Business

Airbnb of pop-ups: London’s Appear Here expands to the US, continues its big international push.

NEW YORK — London’s Appear Here is making a big push to go international, and after establishing a New York office and skeleton team at the top of the year, they’ve now fully opened up shop in the US market. New York becomes their second international outpost after expanding to Paris last year.

It’s frequently pointed out here at Lean Luxe that pop-ups are far less of a novelty play now. Rather, they’re rapidly becoming a standard tool that modern luxury companies (MLCs) use to test out specific markets and neighborhoods before committing to future permanent spaces there. We’ve seen this strategy at play, for example, with Ledbury (DC), and MM.LaFleur (DC and NYC — with Boston and SF on the horizon). Away also seems to be putting this strategy to use, having run several pop-ups in London, LA, and Berlin, ostensibly with the goal of opening up a permanent space in one of these cities soon.

In a call with Lean Luxe, Appear Here CEO Ross Bailey talked about the opportunity in the US market, the promise of LA and New York, the mechanics of launching Appear Here in new cities, and getting landlords to warm up to the idea of making their vacancies more accessible (while trusting Appear Here to handle that process for them).

First, some toplines about Appear Here and the pop-up economy:

  • How big is the pop-up industry? There’s very little research out there on this. But Appear here did release a UK market report in 2014 in conjunction with EE a UK-based telecoms network. The size of the UK pop-up market that year according to that report: £2.1 billion (equivalent to 0.6% of the total UK retail turnover).
  • The basics on Appear Here. It launched in 2013. It’s raised a total of $9.4M over two rounds so far, the last of which was a $7.5M Series A in November 2014 led by London-based Balderton Capital.
  • One key thing we’ve noticed about the company. It’s heavily events driven. They seem to have at least one small event each month, and these events are held in pop-up spaces of brands that use Appear Here. As a pop-up platform, this is a strong way to build the company’s profile, make internal use of its own platform, and offer connection and insight to the communities in each market.
  • The pop-up competition in the US is wide open. London-based Appear Here, and NYC-based Storefront are the biggest names that come to mind in terms of pure-play vacancy platforms. The Lionesque Group is also a competitor in a sense, but their focus is more in building out the guts of a pop-up once a space is secured. Considering the vacant storefronts all across the US — let alone in the big coastal cities — there’s a massive opportunity for both Appear Here and Storefront to convince landlords to start putting these spaces to work, and to choose them as their platform.
  • Appear Here actually looked at buying Storefront last summer after it went into administration. Storefront’s assets were instead bought by Paris-based Oui Open, which decided to unite both operations under the Storefront brand, and install Oui Open co-founder Mohamed Haouache as the new CEO. Bailey claimed that “When we looked at buying Storefront, our numbers were 20x bigger than what theirs were.”

The condensed highlights from our call with CEO Ross Bailey:

Bailey at Appear Here London HQ | Bloomberg

On “going deep” in each city. “What we do is we like to go into a city and we like to go deep. What going deep means to us is building great relationships with our landlord partners [Brookfield Property Partners, and the Simon Property Group]; putting in place a really fantastic logistics team and customer team to help build a brand to launch with us; and to build a community. We’re doing that right now in New York. From there we want to roll out to other cities.”

On the mechanics of launching in a new market. Appear Here relies on local teams that help the company build its local supply (spaces), and tap into community. Bailey told us that they have concierge teams in those cities too — “experts” that help Appear Here customers bring their pop-ups to fruition. These ‘concierges’ have launched stores themselves, have solid retail backgrounds, and are usually locals with real estate and cultural expertise in that particular city.

Said Bailey: “We believe that yes, it’s about building amazing technology, and yes it’s about giving people incredible access. But it’s also about having that human touch. And that’s not by being an agent by any means. The human touch we’ve got isn’t needed — you could use the product without that concierge. But we respect that [a customer is] somebody with an idea that’s incredibly precious to them. This [pop-up] is probably going to be one of the biggest decisions they make; what we want to do is also offer incredible hand holding when they go through that to make sure that each step is pushed as fast as possible.

On the opportunity in the US. As Lean Luxe readers know, the US has been putting out a slew of new brands and retailers dating back to 2008. It makes sense, then, that LA and New York were singled out as two key markets by Bailey. He pointed to LA as a place teeming with robust talent and a booming new retail scene that he would like to see Appear Here plug into.

In New York, the vacancy rates are quite high. So there’s a big opportunity there for Appear Here to in convincing landlords to start opening some of those spaces and giving young retailers and brands access. “When you go to New York today, at the moment there are so many empty shops that it’s actually ruining the city,” he said. “We’ve got to make sure that that doesn’t happen.”

In fact, landlords might be their biggest challenge in the US. “Some of the landlords are still set in their ways, like we find with any city. So it’s about making sure that they are — not necessarily more risk-taking, because we don’t think this is risky — but stepping outside of their traditional comfort zone [in working with us].

In London, because we’re so much more well-established, landlords really trust the [pop-up] concept and trust doing [them] with Appear Here. Whereas in the US, there have been a few different [pop-up platforms] that have…probably not executed that well. So I think a few landlords are potentially put off by that. We’re really working on bringing them up to speed.”

Other markets beyond LA and NYC that they’re eyeing: Portland. Austin. Detroit.

How pop-ups mesh perfectly with the rise of new retail experiences. “In the year I was born — 1992 — the average lease was 20 years. Today it’s less than five years. I think that pop-ups have gone from being this awkward pause, to now being part of the [expansion and retail] strategy. And as retail becomes more and more about the experience, what everyone knows is that experience is about the coolness of discovery, about being able to touch and feel; it’s also about the fear of missing out. All those pieces play very much into what pop-up shops are naturally about.”

And this isn’t just limited to modern luxury brands either. “Even luxury brands — Gucci, Louis Vuitton — these luxury brands are saying, ‘If luxury is about exclusivity and about getting ahold of something [that’s rare], then is it more luxurious to walk onto Bond Street or onto Madison [Ave] and into a marble store with security guards outside? Or is it more ‘luxury’ to have a shop in a part of town that only [the young shopper in their 20s or 30s] knows about that’s suddenly going to be gone before they have time to get there?’ I think that whole idea is changing and shifting.”

(Notice, of course, that the legacy names are just now catching up to the idea of this, which again shows that even though Louis Vuitton et al. may be the household names, it’s really the modern luxury players that are setting the current direction of the modern luxury market.)

One clever idea: “Could we even be launching our own stores? Could we be doing the WeWork for retail? I think that’s also pretty cool to think about.”

Reporting Queue

Previous story

The Bonobos-Walmart saga: Marc Lore is quickly proving to be Walmart’s man of 2017.

Next story

Tyler Brûlé’s retail projections: Bullish on Walmart, bearish on Farfetch.