Ikea’s first city centre store in the UK opens today on London’s Tottenham Court Road, but can the Swedish giant succeed on the High Street when many other retailers are failing?
- Ikea opens its first so called ‘Planning Studio’ on Tottenham Court Road today
- It marks a step change for the retailer known for its big out-of-town stores
- Ikea tells This is Money there could be ‘lots’ of small, city centre stores in future
- But why is it opening on high streets when many other firms are retreating?
While for some a trip to Ikea is a joyful, meatball-filled adventure, for others it holds less appeal.
You may be put off by the prospect of a long journey to one of its 18 stores across the UK, or daunted by the time and energy it takes to scour one of the 300,000 sq ft furniture mazes.
But, Ikea has come up with a scaled-down solution that may help win over some of its critics.
Signage in the new Ikea store, which – measuring just 500 sq ft – is a destination for planning
Today, the Swedish chain opens the doors to its brand new city centre shop on London’s Tottenham Court Road – the first of its kind, as the business starts to shake up how it sells furniture to ‘the many people’.
The store, measuring a comparably tiny 500 sq ft, is the firm’s debut ‘Planning Studio’ – and couldn’t be more different from the vast, out-of-town, blue and yellow boxes you’re probably familiar with.
Some of Ikea’s kitchens, laid out in room sets to inspire customer’s planning rooms
Located a stone’s throw from Goodge Street tube station, on London’s self-styled ‘furniture row’, the store targets customers mulling large, complex purchases.
The shop, which specialises in kitchens and bedroom furniture, displays just a tiny portion of Ikea’s range for the purpose of ‘inspiration’.
After booking an appointment online, shoppers – without any pressure to purchase -can sit down with an Ikea consultant to plan, order and pay.
One of several private areas where shoppers can sit with Ikea staff to discuss and plan
But, before you hatch plans to drop by on the commute home tonight to pick up a Billy Bookcase and lug it back on the Northern Line, think again.
The Ikea Planning Studio does exactly what it says on the tin and nothing more, so no products are available to be taken home the same day.
Its function, rather, is to give city dwellers more convenient access to the retailer’s planning and fitting services, while also giving the business greater visibility in city centres.
Speaking to This is Money at a sneak preview of the store, Jane Bisset, Ikea’s new London city centre market leader, said the store is the first of many in the capital, as well as cities all over the world.
Bisset says Ikea is actively looking at ‘lots’ of other locations in London for similar outlets, as well as other, slightly different trial formats.
But, why now?
This year, a cluster of retail firms including M&S, New Look and Mothercare have taken steps to slim down their store estates, retrenching from the UK’s challenged High Streets, so why is Ikea is seemingly doing the opposite?
Well, lots of reasons…
Ikea will host cooking events and demonstrations so shoppers can see the products in action
Like all businesses, Ikea needs to adapt to survive.
It has already invested in a string of new store openings and some much-needed improvements to its online offer, to the detriment of its UK profits last year.
And this first Planning Studio marks the next step in its transformation, aimed at making Ikea more visible.
Bisset says that by being on the High Street, and focusing on city centres, the brand can be ‘top of mind for more consumers’ and therefore better placed to grow.
The signage prompts shoppers to go online where they can continue their planning
Many of the UK’s struggling retailers have too many shops in poor locations and are locked into long leases.
Ikea, however, will only open shops in prime, busy locations with strong public transport links. It will also benefit from the current ‘buyers market’, in which landlords are eager to fill sites that have suddenly become available as the result of a firm going bust.
This first store, for example, was previously home to sofa chain Multiyork, which slumped into administration last year.
Unlike the High Street stalwarts, Ikea will be in a strong position to negotiate good prices and flexible lease terms.
The business is also confident because of its value price proposition, which makes it resilient during a downturn.
And, when it comes to small stores, this isn’t Ikea’s first rodeo. The first type of small store Ikea opened was the so-called ‘Order & Collection Point’ – where shoppers could pick-up online purchases, buy a few take-home items and get some advice.
Ikea piloted five of these in various sizes and locations over a two-year period before coming up with the Planning Studio. Four still remain open – including one in Westfield shopping centre in Stratford.
Bisset says: ‘We’ve learnt loads from the Order & Collection points and its how we came to the conclusion that people love having a bit more help with the planning process.
‘We can hold your hand, inspire you, place the order for you and get it delivered to your home. And if you like, we can install it too.’
The new store showcases products designed to inspire customers and surprise passers by
But Ikea lovers fear not – the firm isn’t turning its back on its typical large out-of-town stores.
It sees the new small shops as supplementary to its existing offer, helping to drive more traffic to its website and its big shops in the long run by being more visible on a day-to-day basis.
Bisset says: ‘For me, it’s about and rather than or. We know people want more options with how they meet the range. We know people want us to be closer to them.
‘Our new city centre approach is designed to complement our larger stores and digital offering.’
The retailer is, however, converting some of its larger stores into distribution centres to help it cope with the continued growth of furniture shopping online.
It abandoned plans to set up shop in Lancashire amid spiralling costs and delays, but is due to open a new big-box store in Greenwich early next year.