IKEA is exploring new ways to grow in the US as penetration remains a challenge, according to Neil Saunders, Managing Director and Retail Analyst at GlobalData Retail. "Its giant stores are magnets for big purchases, but in a country with generally low population density they're often too far away and too overwhelming for the everyday homeware run," he explains.
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The company is set to open a hybrid store in the Valley of the Sun. At 75,000 sq ft, it is larger than the tiny Plan & Order points but far smaller than the 342,000 sq ft big box in Tempe. The store will carry around 3,000 home furnishings items and 75 small furniture pieces for immediate takeaway, while larger products can be ordered for delivery or collection.
"It will have room sets, a restaurant – meatballs included – and a good catchment in a traditional shopping destination," Saunders notes. The success of the format will depend on aligning with shopping missions different from those of larger stores.
He adds: "IKEA is very customer centric but adapting formats can be tough. Still, given the company's mission is to serve 'the many people', it makes perfect sense to be flexible to expand reach."
This marks a strategic move for the Swedish retailer to make its stores more accessible without abandoning its big-box model.
Source: www.linkedin.com
