Dognation, a newly opened hot dog shop in central Melbourne, also operates a kiosk model with its three metre square shop.
Owner Seong-Lee Ang told SmartCompany he thinks Dognation is the smallest food shop in the city.
“Our leasing agents said they have never heard of anything as small as three square metres for a food shop,” says Ang.
Ang says the small format of Dognation creates interest from consumers with people walking past and taking photos of the store as it is “so unique”.
“The talking point of us being in such a tiny spot has been a really big thing, besides the product itself,” he says.
There are also practical advantages to Dognation’s small size, with Ang saving significant money on the lease.
“Per square metre the rent is not cheap, but obviously because we are only paying for three square metres as an overhead the rent is not that expensive,” says Ang.
“It is a big factor to us to say what is our productivity out of such a small space and there are definite advantages from a cost point of view.”
Ang says he is already in the planning process for more stores and will try to continue the kiosk model.
“I had a leasing guy call me today and he said we have another small kiosk space if you are interested. I think a lot of people are getting the idea that small spaces work well for certain types of businesses and ours is certainly one of them.”
David Gordon, partner in charge of the national retail advisory practice at WHK Group, says kiosks are attractive because they are cheaper.
“The cost of rental is less, the cost of fit-out is less, you need less staff because your security of product has a more physical framework,” says Gordon.
“There is a narrow range of stock sold in a kiosk. It is quite a category-based outlet, so you don’t need a vast range of stock and you don’t need to take the stock risk that a shop would take.
“Often you don’t need to take the long-term rentals that a shop has to take with landlords.”
However, Gordon warns kiosk retailing is not the panacea to all retail problems.
“It has its disadvantages and they are that your physical presence is not as enhanced as a shop would be. You don’t have the range so you essentially let customers down; the customer service isn’t as good.”
New products come and go and now the stores which sell them do the same. Pop-up shops have taken off in the UK and USA and now in Australia as well.
Amy Malin, co-owner of Danish furniture importer Modern Times, has built her business on “one-off concept stores that blur the line between retail store and exhibition” and Modern Times is now onto its third pop-up shop in the Melbourne suburb of Collingwood.
Malin says having a pop-up shop was the ideal way to start Modern Times as a business and was a great way to generate publicity.
“For us, it was a way to see if it was something we wanted to do, because it was a new business for us. It allowed us to test the market, and to create buzz.
“I have a background in events and we felt confident that we could run it like an event and market it like an event,” says Malin.
“There is that sense of urgency because it is temporary; people want to come and have a look straight away. For a regular shop, there is no urgency for consumers or for publicity.
“People like something a little underground and they expect it to be something interesting – and we didn’t disappoint people.”
Malin hasn’t decided whether Modern Times will run a fourth pop-up or look to set up shop permanently.
“Because we sell furniture, it is quite intense to pack up and move. That was confirmation for us that we should do a permanent shop,” says Malin.
“But we could also go and do a pop-up in Sydney or pop-up in New York, and it’s a great way to market our website as well.”
Walker says pop-up shops are perfect for event style retailing and allow retailers to surprise consumers.
“Pop-up shops give you instant accessibility, instant wow factor if done well, and put you in environments that you might not be otherwise,” he says.
“The challenge is that it is not a cheap solution and that is the first thing some retailers do. They put up a cheap fitting and it is uninspired.
“A pop-up shop is an extension of the brand and should be treated that way – so investment of capital is key.”
Cara Waters is the editor of SmartCompany. Cara was previously a senior reporter at the Financial Times website FT Adviser in London and has also worked for The Sunday Times.
