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Pop Music Invests in Pop-Ups image

Pop Music Invests in Pop-Ups

The music industry has a long history of marking new releases with big events, from listening parties to meet-and-greets. But pop-up shops filled with artist-related merchandise are becoming increasingly popular as experiences (and purchases) move outside the stadium.

Pop-ups aren’t new but they are quickly becoming the go-to strategy for selling exclusive merchandise to concert-going fans. With tours by Bruce Springsteen, Taylor Swift, and K-pop group Black Pink this summer, Universal Music Group (UMG) merchandise sales rose 12% in Q2 ended June 30,  CFO Boyd Muir said. Retail merchandise sales at concerts account for the majority of the category’s revenue but have 15-18% gross margins (compared to the 25% generated by direct-to-consumer eCommerce), Muir said.

The jump in merchandise sales—a mix of items developed by UMG’s Bravado Division and licensees—came as pop-ups increased in size and scope. Black Pink had a 3,000-square-foot pop-up store during their tour stop in Los Angeles in late August and another inside retailer Citadium Haussmann in Paris in July. Singer-songwriter Olivia Rodrigo had a 1,500-square-foot pop-up store in New York themed around her new Guts album that featured exclusive merchandise.

For the most part, these pop-ups are located near or alongside concert venues in temporary spaces to create unique shopping experiences that are partially curated by the music artists. The emphasis is often more on the merchandise and less on the full experience given that many fans are headed to the show after shopping.

However, there can also be an effort to appeal to those solely seeking an experience because they aren’t attending the concert, said Keith Taperell, VP of Global Brand Partnerships and Energy Marketing at Bravado. But whether the fan is attending a show or not, and whether the brand extension is a pop-up store or a longer-term project like the the Rolling Stones store in London that’s currently being used to promote the group’s new Hackney Diamonds album, the ultimate goal is to stay ahead of trends.

“We have seen a rebirth of the touring business post-pandemic and that has helped the merchandise business since fans increasingly want an experience or something to remember the concert by,” said Rob Suchan, Director of Tour Merchandise at Bravado. “Pop-up stores deliver that.”

The merchandise mix at the pop-ups is different than in-venue products, but some trends cross both categories, industry executives said. According to research firm atVenu, K-pop fans (31%) were the mostly likely to buy merchandise among those attending concerts this summer while fans at electronic dance music (EDM) shows (14%) were the least likely. Predictably, t-shirts, hats, and hoodies were the top purchases, although vinyl records scored well with alternative music fans, atVenu reported.

Per-fan spending on merchandise at live shows this summer, overall, actually fell to $8.16 this year from $8.49 in 2022, according to atVenu. But higher ticket prices do not appear to be the culprit. The real cause could simply be because post-pandemic fan demand was so high in 2022. Compared to the average 2019 sales ($5.54 per head), the 2023 numbers are impressive. At multi-day music festivals, merch spending jumped to $66 per head in 2023, up from $58 in 2022.

Industry executives expect continued growth in 2024 and 2025, which could mean more pop-ups. “We think for the next multiple years this industry, in general, is going to have a growth surge on a global basis,” Live Nation CEO Michael Rapino said.

Live Nation Entertainment’s Q2 concert revenue rose 29% to $4.6 billion and total revenue was up 27% to $5.6 billion. “We don’t think this is just any Covid-19 catchup. This is going to be a time on a global basis where there will be growth run for years to come,” Rapino said.

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