent retail premises. This works because the businesses occupying pop-up shops often do not need to factor in large spaces for stock storage or operational functions and instead can focus on selling. This can make it much cheaper to opt for a pop-up premises arrangement, as commercial rents are often calculated based on the square foot size of the building.
By their very nature, pop-up shops are temporary and whilst this insecurity can be daunting it also leaves businesses free to chop and change what they do. This is particularly advantageous for new businesses who are testing their products out and don’t necessarily want to commit to a long lease or rental agreement for premises of their own. Similarly, flash retail locations allow businesses to work out the best position for their shop without heavily investing in one area. If your products aren’t selling in one place, you can simply up sticks and try somewhere else.
Pop-up shops generate real excitement amongst the public, who are generally interested to find out more about the new shop that’s suddenly appeared in their area. As temporary retail spaces, pop-up shops are frequently minimally designed and offer a cool, stripped-back look that attracts custom. The fact that your business is only there temporarily can also be of benefit, as customers who might otherwise be less inclined to make spontaneous purchases feel the need to “get it before it’s gone”.
How to set up a pop-up shop
How you approach flash retail will depend on your product and business model, but there are some common themes amongst the considerations needed to set up shop:
Find a location
When your business isn’t tied to one specific location, you can go anywhere. Even so, choosing the right location is an important factor when trying to maximise sales so it’s worth investigating footfall, customer demographics and any local businesses that could compete with you. What builds up one business might be useless for another, but the beauty of pop-up shops is that you can always move if it doesn’t work out.
Keep it slick
When moving into a pop-up shop, businesses will not necessarily want to invest in plumbing in a full cash desk console just to rip it out again in the future. Fortunately, there are alternatives available, such as those offered by UTP. With a complete range of mobile card machines and portable card readers, their payment solutions could help you to complete transactions no matter where you are in the world whilst making it easy for customers to pay you (for more info: www.utpgroup.co.uk).
Your retail operations shouldn’t be any less effective just because you’re using a temporary location. From staffing rotas to returns policies, the usual retail principles still apply even when you’re in a pop-up shop and failing to keep your standards high could spell disaster for your business. This is especially true of your payment solution, as this is the business function that will be facilitating your income.
Follow the data
The watchword of pop-up retail is flexibility, so take advantage of your freedom. Track your KPIs, decide on your goals and if one location or strategy doesn’t seem to be working you can move on. It really is as simple as that and using a flash retail space could help you to find your way in the business world without committing to one spot.