Stop, Pop, and Profit

A killer trend that gained attention last year will continue its growth momentum as the holidays approach. A host of consumer-facing companies are planning interesting -- and occasionally bizarre -- pop-up shops for the holidays.

Imagine, for example, an entire pop-up shop dedicated solely to Kellogg's (NYSE: K  ) famed toaster pastry, called Pop-Tarts World. This vitamin-fortified outlet recently sprung up in New York City's Times Square to cater to shoppers' toaster-pastry-related needs.

Last year, stores like Target (NYSE: TGT  ) set up pop-up shops -- small, temporary retail experiments. These insta-storefronts are well-suited for the holiday season, when companies seek quick, easy ways to peddle their goods to gift-conscious consumers.

According to USA TODAY, this holiday season's entrants into the pop-up frenzy include Harry & David, which will open "orchards;" Disney (NYSE: DIS  ) , which will open Tron-centric stores to capitalize off the release of the sequel to its 1980s cult classic; and Claire's, which has opened a few pop-ups related to the popular TV show Glee, which airs on News Corp.'s (NYSE: NWS  ) Fox.

The fleeting nature of pop-up shops helps to grab shoppers' attention. A small store that wasn't here yesterday, and it won't be here tomorrow, generates a sense of urgency and excitement. It's also smart to capitalize off of current crazes that probably won't be sustainable over the long term, like the Tron- and Glee-inspired pop-ups aim to do.

Small and nimble stores may be smarter moves in particular markets, such as congested cities. Retail behemoth Wal-Mart (NYSE: WMT  ) has discussed plans to open smaller stores, which is not exactly in keeping with its usual massive, plodding scale.  

Most fascinating of all, many pop-up shops tend to operate profitably for the short amount of time they're open. That's sure to make consumer-facing companies salivate, and worry companies not fast or flexible enough to capitalize on pop-ups of their own.

In these austere times, companies that cater directly to consumers have their work cut out for them. Staid, slow-moving retailers will likely have a hard time generating excitement from reluctant consumers. If these retailers can't somehow pop on the scene with an attention-grabbing bang, the pivotal -- and hyper-competitive -- holiday shopping season might turn out less than cheerful.

Walt Disney and Wal-Mart are Motley Fool Inside Value selections. Walt Disney is a Motley Fool Stock Advisor pick. Kellogg is a Motley Fool Income Investor selection. Try any of our Foolish newsletter services free for 30 days.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.


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