case study | Jul 24, 2018 |
Weighing the benefits of a pop-up vs. a permanent showroom

Jay Goltz, author and former NYTimes.com small business columnist, founded Jayson Home in 1997 after his early business, a picture framing company, grew into the largest in the country. In his first column in a three-part “Case Studies” series for Business of Home, he delves into the pros and cons of running a pop-up shop.

We’ve had a single brick-and-mortar location, in Chicago, since Jayson Home first opened in 1993. Our online business has grown in the intervening decades, and a large percentage comes from New York. So in 2016, we decided to open our first pop-up store in the Hamptons. We knew that many of our customers vacationed there in the summer and we also knew that it was a great opportunity to expand our customer base—with only a seasonal commitment.

Jay Gotz; courtesy of Melissa Salvatore
Jay Goltz; courtesy of Melissa Salvatore

We gained many new customers, and many of our existing customers were thrilled to find us there. We also sold enough merchandise to actually make money, which got us thinking: If a Hamptons store could make money in just three months, imagine what we could do in SoHo, arguably the epicenter of retail in the U.S.

But bringing our brand to SoHo was a very different adventure than going to the Hamptons. Each location has its own nuances; on one hand, we would get more brand exposure in SoHo, allowing us to pick up some new customers and better service the ones we have. On the other hand is the math. In the Hamptons, you have a three-month shopping frenzy and rent to match. In New York, opening a full-time store is a multimillion-dollar endeavor with a much slower build of awareness. For a public company, or one with the funny money from a venture capitalist, that would be a no-brainer. If it doesn’t go well, no one is going to lose his or her house. But for a privately owned company like ours, it could be “betting the farm.” If I have learned anything about entrepreneurship, it’s that there is a fine line between visionary and delusional. I have been on both sides of that line.

Weighing the benefits of a pop-up vs. a permanent showroomIf I have learned anything about entrepreneurship, it’s that there is a fine line between visionary and delusional. I have been on both sides of that line.

So the question came down to risk and reward, and the ability to finance the risk. We decided that we had to try it out. This was neither visionary nor delusional—in our case, I would call it satisfying our need for adventure. We wanted to try it out, knew it would be good for our brand, and figured that, whatever happened, we would learn a lot along the way. I also knew we could mitigate the risk by doing what I would call an extended pop-up: a two- or three-month presence would not give us enough time to get the word out, and it would be easier to get the startup expenses amortized over nine months. So we went ahead with it, opening our doors in September of 2017 and welcoming in a mix of returning customers, along with many new people who had never heard of us.

I’m happy to say that our staff—including marketing, merchandising, buying, IT, accounting, warehouse, transportation and, of course, sales—got the store up and running quickly and without any serious meltdowns. The opening went well and we received a lot of fanfare from both customers and the press. The one element that we couldn’t plan or project accurately was sales. But that is OK; as a privately owned company without stockholders or investors, we were not worried about it. No one was going to lose their house; no one was going to lose their job. Yes, we respect the math, but we also regularly balance that with the need to continually evolve.

Nine months passed quickly. While sales increased every month, we soon had to decide whether or not having a permanent location in New York was the next move we wanted to make. We now had more information to make an intelligent decision and, given the state of retail traffic and the growth of online business, we ultimately decided it would be better to concentrate our efforts on a brand-new website, launching in early September. This initiative has taken more time and money than most people would expect, including us. People talk about bricks and mortar like it’s this big, crushing overhead expense, but I can tell you that building and maintaining a website is also expensive—and you don’t have to rebuild a store every few years!

While we have switched our focus for the time being, New York was a worthwhile adventure and, overall, a great experience. We picked up a lot of new customers who continue to buy online, and I couldn’t be prouder of how my staff worked together to make it happen. And in the end, that is our way. We try things, we experience things, we learn things—and we relish the fact that we are on an adventure together. And when I say we, I really mean we—both our loyal staff, whose average tenure is over 11 years, and the devoted customers that have been with us for decades. We know that it is our constant need to change and grow that has kept those people with us, so we will only continue to evolve, together. Stay tuned.

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