Wayfair, the online furniture retailer, is hopping aboard the pop-up wagon.
The company announced last week that it would open two temporary stores in empty shopping mall spaces, one in Massachusetts and one in New Jersey, over the holiday season. But rather than laying the groundwork for permanent physical stores down the line, Wayfair is using the pop-ups to reinforce what it already knows about its online customers, and fill in white spaces.
According to the company, the temporary stores will test how offline customers interact with the brand, fine-tune its merchandising strategy and push traffic back to Wayfair’s online store. Some in-store sales will be an added benefit.
“Physical pop-ups are a natural evolution of our test-and-learn culture,” said Bob Sherwin, head of North America marketing at Wayfair. “[It’s about] how do we make our store experience come to life in a physical setting with a small selection of a broad catalog come to life in the physical setting.”
Through the pop-ups, the retailer can learn about those who browse the shop’s offerings through the digital tools employees use to help customers make product choices. For example, customers who go to the pop-ups can build idea boards with the help of staff members; if they provide their email addresses, the retailer can monitor how intent expressed through the digital planning boards translates to purchases. Online idea sketches are a powerful tool furniture retailers like Lowe’s and Home Depot are also using to grow customer intent and track progress to purchases.
The pop-ups are an offline build on how the company already works with customer data. Wayfair, founded in 2002, has steadily invested in technology to help personalize digital offerings to customers based on what it knows about them. It’s launched product visualization capabilities through its website and app that use augmented reality to help customers see how different products fit together, or to customize the look of a room based on a preferred design style. If customers log in and interact with Wayfair’s site, Wayfair can further personalize suggestions to them, John Kim, Wayfair’s global head of algorithms and analytics, recently told Digiday.
Through mall pop-ups, the retailer is adding a level of tangibility to an online brand, hoping more customers will consider its offerings and in turn, visit its online store. Wayfair will be closely monitoring website traffic in the pop-up locations to measure whether the physical activations are having an impact online, Sherwin said. The U.S. pop-up shops aren’t the first pop-up concept the retailer has rolled out (it hosted a one-day pop-up event in Toronto in April), they are its most involved retail pop-up showrooms.
The pop-ups will also help Wayfair learn more about customer behavior patterns in target regions. Melissa Gonzalez, CEO of experiential agency The Lionesque Group, which develops retail pop-ups for brands, said pop-up activations can give retailers a window into the behavior of a customer set in a particular geography; they can then use this intelligence to influence product development.
“It very much serves the customer to help them jump start the conversation, but on the flip side, it gives the company not only customer data, but over the duration of the pop-up, they’re able to see patterns as well,” she said. “For example, they may learn that 80 percent of those visiting [a pop-up store] are interested in living room furnishings.”
Pop-ups also help e-commerce retailers, particularly in the home goods category, add credibility to positive online reviews.
“People still want to touch and feel things, especially in the home goods category,” said Cognitiv CEO Jeremy Fain. “[Wayfair] has done very well but if you look at how Wayfair and Overstock work, they’re heavily driven by reviews — maybe the couch looks good [in a review] but it’s a big difference to feel it. [Pop-ups] are a good opportunity for them to drive awareness.”
The challenge will be to manage expectations. Joseph Einhorn, the founder of the social-selling marketplace Fancy, recently told Digiday that the investment on “temporary” pop-ups can divert attention away from the customer experience through a focus on maintaining the physical location, including construction, the enabling technology, logistics and staff. Ensuring realistic objectives is key, said Danny Esner, svp of marketing at NuOrder.
“Pop-ups are a great strategy for digital-first brands to test and learn, [but] what’s key for any [pop-up] experiment is being able to create a clear definition of success and measurement,” he said.
Subscribe to the Digiday Retail Briefing: A weekly email with news, analysis and research covering the modernization of retail and e-commerce.