Manhattan and Paris are now both hosts 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 and build urban 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, and 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, the 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 the cities of 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.
IKEA’s’installe à Paris et ça se voit dans le métro #ad #retail pic.twitter.com/WpokHLiuyd
— Charlie Boillot (@charl1e_B) May 6, 2019
Displays to Wow the Community in Urban Retail
The new store at La Madeleine displays products on two floors. It’s about a quarter of the size of an average IKEA warehouse store. The installation at the nearby subway station serves multiple purposes. It’s a timely marketing strategy to announce the nearby store opening. Additionally, it’s an example of a retail trend that all have not fully embraced. Back in the glory days, consumers would flock to stores and malls. Today, brands and retailers need to find the community – outside of the four walls of their stores. Pop-up stores, shop-in-shop concepts, small-footprint locations – these are all examples of how retail is much more dynamic and fluent, now.
La station #Madeleine pour l’ouverture d’IKEA à Paris. Pas mal non ? 🙂 #StreetMarketing pic.twitter.com/R7hR9yzrB9
— Lisa Stock (@LisaStock_) May 6, 2019
Additionally, the small-footprint furniture stores are part of a much larger strategic push to reach a new audience. This group of shoppers enjoys the convenience of e-commerce shipping with in-person product consultations. 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 the ability to create an in-store experience, it can seem daunting to keep up. Small improvements like food vendors can create family-friendly events. Community pop-up events like in-home designer sessions or wine tastings can turn the store into a destination. Small additions can make 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.