IKEA, the worldwide purveyor of ready-to-assemble furniture and other home goods sold in spacious suburban blue-box stores, has developed an omnichannel approach built on smaller stores in urban areas. The new approach places more emphasis on ecommerce rather than the company’s traditional catalog.
One of the first urban stores, which opened this spring, is on the east side of Manhattan across the street from Bloomingdale’s iconic flagship store. The New York store is one of about 30 planned for city centers around the country, based on models already operating in London and Moscow. The London site, open since last October, does not have any merchandise for sale: The space serves as a planning studio where shoppers can make appointments to see merchandise offered online. In using the city-center stores as showrooms for online purchases, IKEA plans to handle much of the fulfillment from its suburban big-box stores.
“Fulfilling orders from stores is the biggest move. We have a footprint of 370 big stores, and one-third of their space is storage,” says CEO Jesper Brodin. “We are looking at converting these spaces to be at the core of our fulfillment so we will be super-close to customers even while we invest in pure logistics centers, too.”
IKEA is a relative latecomer to online retailing, but is jumping in with both feet. “The change of people’s behavior from a convenience perspective has been phenomenal,” Brodin says. “I have traveled to close to 20 markets and seen more than 50 of our stores in the past year, and I always meet the customers. The story is the same. Very often they shop on their way to work in the subway, or after the kids have gone to bed.”
As a result, “We are moving to being accessible beyond our stores. Being accessible 24/7 opens up an enormous opportunity for us. The growth potential is there: As soon as we step into it, the growth takes off.”