Ikea experiments with new formats
Great things are done by a series of small things brought together.
– Vincent Van Gogh
Entering new markets locally, regionally or globally is always daunting and highly risky, no matter the size of your retail business. While gaining consumer and geographical insights provide valuable direction, it’s impossible to predict exactly how your store will be received.
However, Swedish furniture giant, Ikea, is experimenting with a variety of new store formats to not only to continue enhancing their omnichannel brand experience, but to act as risk reducing models to test new markets and opportunities.
One of the new formats has been dubbed ‘pick-up points’ – a smaller store format with online/offline mash up, which has been implemented in local versions in Spain, Greece, Turkey and Finland. The British and Canadian markets are set to follow with pick-up point stores in late 2015.
This unique strategy allows Ikea to expand quickly into potential markets, as well as make customer access to the brand’s products easier. In 2019, Ikea plans to open a full-size store in the Norwegian town of Tromso. Until then, the retailer serves the area with a service and pick-up point. Most of the store layout functions as a warehouse for online orders, while the rest is a sense-stimulating showroom with store-to-Web capabilities.
The pick-up points are much smaller, around one-tenth the size of a traditional Ikea store, and serve as digital hybrids, integrating the online and offline experiences. The pick-up locations enable customers who have shopped online or at an Ikea store to pick up their products closer to where they live – supporting Ikea’s ongoing brand promise of providing everyday furniture for everyone. The pick-up points also provide lower shipping costs and shorter delivery timeframe.
Customers are also able to access Ikea’s commerce site and make online purchases via free instore Wi-Fi or at digital self-service kiosks with access to the online digital planning tools instore. Moreover, they can browse a showroom with home furnishing inspiration areas and products on display to touch and feel, stations to support customers with their planning process and interior designers ready to assist. A selection of smaller products is also available for customers to take home right away.
The smaller-store format represents an innovative solution to reach markets that cannot sustain traditional and expansive Ikea stores. Small-format stores allow Ikea to expand quickly into test markets that have been identified as opportunities for big outlets in the future.
The small, digital, hybrid format allows customers to interact with the Ikea brand in smart and convenient ways. The pick-up point locations reduce delivery times and costs for customers, while inspiring and delivering services.
This truly innovative retail strategy caters to today’s omnichannel shopper seeking seamless access, flexibility and convenience, while also providing Ikea with an opportunity to test alternative models and markets.
Brian Walker is founder and CEO of Retail Doctor Group and can be contacted on (02) 9460 2882 or[email protected]. Vikki Weston, co-author of this column, is part of Retail Doctor Group’s Retail Insights team and can be contacted via email at [email protected]