IKEA tests new store formats that free shoppers from the maze of aisles

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IKEA is testing two new store designs that tear up the plan of its iconic maze-like showrooms, as the retailer explores how to keep physical locations relevant in the age of e-commerce.

Ingka Holding BV, which operates the majority of IKEA’s retail stores, this month reopened a location in Shanghai’s Xuhui district that was renovated to test its “future store format,” a space where visitors can possibly spending hours doing something other than shopping. Next to the showrooms and a small items store is a cushioned, theater-like space where IKEA hopes people hang out with friends, a restaurant that showcases sustainable eating practices such as farming and a “Maker’s Hub” where staff help customers repair old and build new objects.

IKEA has redesigned its location in the Xuhui district of Shanghai to test the company’s “future store format”.


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IKEA

The retailer will also open a new compact store in Vienna on Thursday. Located next to the large Westbahnhof station in the Austrian capital, the store will have five floors and a rooftop cafe. There’s no parking, unlike IKEA’s usual sprawling facilities away from city centers. Smaller accessories and furniture can be taken, and larger items can be ordered for home delivery the next day.

In both spaces, customers can use their phones to scan items for purchase while walking around. And they can take any route through the stores they want.

“Basically we wanted to start from scratch and say, how can we imagine a store tomorrow, the store where the customer isn’t going to buy a Billy library anymore? IKEA Deputy Global Retail Director Stefan Vanoverbeke said, referring to one of the chain’s products.

Both store designs were designed before the start of the Covid-19 pandemic. Shanghai was chosen as the location for the future pilot store because many of its customers are already shopping with smartphones, while the opening in Vienna is part of IKEA’s push into city centers. The retailer opened a small accessories and furniture store in rue de Rivoli in Paris in June.

IKEA’s downtown store in Vienna spans five floors and has a rooftop cafe.


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IKEA

IKEA is aware that a growing group of customers prefer to order their items online, or that they have to do so because they don’t own a car to transport heavy furniture flat to their city apartments, Mr. Vanoverbeke. But that leaves him with an existential dilemma to resolve: “So why would you go to IKEA? “

It’s a question facing a number of retailers as the pandemic pushes more customers to shop online and away from the city’s flagship malls and stores. Lego Group and Dick’s Sporting Goods Inc.

have opened stores where commerce is accompanied by activities such as augmented reality games and climbing walls.

IKEA was slow to embrace e-commerce before the pandemic, and its online ordering system frustrated some customers during lockdowns last year. Its new store formats aim to do more than entertain by combining a more sophisticated e-commerce offering and typical showrooms with spaces that invite customers to linger and think more about home furnishings than before.

“I am convinced that if we do our job well, we will make furniture more important to people,” said Vanoverbeke.

IKEA’s traditional one-way showroom system was designed for customers to consider almost any item its stores carry, even if they only came to purchase this Billy bookcase. Rather, the new stores allow customers to pick up or order what they came for, browse if they wish, but also leave without having to browse through other products and parts sets.

Mr Vanoverbeke said inviting spaces like the Shanghai Maker’s Hub and the Vienna Rooftop Restaurant will be alternative and less transactional ways to keep customers in-store.

The arrival of the new formats does not mean the end of out of town showrooms and their signposted trade routes, Vanoverbeke said. IKEA will assess sales figures and collect customer feedback online and in person in new stores to determine which aspects of the new designs are working, which are not, and which need further development.

“Based on this, we will decide which parts we think are ready to be deployed in other stores,” Vanoverbeke said. IKEA is more likely to add some elements of the new formats to existing floor plans than to renovate the carbon copy stores in Shanghai, he added.

Any changes to stores in other markets, including the United States, will be implemented over the next few years, Vanoverbeke said.

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Write to Katie Deighton at [email protected]

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