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The power of pop-up retail

Oakland’s Popuphood has a model for small business survival in increasingly expensive cities

“Retail is that face of what’s happening in a city,” says Sarah Filley, an Oakland based artist and the founder of popuphood, a Bay Area business incubator with a creative approach to jumpstarting new commercial activity. “That’s how you find out about a city. Store owners are stewards of the sidewalk, they spend 10 hours a day in the neighborhood.”

An experiment in supporting community-based small businesses, popuphood offers a model for cities struggling to help their beleaguered small business sector, battered by increasing rents. By negotiating short-term lease subsidies for local independent businesses, the group hopes to use temporary retail as a tool to permanently revitalize transitional urban areas.

Popuphood started in 2011 in Old Oakland, when Filley and co-founder Alfonso Dominguez worked out a deal to take over a 3,000 square foot empty space that used to be an old bank, facing City Hall. With support from the city’s redevelopment agency, five businesses recieved six months of free rent for a trial run of their businesess. Starting just as the burgeoning art, design, and food scene in Oakland was beginning to attract national attention, the nation’s first retail incubator earned write-ups in local papers and the New York Times, and birthed a program that continues to this day. Successful businesses such as Marion & Rose, which sells American-made goods, and Manifesto Bicycles used popuphood as a launching pad.

“We hit a nerve, not only in terms of the story of Oakland, but in terms of the celebration of small business, celebrating owners as part of the community,” says Filley. “That was the focus in our early marketing, on Oakland winning, and on making the radical choice to invest in the city we lived in.”

Filley, a sculptor and photographer by training, was never educated in urban planning, but believes artists are great assets in the field. Public art requires community work, as well as creative problem solving.

“I call it asymmetrical thinking,” she says. “It’s all about looking at the problem for another angle. My insights are completely different, but they’re not wrong.”

Storefront reclamation and renovation isn’t a new idea, especially in the art world, and pop-up stores and businesses have become commonplace. But popuphood’s model, which seeks to create a more steady pathway from temporary to permanent businesses, offers a runway for entrepreneurship at a time when small business formation is waning; from 1994 to 2015, according to Bureau of Labor statistics, the U.S. unincorporated self-employment rate fell by more than 25 percent.

Filley, who now runes popuphood by herself, has moved the project to an up-and-coming area in nearby Berkeley, since the retail strip in Oakland, catalyzed in part by enterprises like Filley’s, has now become incredibly successful and expensive.

The incubation model fills a gap in the system: not enough programs target small manufacturers, and local chambers and economic development groups often aim to help established businesses. The popuphood model also gives property owners part of that win, giving them successful tenants. Currently, popuphood works with property developers to place aspiring businesses in the lower levels of new buildings, giving three-month to five-year leases to micro entrepreneurs; the arrangement can also help anchor new residential developments.

The model is currently at play in Berkeley is a perfect example. The space at 651 Addison Street recently hosted a pop-up sale with the Numero Group, a Chicago-based reissue label, and just supported the launch of The Black Squirrel, a new yarn and fabric store.

Filley, who also works as a consultant for cities, advocates for changes in city policy to better support pop-up retailers and create visible infrastructure and a policy pipeline for small businesses, including a Popup to Permanent initiative. Both Austin and Portland, which has robust pop-up retailing and food policies, are great examples of liberal policies towards these new, often mobile enterprises.

Established businesses often complain that pop-up retailing and food trucks, which operate without the overhead of brick and mortar retail, have an unfair advantage. Filley cries foul.

“This isn’t a softball league, this is capitalism,” she says. “The city shouldn’t be supporting the established at the risk of hurting those who aren’t established.”

More importantly, she believes, cities should cheer advances or innovations that lead to lower start-up costs for small businesses. Right now, the retailers can take advantage of online retail (some popuphood stores make 75 percent of their profits online), low-cost web hosting, and cheap point-of-sales systems such as Square to get a business off the ground. That’s a lower barrier that should be celebrated, especially in light of the struggles many entrepreneurs face, which are creating gaps in the urban fabric.

“New York City is having a hard time, since new retail and restaurants are facing high costs,” says Filley. “You’re seeing vacancies due to high rent. They’re really losing New York.”