Pop-Up Stores in Mexico. An Innovative Business Model Driving the Use of Islands in Shopping Malls

Ever heard of "pop-up stores"? These short-lived commercial spaces typically stick around for a few weeks or months. Their goal? To showcase products, brands, or experiences in a captivating and distinctive manner. These stores are often located in strategic places like main streets, shopping malls, or unique event venues. The pop-up store concept has gained popularity because it creates excitement, exclusivity, and a sense of urgency among consumers while providing personalized interaction. Additionally, pop-up stores allow brands to experiment with creative designs and innovative marketing strategies.

Although the idea of a temporary store –which involves setting up shops, selling stock and/or meeting specific business goals, and closing down– is not new, its popularity has grown globally over the last three decades, especially in countries like Japan and the United States.

In Mexico, pop-up stores are becoming increasingly common. They are used to launch new products, promote special collections, create brand events, and more. Generally, both nationally and in many parts of the world, these temporary stores are small sized. One of the most common formats is that of islands or kiosks, which are flexible structures within commercial properties, mostly located in shopping centers. However, in Mexico, medium-sized pop-up stores (ranging from 30 to 100 square meters) and occasionally larger ones can also be found, as seen with the clothing company Shein, which has opened such temporary stores in Mexico City, Guadalajara, Guanajuato, Monterrey, Queretaro, and Quintana Roo since 2022.

Islands and Pop-up Stores

Over the past three years, we've witnessed a growing number of pop-up stores in Mexico, including some from well-known international brands like Dom Perignon, Fendi, Lululemon, and Vogue, to name a few examples. With a few exceptions, many of these stores tend to be small-sized islands, ranging from just a few square meters to around 15 to 20 square meters. Island-format pop-up stores are appealing due to their relatively easy installation and disassembly.

According to SiiLA Market Analytics, the gross leasable area (GLA) of islands in shopping malls increased 30% over the past three years in Mexico's main retail markets. This growth was driven by the consistent demand from brands seeking creative ways to engage with consumers and make an impact within a short period while keeping costs down. In this regard, it's important to note that islands offer a versatile and low-risk solution for brands, allowing them to test concepts and strategies without committing to significant long-term investments. This became even more crucial after the pandemic, as many companies became more cautious about their expenses and operations.

SiiLA's data also indicates that the majority (57%) of GLA occupied by islands in shopping malls is dedicated to food services (eatery), personal care, department store items, jewelry and watches, entertainment, and technology.

The trend of pop-up stores and islands in Mexico reflects an evolution in how brands approach retail. The combination of exclusivity, innovative design, and a sense of urgency has proven to be an effective formula for capturing the audience's attention in an increasingly competitive market. As consumer expectations continue to evolve, pop-up stores and islands will likely play a significant role in brands' marketing strategies, offering unique experiences and opportunities for memorable interactions in an ever-changing commercial landscape.

For more information about the commercial real estate market, explore SiiLA REsource or contact us at contacto@siila.com.mx.