Walmart, Popable offer short-term store leases to small businesses

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Dive Brief:

  • As retailers struggle with rent, Walmart has tapped Popable, an online pop-up shop marketplace, to rent space within its retail stores to small businesses[2] on short-term leases, the retailer announced on Monday.
  • On Popable's site, brands seeking to rent space at Walmart locations can connect with the retailer and sign a temporary lease, according to the press release.
  • Brands can sign up for leases ranging from one month to a year, and they also have the option of entering into a longer-term contract. Leasees can negotiate the terms of the agreement with the landlords directly, per the announcement.

Dive Insight:

If rent is an indicator of how well retailers and brands are bouncing back from the various impacts of the COVID-19 pandemic, then recovery remains shaky at best.

A survey from Alignable found that the rent delinquency rate for small retailers was 31% in September[3], a drop from 40% in August. But by late October, that number had climbed again, with Alignable finding that 43% of small retailers couldn't afford to pay their October rent[4] in full. In the announcement, Walmart and Popable cited the pandemic and the subsequent hardship for small businesses as the catalyst behind the collaboration.

The companies said they hope the partnership will enable small businesses and startups to recover and reach new customers during the holiday season. "Supporting small businesses has always been a priority for Walmart. We are proud to work with Popable to offer local brands an opportunity to grow inside our stores," Walmart's Senior Director of Retail Services Darryl Spinks said in a statement. "This is a great example of our focus on offering services unique to the neighborhoods we serve through our store of the community initiative."

But small businesses and emerging DTC brands are not only having difficulty paying their rent, they're also letting go of workers to cut costs. Companies like Allbirds, Glossier and Peloton have had to lay off workers[5] to reorganize their businesses. For direct-to-consumer brands and small businesses experimenting with brick-and-mortar spaces, pop-up shops offer more than just the opportunity to cut costs on physical spaces.

They also provide companies the chance to create showrooms for shoppers to visualize and test products[6] before buying them, as well as have the flexibility to determine just how much physical space they need, especially as the pandemic continues to influence shopping behaviors.

For major retailers like Walmart, the chance to court small businesses and DTC brands is a mutually beneficial arrangement.

While the brands themselves can reach a broad spectrum of shoppers in Walmart's stores, mass merchants like Walmart can also attract a different type of customer[7] into their stores in return.

References

  1. ^ feedback (www.retaildive.com)
  2. ^ rent space within its retail stores to small businesses (www.prnewswire.com)
  3. ^ rent delinquency rate for small retailers was 31% in September (www.retaildive.com)
  4. ^ couldn't afford to pay their October rent (www.retaildive.com)
  5. ^ have had to lay off workers (www.retaildive.com)
  6. ^ create showrooms for shoppers to visualize and test products (www.retaildive.com)
  7. ^ can also attract a different type of customer (www.retaildive.com)