Palo Alto Weekly

News - September 24, 2010

Town & Country exploring 'pop-up' stores

New Zealand company joins short-term lease trend to brainstorm new marketing approaches

by Ryan Deto and Georgia Wells

Town & Country Village in Palo Alto is testing out "pop-up" stores as a way to enhance the shopping center. Such short-term leases have traditionally been used for holiday retail but are now being used by companies to test the market or create buzz for a product, industry experts report.

At Town & Country, fine-wool supplier New Zealand Merino has leased a suite for six weeks. The company is using the space for an executive "thinkering" session rather than a store, officials said, with the goal of exploring whether such venues could be used for collaborative marketing around retail clothing lines that use its wool, such as SmartWool and Ibex.

From the businesses' standpoint, a "pop-up" location can increase excitement around a product without the burden of a long-term commitment, according to inc.com, a website that provides business resources for entrepreneurs.

"Pop-up" businesses also increase visibility for the real estate.

"If something is new and interesting, it creates a bit of a buzz. We see it as an opportunity to drive business to the shopping center," said Caroline Morris, vice president for asset management at Ellis Partners, which owns the retail center.

Ellis Partners is willing to support such a concept on a temporary basis because they "thought Merino was an interesting group, with an interesting business plan that hadn't been tried before," Morris said.

The commercial real-estate firm could fill Town & Country without short-term leases, but its top priority is to create the right mix of tenants, even that includes short-term shops, Morris said.

Ellis Partners is currently evaluating short-term concepts for the holiday season, but Morris declined to share specifics.

At Town & Country Village's Suite 16 recently, more than 30 shoeless New Zealand retail CEOs sat on fine-wool shag carpeting; clumps of white fuzz stuck to their fine wool socks. New Zealand Merino hosted the event to bring their partners together for a meeting designed to brainstorm ways to increase marketing collaboration. The ultimate market collaboration would include a "pop-up" retail location that would sell only products made from Merino wool.

Nick Aubrey, Merino business-development manager, said they hosted the creative meeting of the minds in an effort to explore how Merino's business partners can work together to counteract the global recession and jointly increase sales.

"For our partners, the prize is in growing the pie of Merino wool," Aubrey said, "rather than fighting over their slice of the market share."

Merino chose the Town & Country location because of the key influences nearby, such as Stanford University, Facebook, Apple and design firm IDEO, he said.

"This place is supposed to be a really hard, hitting, short-impact area — a place to bring up the buzz on our product," he said.

Though Merino leased the suite for six weeks, only four days served a business purpose. The remaining weeks of the lease were used for constructing an authentic New Zealand experience within the space.

Adjoining Suite 16, Merino lined a space with real sod grass, to be used for barbecues and rugby matches to entertain CEOs who attended the company's summit from Sept. 8-10. Merino brought in chefs to prepare New Zealand cuisine and an iPad-lined wall was set up with videos and photos of the New Zealand countryside.

Suite 16 was filled with Merino wool products, such as carpets, clothing and wool samples that could decorate a future store. Aromatic containers provided scents of a Merino sheep farm in an effort to bring in all the senses, Aubrey said.

In one hopeful advertising effort, Aubrey waited patiently outside the Apple offices in Cupertino for more than an hour, so he could ambush CEO Steve Jobs and offer him a black Merino-wool turtleneck. Jobs graciously denied the turtleneck, Aubrey said.

Baba Shiv, a Stanford business professor, worked with Merino to help create new marketing ideas. He said marketers usually have no contact with the suppliers and know little about where the product comes from or how it is created. Aubrey said a goal of marketing should be to bring the growers to the retailers.

"This is a potential world first in the sense that a supply chain is part of marketing," Shiv said.

Editorial Intern Georgia Wells can be reached at gwells@embarcaderopublishing.com.

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