Californian startup Storefront has created a platform which allows those who have unused retail space to rent it out to merchants on a temporary basis or as ‘pop-up’ stores.
These days both independent merchants and major brands are looking for flexibility in the way they reach out to customers and are therefore moving towards novel distribution solutions such as ‘pop-up’ stores. Now players such as Republic Spaces and Storefront are responding to this trend by providing a marketplace for short-term retail space, putting brands and owners of retail spaces in touch with each other. Storefront’s online platform basically offers a solution for companies, major brands, creative suppliers, designers and other independent providers, affording them the opportunity to take space in physical stores without the disadvantages of having to rent space and/or build their own store, with the sizeable investments this involves. Having raised $1.6 million in seed funding last summer, Storefront announced on 14 April that it has now brought on an addition $7.3 million in funding led by venture capital firm Spark Capital. Erik Eliason, the founder of the San Francisco-based startup, explained that the fresh funds would mainly be used to help Storefront expand into new markets, starting with the launch of the platform in Los Angeles this week, in addition to the 2,000 retail spaces it already lists in New York and San Francisco.
Flexible offer of physical sales space
Just as Airbnb offers a marketplace for people to make their homes available for short-term stays, Storefront enables those who have retail space to rent it out to merchants in the short term. The platform is a marketplace for renting out all kinds of retail spaces on a temporary basis, from entire shops which can be used as ‘pop-up’ stores to display space inside a boutique. Merchants can rent space on a daily, weekly or monthly basis, as required. This flexibility allows major brands to create temporary stores in which to present a new product, and enables independent or local traders to test their product marketing in a new place without having to invest in launching a whole shop. The platform not only provides a valuable service in bringing together providers and renters of retail space, but also ensures payment security, offers third-party liability insurance, a marketing and advertising service, training support, plus access to a ‘pop-up’ stores community, expert advice and general customer support.
Showrooming and new product discovery
Since Storefront launched around a year ago, it has brought such influential customers as Google, National Geographic and Kanye West on to its books. The company says that over 1,000 merchants have used the platform to open shops in New York and San Francisco, generating $40 million in sales through those locations. For every dollar spent on rent, merchants are making $7 in retail sales, claims Storefront. In addition to meeting growing demand from retailers looking for more flexible spaces, and responding to the showrooming trend, Storefront also provides a new way for online brands to connect with their customers offline and to build a loyal local client base, given that most sales still take place at physical outlets. Storefront’s solution also gives brands an opportunity to set up in a new region, to test their products on a new target market by creating a promotional pop-up store. Moreover, this kind of short-term retail space may be useful to artists, designers and other creative people as an alternative to displaying their work in art galleries. In addition to serving short-term retail needs, Storefront might also prove to be a valuable intermediary for owners and purchasers of retail space. To develop this side of the business, the Storefront team is developing profile search functionality, which includes for example ‘lookbooks’ showcasing interior designers’ work and prices. This feature should be available from June this year and the startup is also planning to offer additional functionality, including recommendations from different types of retailers for creative services to suit certain kinds of shops.