Sure, you can earn stable, boring returns investing in the stodgy, monolithic giants of corporate America. But you'll have a lot more fun, and potentially make a lot more money, if you move toward the bleeding edge of the market. Every day, new ideas, innovations, and companies emerge that can disrupt or destroy even the most well-entrenched and long-standing businesses. To invest in these upstarts before they take the world by storm, and pull your money out of dinosaur companies (or industries) headed for extinction, you've got to keep pace with the rumblings of change.
Here, we'll seek out new trends shaping the marketplace, and examine how they might change the business world – for better or worse.
Shop today, gone tomorrow
Technically, pop-up stores aren't a new concept. They tend to come and go with the seasons -- Halloween- or Christmas-themed stores that open in vacant mall spaces, only to close a few weeks or months later, or Calendar Club outlets that lose their usefulness once the new year's rung in.
But with the retail world feeling especially vulnerable this holiday season, pop-up stores appear to be hotter than ever. Don't blink, or you might miss these notable examples:
- Vans (owned by VF (NYSE: VFC ) is opening The Vault Shop at Conveyor in Santa Monica.
- Gucci has a pop-up peddling its goods in New York City.
- Wired magazine will reopen its pop-up gadget store in NYC for the fifth year running.
- eBay's (Nasdaq: EBAY ) rumored to be opening an interactive pop-up store in New York. Instead of actual merchandise, it'll reportedly feature Internet kiosks and mobile phone applications for placing bids or orders with online auctioneers.
- Target (NYSE: TGT ) has opened a pop-up in Australia.
- Nau, a temporary New York City pop-up store, peddles eco-friendly wares and brands such as Timberland (NYSE: TBL ) . In keeping with its green theme, the store uses "upcycled" materials like cardboard, pipe fittings, and branches in its design.
- White Stripes frontman Jack White's record label opened a store in London back in October -- for only two days. Now that's fast retailing.
What makes pop hip?
Our lousy economy has yielded an abundance of empty commercial space and low rents, often in prime real estate. Landlords with vacant space on their hands are more willing to be flexible on terms; after all, some money in hand is better than none, right? Savvy retailers look at this glut of ugly, empty space and see a beautiful opportunity.
For now, retail businesses seem primarily interested in exploiting the holiday season. But what's stopping businesses from waging a temporary guerilla attack against rivals any time of the year? Even tiny upstarts could use short-run stores to create buzz and make a name for themselves. Some retailers' pop-up experiments could also allow them to gauge the magnitude of different areas' demand for a permanent store, potentially helping them expand in a smarter manner than they might otherwise.
The prevalence of pop-up stores this holiday season may be a mere anomaly. Then again, it could signal a new drive toward change, innovation, and recreation in retail. Fast fashion retailers like The Top Shop have shown that an urgent sense of change in merchandise does inspire shoppers to buy while they can. Pop-ups exploit the same psychological trigger; if your favorite store might vanish tomorrow, better make those purchases today.
Once you start popping, you can't stop shopping?
It's easy to see why some retailers end up overexpanded, tired out, and saddled with tarnished brands. Look no further than the overexposed Gap (NYSE: GPS ) or the bleary ubiquity of Wal-Mart Stores (NYSE: WMT ) . On the other hand, I've always liked Urban Outfitters (Nasdaq: URBN ) , a company I own, for emphasizing individuality in its various locations. Its stores don't feel like cookie-cutter versions of one another.
Could constant creative change counteract shoppers' current fear of impermanence, and become real recession chic -- or even something more lasting? Who says conformist, impersonal, generic, big-box retail is the way things should be? In capitalism, businesses can last a long time. But the laws of creative destruction mean they won't last forever -- especially if they don't evolve.
The pop-up craze could make it even harder for staid, slow-moving retailers to compete for consumers' attention. And in the near term, that may be a major threat for old-school retailers, all of which are girding up to war over shoppers' dollars in the coming months.
Are pop-up shops a sign of things to come in retail, or just a one-time anomaly reflecting current macroeconomic conditions? Are there other exciting trends you think investors ought to notice? Let us know in the comments boxes below.
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