A lot goes into starting and running your own retail store. Going all-in on a location, estimating expenses like utilities, decorating the space… it’s a big commitment. And with rent prices rising in many cities around the globe, it’s a costly commitment, too.
That’s part of the reason so many small businesses are turning to other options, like food trucks and temporary pop-up shops—both of which have grown in popularity in the last several years. They’re particularly popular with ecommerce brands looking to dip their toes into physical retail without committing to a long-term lease.
But instead of hosting your pop-up shop in a vacant mall, consider joining forces with an established brick and mortar retailer. This shop-in-shop retail concept is a win-win for both the visiting brand and the host. Here’s how to do it.
Table of Contents
What is a shop-in-shop?
A shop-in-shop happens when a retailer partners with another brand to sell products within its store. Think of it like a pop-in shop hosted within a store at another location.
Also known as a pop-in shop, you take a small section within an established grocery store, supermarket, or boutique. The host opens up a small part of their floor plan in exchange for rent or a percentage of sales.
How is a shop-in-shop different from a pop-up?
If that sounds really similar to a pop-up shop, that’s because it is. The chief difference is that your store exists within another store. It’s a small distinction, but it can make a big difference for your brand.
The advantages of shop-in-shops over pop-ups are twofold. First, opening your store inside an established retail location means you have a built-in marketing partner. You both benefit from driving foot traffic and getting customers to come in and stay awhile.
Selling from an existing store also means you aren’t responsible for furnishing an entire space. Working with another retailer (instead of a landlord) typically offers more flexibility when it comes to leasing terms and a lower rental cost. Your pop-in can open seasonally, or for brief periods to promote sales or new launches.
Without the high cost of short-term rent, utilities, and other expenses, it’s affordable to keep the shop-in-shop open for a longer period of time.
The benefits of shop-in-shops
- Reach a new audience
- Brick-and-mortar customer engagement
- Capitalize on existing foot traffic
- Experiment with in-person selling
- Diversify your reach
- Take advantage of seasonality
- Test experiential retail
There are many benefits you can enjoy with a shop-in-shop model–let's take a look at some of them more closely.
Reach a new audience
Opening your store inside another retailer immediately provides your business with a targeted, engaged new audience. By choosing your host wisely (more on that later), you can ensure your pop-in store’s built-in audience expands your reach and leads to meaningful new customer relationships.
Having a physical location offers you credibility in the actual world. A pop-in shop also generates buzz and awareness by exposing you to people who may not be familiar with your business.
Brick-and-mortar customer engagement
With free and fast shopping becoming the norm, the demands of in-person shoppers boil down to one word: convenience. Use your shop-in-shop as a way for customers to pick up products in person, especially if you’re a primarily online retailer doing most of your sales through ecommerce.
Customers who frequent brick-and-mortar retail stores have the opportunity to immerse themselves in your brand more than their digital counterparts. A pop-in doesn’t just give you access to your host’s audience—it serves up the most engaged segment of it.
Sephora, for example, partners with JCPenney to offer buy-online, pick-up-in-store (BOPIS) capabilities across both brands. JCPenney’s chairman and CEO, Marvin Ellison, explains: “We’ve launched the ability for customers to purchase Sephora online and pick up their order at a JCPenney store the same day. This is one example of how we’re delivering on the customer’s expectations for accessibility and convenience.”
💡 PRO TIP: Offering in-store pickup as a delivery method at checkout is a great way to get more online shoppers to visit your store. To get started, enable local pickup availability in Shopify admin to show online shoppers whether a product is available for pickup at one of your stores.
Capitalize on existing foot traffic
While the pandemic temporarily halted in-store foot traffic, traditional brick-and-mortar stores now show signs of growth. According to Adentro, July of 2021 saw 43% month-over-month growth in customer foot traffic to physical stores, a number that consistently stayed above 28% for the remainder of the year.
Whether you open a pop-in inside a large retailer like Nordstrom or a small, local boutique, you have a head start when it comes to foot traffic. When you pop in, that foot traffic is already established, thanks to your host’s marketing efforts.
Experiment with in-person selling
There’s been a lot of talk out there about the fate of retail stores as ecommerce takes over the market. But for many ecommerce brands—even big online brands like Wayfair—brick-and-mortar stores can be a huge benefit for customers.
If you’re running a booming ecommerce business, you might be eyeing a physical retail space as a way to try out multichannel retail. A shop-in-shop can help you test the waters of brick-and-mortar retail before committing to a lengthy business lease.
We were offered the chance to pop-up in other businesses before we launched our brick-and-mortar; that was a great way to bring awareness to our business, and gain customers before opening.
Diversify your reach
With a pop-in shop, you have the flexibility and cost savings to pop into not just one store, but several, throughout your area. Grow and diversify your customer base simultaneously.
Plus, with a shop-in-shop, you can strategically test the waters in each location to see if it makes sense to open a permanent brick-and-mortar location there. Save money and stress by locking into a retail lease you already know will be in the right place.
Take advantage of seasonality
Seasonal businesses face all kinds of challenges that standard retailers don’t. By opening a temporary shop-in-shop, you have the freedom to master seasonal swings and events and leverage them to boost sales.
Have a popular swim line? Add an early summer pop-in shop to your marketing strategy. Is there a big festival happening downtown? Plan a pop-in store for the week.
As you saw, we recently launched with Nordstrom at the Pop-In@Nordstrom running from now until 11/1! We are so grateful to Nordstrom for this opportunity and for including us as well as a solid amount of other Black-owned brands.— ROSEN Skincare (@rosenskincare) August 19, 2020
To our knowledge, the outreach to many of these pic.twitter.com/Fz3z0PSvSh
Test experiential retail
Modern shoppers don’t just visit stores to pick-up products. They choose in-person experiences over online shopping for exactly that: the experience.
Experiential retail is the process of creating memorable store experiences. A commissioned Forrester Consulting study conducted on behalf of Shopify found that more than a third of consumers (35%) plan to engage with brands via experiential moments over the coming year.
A shop-in-shop slots perfectly within an experiential retail strategy. From in-store masterclasses to community events, give people a reason to visit the store and form an attachment with your brand—even if it is just a flying visit.
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How to set up a store within a store
There are essentially two options for setting up a store within a store: hosting a brand in your store or setting up your shop within another shop. Here's the process for each.
Hosting a brand within your store
If you’ve got free space in your brick-and-mortar store, opening it up to a visiting brand is a smart way to drive foot traffic and raise awareness of your own products. Here’s how to do it.
- Put out a call for pop-in retailers. Mention the benefits of hosting a pop-in store within yours, such as exposure to 1,500 weekly shoppers, or space in a busy shopping mall.
- Determine available floor space and locations. Explain how much space you can allocate to a pop-in, and where it will be placed within your store layout.
- Determine the financial partnership. Options include a commission on product sales made within your store, or flat-fee rent—similar to leasing—for each day your partner is taking floorspace.
- Sign a contract specifying these things.
- Promote the event on social media. Remember: the more people visiting the pop-in store to browse your partner’s brand, the greater the exposure of your own products.
Setting up your shop within another shop
Interested in being on the other side of the partnership? Collaborate with another retail company by following this process.
- Choose a retail partner with a customer base that overlaps your own.
- Ask if they’d be interested in this type of retail partnership. Explain the advantages of their leasing space to you, including more foot traffic and exposure of their own products.
- Iron out the specifics. Discuss how much square footage you have to use, and the financial expectations for either party (like whether you’ll pay rent or a percentage of sales).
- Set a date and time. Consider peak shopping times when choosing the period of your shop-in-shop.
- Get your store-in-store set up and ready to serve customers. This includes choosing a POS system and purchasing hardware, which are both essential for serving customers and accepting payments.
- Start promoting the event. Share the news on social media, and ask your host retailer to do the same, to build buzz prior to the pop-in store.
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Shop-in-shop examples and concepts
Bloom Bras is a retailer that sells sports bras for curvy women. It has experimented with pop-in stores for years, with some well-known retail partners including Macy’s, Title Nine, and Universal Standard.
Yet its founder and CEO Elyse Kaye says, “The bigger successes though have come from niche stores which cater to the harder-to-find sizes, since our bras range in size from a 28C to 56L. At one of our popups in Oakland, the store did such an incredible job promoting the event that we had a line down the street and sold out of goods in a few hours.”
Kaye adds that renting another retailer’s floorspace “cuts down on our spend, giving the feeling of exclusivity. We then promote through our community of over 125K, bringing new local customers into the location.”
We had a pop-up where no one showed up because it was raining. We had another pop-up where the retailer had not informed the staff, so we made shift in their parking lot. It was a lot of experimentation to see how to best drive sales.
The Tur-Shirt Company
The Tur-Shirt Company is a retailer that sells children’s clothing. Instead of overwhelming herself with the logistics of planning a pop-up shop, founder Terri-Anne Turton capitalized on the opportunity to appear in John Lewis—one of the UK’s largest high-end department stores.
It was the first time Terri-Anne had sold products in person: “Throughout the week-long event, I gained 50+ new customers and my social media blew up. I also saw a surge in visitors to my website, which correlated to a rise in online orders.
“It’s great when a big name like John Lewis allows your product in their store. It was a real “pinch me” moment as a small business owner that sells primarily online.”
Legacy sleep DTC brand Casper started moving into physical retail back in 2015 with its first pop-up store in Los Angeles. Now, the brand hosts regular pop-in shops within big-box retailers like Nordstrom, Target, and, most recently, Bed Bath & Beyond.
Casper announced its plans to appear in 10 Bed Bath & Beyond stores—including its flagship New York store. Joe Hartsign, vice president of and chief merchandising officer at Bed Bath & Beyond, says, “We're proud that Casper's first shop-in-shop will be inside our flagship store, and look forward to together serving New Yorkers and all omni-channel customers.”
The experience the brand can bring, whether in a shop-in-shop concept in their own store, or in another retail partner, is very important.
5 tips for a successful pop-in store
- Choose the right retailer to partner with
- Find the best location
- Create a sense of urgency and exclusivity
- Make it an experience
- Offer seamless omnichannel experience
Follow these tips to ensure your next pop-in store is a success.
Choose the right retailer to partner with
You can put all of your efforts into building a pop-in shop, creating displays, and making your space stand out. But if your host’s brand isn’t the right fit, you likely won’t see products flying off the shelf.
Choosing the right brand to partner with is the number-one most important factor in creating a pop-in store. A few things to consider when looking at your options:
- Brand fit: Does your host’s branding complement your business? Do your values, and the values of your customers, align? If building environmentally sustainable products is a central part of your brand, for example, look for a host that’s also committed to that goal.
- Audience compatibility: Do the same people buy your products and your host’s? If your customers are all between 20-30 years old, and your host primarily serves the 65+ crowd, it’s not a good fit.
- Audience stretch: One caveat to the tip above is that a mismatched audience can work to your advantage when used strategically to diversify your customer base or test out a new market. If you’re looking to stretch your brand into a new segment, the brand fit piece becomes even more key.
Find the best location
Once you have a list of compatible brands to host you, narrow down your list based on location. The right location for your pop-in store depends on:
- Who your customers are
- Where they live and hang out
- How they get around
You want to make it easy for the right customers to get to you, and you also want to choose a location that will help your audience grow. That means a location with ample foot traffic will produce the best results for your business.
You should also consider locations where the flow of foot traffic varies with the seasons. For example, the boardwalk is bustling in August, but if you sell winter hats, it’s probably not the best location for your pop-in store.
Finally, consider parking and accessibility. If your customers drive everywhere, you’ll need a location with plenty of parking. If they take public transportation, you’ll want a location that’s close to bus and subway stops.
Create a sense of urgency and exclusivity
One of the reasons non-traditional retail setups like pop-in stores are so effective is their ephemerality. They only exist (in a particular location or at all) for a fleeting period of time. Only a certain number of people will be able to shop there, and that lends pop-in shops a sense of exclusivity. They’re a novelty.
To make the most of your limited run, your marketing—particularly on social media—should really emphasize the urgency and exclusivity of your pop-in store. Consider running a temporary sale for those who buy in person (versus online) to add to the exclusivity, and make a point of publicizing how long your pop-in will be open.
Doe Lashes, for example, offers an exclusive line of drinks at its pop-in store.
if you’re in Orange County, I’d love to see you at our first pop-up event!— jason wong (@EggrolI) October 28, 2020
We’re releasing two exclusive specialty drinks for the weekend ☁️ pic.twitter.com/jJZduUq5P6
Make it an experience
As large retailers scramble for a way to give in-store shopping its own unique value proposition, many of them are working to turn brick-and-mortar shopping into an immersive experience. If you’re taking an ecommerce brand into the retail habitat, you have an opportunity to create a completely new experience for customers shopping with you.
Decorate your new pop-in store to the nines and make the space feel like your brand. Just because it’s a temporary investment doesn’t mean you shouldn’t go all in. Host an event that encourages customers to stop and stay awhile.
Offer seamless omnichannel experience
Modern shopping experiences aren’t linear. People consult their mobile phone before, during, and after their store visit. Others specifically look to buy online, pick up in-store options—a reason one third of retail brands are prioritizing omnichannel order fulfillment over the next year.
- Ship items bought in-store to a customer’s home
- Email personalized shopping carts to shoppers who’ve shown an interest in a product within the pop-in, but aren’t ready to purchase
- Provide local pickup for shoppers who’ve ordered products online and plan to collect in-store
Store-within-a-store pitfalls to avoid
No matter which side of the partnership you’re on, hosting a shop-in-shop experience comes with its challenges. Here are the most important pitfalls to be aware of.
Slow checkout and long queues
Do a successful job at building buzz around your pop-in, and there’s a chance that more people will visit than expected. But the more people that visit, the harder it is to manage. A poor customer experience won’t do any favors for your store-in-store, especially at the checkout.
Some 70% of customers said the checkout experience is their biggest pain point. A point-of-sale (POS) system with smart checkout features, such as Shopify POS, offers these features to improve the experience:
- Accept contactless or mobile payments.
- Mobile point of sale (mPOS) terminals, which help store staff serve customers anywhere in-store and eliminate lineups at checkout.
- A fully customizable checkout that helps you perform your most used actions faster–like finding a product, creating a customer profile, or applying a discount.
Choosing the wrong partners
Hosting a pop-in shop is time-consuming. Choose the wrong retail partner, and you’ll waste time hosting an event with minimal returns.
Let’s say you’re a coffee retailer. Your target customers are office workers who spend too much money buying coffee made with a machine they rarely use at home.
In that case, it doesn’t make sense to host a pop-in shop in a gym on the outskirts of town. A local coffee shop would be a more sensible partner. You’ll expose your ground coffee beans to people already in the frame of mind to buy that product, at a location they visit frequently.
Poor layout choices
The layout of any retail store, including a shop-in-shop, requires thought. The easier it is for shoppers to engage with the products on show, the higher your chances of converting them into customers.
When choosing a layout for your pop-in store, consider these best practices:
- Position your stall to the left-hand side of the entrance. Studies show most people navigate a store in a clockwise pattern. Make your stall the first thing they see when entering.
- Be near the window. Capture window shoppers—and convince passersby to interact with your shop-in-shop—by being visible from the street.
- Don’t overwhelm customers with options. Avoid inflicting the paradox of choice—a phenomenon that makes it harder to form a decision if we’re presented with too many options. Use the endless aisle concept to limit in-store inventory without risking losing sales to stockouts.
The first Ulta mini shops have just opened in Target. The fit out is great. Very visible. It’s open, but also feels like a genuine shop-in-shop. It feels a distinct from the rest of the beauty offer. pic.twitter.com/d86EBGYzp6— Neil Saunders (@NeilRetail) August 15, 2021
Is a shop-in-shop concept right for you?
Shop-in-shops—like any other sales channel—aren’t for everyone. Some brands thrive online and stagnate in a physical store. Some products are too large or complicated to lend themselves to a pop-in installation.
But a pop-in can be a powerful tool to reach new customers and grow sales. That’s why it’s worth looking into opening a pop-in store if you’re:
- Considering opening a brick-and-mortar store of your own,
- Trying to break into a new local market, or
- Wanting to tap into an established and engaged segment.
This post was originally written by Kiera Abbamonte and has been updated by Elise Dopson.
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