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Interview: Appear Here founder Ross Bailey on the future of pop-ups

Appear Here founder Ross Bailey

The trend for pop-ups is about far more than just creating fashionable, temporary stores to excite jaded consumers. Instead, the issue highlights how modern retailers need to secure space and how landlords need to manage their portfolios, says Ross Bailey, founder and chief executive of Appear Here.

Although Appear Here is responsible for letting large numbers of temporary units from London to Edinburgh, Bailey dislikes the term ‘pop-up’, as he will be explaining in a conference panel session at Retail Design Expo 2015.

“It is just the way you are going to rent space,” especially when start-up retailers are seeking to compete with established players, says Bailey. “People need flexibility, they need to run stores by the week or the month, and they need to be able to get in front of the right audience at the right time in the right street. And we are hopefully going to make that happen.”

The situation that was common in the UK two decades ago – where retailers were forced to sign 25 year leases, sometimes with upwards-only rent reviews included in the contract – are long gone, says Bailey, who adds that most leases now are for less than five years.

“The whole medium for renting space at the moment is changing. There is a huge shift in the industry,” says Bailey. “Vacancy rates are still high… and the types of retailers and brands, and the type of space they want, is changing, as is the use of the store. Where before a store was about sales per square foot, we are finding that a lot of retailers and brands are saying the transaction point is moving from the store to online. Therefore their stores play a different role, which is about attracting audiences and getting in front of people.”

Consumer preferences change so rapidly that long term tenants are no longer a guarantee of a safe long term investment for landlords, argues Bailey. “People are moving on so quickly that landlords have to realise that their real value, especially if they are shopping centre owners, is their audience,” he says. “If they can’t retain that audience, and get the right audience, then ultimately their asset values and their rent levels are going to diminish. They are just understanding that, essentially, they are media owners.”

Emerging retail brands are naturally keen to reach consumers in key locations. But with limited funds, well-established competition and strong online sales, they are using different strategies to the companies that have gone before them.

“What we’ve got is somebody who is maybe paying grade A rent for an amazing location, but they are only going there for a month. And then they are moving on to another location, equally as amazing, and paying for a month, and doing that 12 times. So throughout the year they have had 12 locations rather than one, they have created an amazing experience, got people to know who they are, and then they have a great experience online where people go back to later,” says Bailey.

If these companies do open a successful permanent store in Central London, they are unlikely to want another in an adjacent London borough, says Bailey. Instead they will be attracted by opening stores in Paris or Melbourne.

 

Ross Bailey will be appearing in the Retail Design Expo panel discussion Pop-Ups – fad or fixture in the retail mix?

Other speakers on the panel are Rupert Pick, planning and creative director of Hot Pickle, David Martin, joint managing director of M Worldwide and Andrew Sparrow, head of commercial opportunities at Old Spitalfields Market at Town & Country Markets.

The session will be held on 10th March in Retail Theatre 1 at 3pm. Click here to attend.