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Case Study: Ikea

Still known best for its stores

Still known best for its stores

A shake up that embraces difference

IKEA, the Sweden-headquartered home retailer, has created loyal customers the world over primarily through its distinctive store offer and well-designed products.

On the face of it, the company plans to stick to its proven formula in the years ahead, although with a few twists. It recently announced plans to invest billions of Euros in growing its store count to 70 over the next seven years, while also working hard at its developing omnichannel offer.

While its 43 existing stores are generally placed in suburban areas, this new roll-out will focus mostly on big city centres across Europe, Asia, North America and Oceania. The first will open in 2022 in the Linkong district of Shanghai, China, and will be a shopping centre with 300 stores and a roof garden, rather than just another ‘standard’ IKEA. Similar projects in Changsha and Xi’an are also expected to follow this new formula, while plans for a first shopping centre in India are also well developed, IKEA having opened its first store in the country in Hyderabad in August 2018.

The overhaul and transformation will also see the retailer upgrade its existing locations with extensions and refurbishments, as well as adding some other new facilities. IKEA’s offer for customers is evolving in part through its plan to “embrace the digitalisation of retail”. The plan here is to use customer data to “be more in touch with and closer to customers than ever before”. To this end, IKEA will be implementing new types of payment option, exploring the use of loyalty programmes and online communities and introducing hands-free shopping.

MD Gerard Groener said at the international property trade show MAPIC recently: “The €5.8bn we are investing across the world will see us embark on new projects, expand into new markets and upgrade our existing portfolio to create next-generation meeting places for a more omnichannel world.”

He added: “There will be no one-size-fits-all format for these IKEA anchored destinations. A mix of city centre, suburban and edge of town locations are all being considered, depending on local demographics.”

Another change in IKEA’s offer that’s aimed at supporting customers is its opening of an ‘advice centre’ shop in central London. This links the real world of in-store with the mobile world of its augmented reality (AR) Place mobile app – all in the name of offering a personalised service for customers’ home projects.

The store on Tottenham Court Road in central London opened in October 2018 and specialises in low-ticket kitchen and wardrobes assemblage, combining a mix of traditional and digitalised customer experience features. Among other roles, its in-store staff are on hand to help and advise shoppers in the use of the retailer’s Place app for visualising products within their home space.

IKEA is now exploring other locations in London for similar outlets as well as opportunities to test and trial different formats in the city centre. It will also be opening a sustainability- and healthy-living-themed store in Greenwich, London in 2019.

All of these initiatives add extra layers to the retailer’s long-standing customer strategy, which makes a virtue of delivering a customer experience that’s memorable and distinctive rather than frictionless.

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