NEW YORK— Ikea has reached a critical point in its business as it has evolved in the U.S., completing an expansion push to 50 big blue box stores across the country and unveiling a new concept, the Planning Studio, in New York as a pioneering vehicle for its next growth phase.
In the future, Ikea will pursue consumers with a multi-concept, online-enable strategy that suits evolving shopping preferences and, by so doing, support the operation as a go-to retail brand, according to Eric Haymond, Ikea strategy and development manager.
“We have seen retail shifting as customers’ expectations shift,” he said. “We have seen more and more customers shopping with us on Ikea.com; with that, people come in-store and it becomes a circular shopping experience.”
The 1,735-square foot Planning Studio is the first of what Ikea calls “touchpoints” that it plans to open in 30 city centers around the globe. Ikea plans to scrutinize reception to the New York Planning Studio as it develops additional city center touchpoints, an Ikea spokesperson said, helping the company configure them to various markets as it moves growth in a more urban direction.
That doesn’t mean that Ikea has dismissed the notion of building more big stores around the world. However, none are currently slated for the U.S., according to the spokesperson.
With an official opening on April 15, a week after the 50th, 331,000-square-foot big blue store debuted in Norfolk, VA, the Planning Studio welcomed shoppers to 999 Third Avenue in Manhattan, just behind Bloomingdale’s, with a curated selection of popular Ikea items merchandised across the space in individual, group and vignette displays. The Planning Studio also has cubicle and office spaces where consumers can work with design staffers to create custom storage and kitchen solutions.
With the Planning Studio, Ikea is moving to engage those core younger consumers who have flocked to the city but also to create an internal capability to change as the marketplace shuffles its stripes.
“We will look at this and other ways to meet our customer in the future,” Haymond pointed out.
The store offers nothing to carry out. All products are delivery, so customers can have small furnishings shipped to home or office for $9.99 and larger furniture pieces transported for $39.99 to start. With its urban initiative, Ikea is focused on understanding the customer’s life at home and making it easier, Haymond said.
“In the cities, we are finding new ways to speak to them with hyper focus on home furnishing solutions that inspire people,” he said.
Fulfillment is out of a 975,000-square-foot distribution center the company has developed in New York’s borough of Staten Island to support the Planning Studio and other New York area Ikea stores.
Still, changes at Ikea aren’t just a matter of this format or that channel. The company has been amending its overall business in the U.S., pursuing new approaches to e-commerce after some wariness of overcommitting its stores-and-catalog operating model to online sales. At the same time, Ikea has adopted more of a service orientation with its deal to incorporate gig employer TaskRabbit into its business, in part to provide furniture assembly.
“Norfolk is our 50th store and helps achieve more accessibility to the many people in the U.S. We will continue to grow, but how we meet the customers may be in different ways,” said Haymond.
The more diverse, omnichannel approach Ikea is taking to the consumer includes a flexible role for the big blue stores, which will, among other things, become a base of support for the extended range of Ikea operations, including store pick-up of goods ordered online or via catalog.
“We are always looking at how we can meet our customer in ways they want to be met. This will manifest in the way we build stores in the future as well as in services we provide, Click & Collect and working with TaskRabbit are great examples of this,” Haymond said.
Late last year, Ikea U.S. president Lars Peterssen announced that the company would be making substantive changes in how it conducts business. In the U.S., change would build off investments to enhance the e-commerce experience and service offerings, including lower shipping and delivery charges, Click & Collect services, financing, and TaskRabbit assembly. At the same time, he said, Ikea has spent money in stores to ensure customers have a “refreshed” family-friendly experience, even as it added five new customer fulfillment and distribution units to position logistics operations closer to consumers across the U.S.
Haymond said, however, that the core company consideration hasn’t really changed at least as Ikea is concerned.
“For Ikea, it is always having relevant solutions in our stores that reflect the market,” he noted.