Manhattan and Paris are now both host to a small-footprint Ikea store. The company’s new approach to urban retail makes perfect sense, even though it sounds counterintuitive: Ikea is using stores to drive online sales. Their showroom-like locations in downtowns instead of their typical sub-urban warehouse stores focus on a new customer generation. With Chicago and Washington, D.C. already in the crosshairs for more Ikea showroom stores, independent retailers are asking themselves: How can we keep up in this new age of retail?
Before we answer this question, let’s analyze what Ikea has done so far. A few days ago their latest city center store opened doors in the “La Madeleine” district in Paris. To announce the store opening, Ikea transformed a nearby subway station – with 1,500 products hanging from its walls. It’s a wild assortment of plush animals, chairs, pillows, curtains – and the display is complete with their typical signage and price tags! This is not the first attempt to reach an urban and convenience-driven target audience. Pretty much everyone in the furniture industry has heard about Ikea opening a small-footprint store in New York City. According to the company that new store is a success – apparently it has led to a significant uptick in e-Commerce orders in Manhattan.
Stores as a Way to Drive Online Sales
Ikea’s new approach to urban retail with showroom-like locations instead of their typical sub-urban warehouse stores focuses on urban consumers exploring products in-store, and Ikea delivering the purchases to their homes. In France Ikea plans to spend $400 million to open two more downtown locations in Nice and Lyon. And according to the company the Manhattan showroom won’t be the only small-footprint Ikea store in the US for much longer, with 30 more locations already on the planning board.
— Charlie Boillot (@charl1e_B) May 6, 2019
The new store at La Madeleine displays products on two floors and is about a quarter of the size of an average Ikea warehouse store. The installation at the nearby subway station serves multiple purposes – it’s clearly a well-timed marketing stunt to announce the nearby store opening, and it also exemplifies a trend in retail that has not been fully embraced by all. Back in the glory days consumers would flock to stores and malls, today brands and retailers need to find the community – outside of the 4 walls of their store. Pop-up stores, shop-in-shop concepts, small-footprint locations – these are all examples how retail is much more dynamic and fluent, now.
— Lisa Stock (@LisaStock_) May 6, 2019
The small-footprint furniture stores are part of a much larger strategic push to reach a new audience that enjoys the convenience of e-Commerce with products shipped to their doorstep, yet they still want to experience the product in person, or seek consulting from an associate. This hybrid approach is not limited to furniture and Ikea is by far not the first company to do that – their marketing team simply knows how to get attention with subway installations and the like. In the furniture and bedding industry it was the online brand Casper’s small-footprint experience store in Manhattan that let consumers “test” products before buying them online. A great collection of a wide array of direct-to-consumer retail examples are listed in this Fast Company’s article.
“We’re Not Ikea – What Can We Do?”
With limited funds and manpower, independent retailers sometimes struggle to keep up with the changes in consumer behavior. Without being able to throw hundreds of millions of dollars at in-store experience concepts, it can seem hard to be able to keep up. Small improvements such as the addition of food vendors to turn regular weekends into events for the entire family can go a long way. though. In combination with pop-up events in the community and, depending on the target audience, the addition of in-home designer sessions or a wine tasting combined with interior decor sessions to turn the store into a destination are easy-to-plan events with a big impact.
If a pop-up store or a shop-in-shop using small footprint locations are viable options for your store, send us a note. We’re happy to help you explore options to deliver an “endless aisle” on only a few square feet.