IKEA’s new high street store - Mintel’s initial thoughts

Having visited IKEA’s new Hammersmith store, I was struck by a number of observations. Firstly, how well located the shopping centre is, with tubes, buses, bike and scooter points all in the close vicinity. Walking into the store, you immediately notice the number of staff on hand, providing a range of services from simply directing queries through to the dedicated planning studio teams.

Entrance to IKEA’s new Hammersmith store

Source: Mintel

In terms of floor plan, IKEA has utilised its 4,600 square metres with real-life engaging displays fit to local needs, such as home storage and compact workspaces. A number of key trends such as sustainability, wellbeing and value serve a central thread, while additional services, such as home delivery and finance options are well signposted throughout. All in all, this Livat multi-purpose store centre presents an exciting look into IKEA’s view of future retail, but in a rapidly changing marketplace this format will require near-constant evolution.

How can IKEA bolster footfall in its new store?

While there remains a clear role and demand for physical stores in home retail, the redirection of demand online has changed how consumers interact with stores for good. This, in turn, requires stores to do more to ensure footfall.

The key here is in providing services and experiences over and above that available online. At a top level, IKEA has satisfied an essential element of this already. Indeed, in locating in a shopping mall alongside a range of other stores and food outlets, the new store allows for a multi-mission experience: leaning on its neighbours to provide a wealth of reasons to visit in-store over the alternative online.

King’s Mall shopping centre
Source: Mintel

On top of this, the store can do more itself to regain this footfall. Two examples of this which the group has already harnessed is with its second-hand ranges and the BuyBack scheme: offering in-store credit in exchange for unwanted items. However, the group could build further on this. Learning from its openings in Vienna and Shanghai, IKEA could include a Makers Hub, catering to those looking to repair old items in-store. Or provide an area for upcycling or furniture rental; thereby making its Hammersmith location a go-to for all things sustainability.

Source: Mintel

Elsewhere, the group could streamline the store purchasing journey through mobile apps: one which provides real-time locations, stock checks and, significantly given continued anxiety around COVID-19, information on how busy stores are at certain times.

What’s next for IKEA’s physical network?

It is important to note however, that the new format Hammersmith store does not mean a total strategy shift from the more ubiquitous big-box store formats. Indeed, IKEA opened a new full-size store in Greenwich, London in 2019, while it announced plans to open 50 new stores globally in late 2020. The new approach, then, will be a more integrated one where they supplement these old favourites with newer store formats.

The future could see further ‘Livat’ multi-purpose store concepts across the UK market. While, in exploring broader formats, one can simply look at what IKEA is doing abroad. In May 2021, the group introduced a new format 2,900 square metre ‘Décoration’ store in Paris, focussed particularly on interior design with seven areas of home inspiration that change according to the season and prevailing trends. Then, ahead of its launch in October IKEA hosted a moving pop-up display to showcase its products real-time in new and exciting locations around the Philippines, with an opportunity to engage with staff.

Source: Mintel

In November 2021, IKEA opened a miniature 3,000 square foot concept store in a supermarket in Hong Kong. Given its size, the store has digital at its core: featuring a 2-metre-high interactive screen with 50 home decorating inspirations and a range of free cooking recipes. While product ranges will be limited, the store offers self-pick-up lockers and free home delivery. Any such move in the UK would follow the recent path beaten by shop-in-shops with AO at Tesco stores or B&Q’s partnership with Asda.

Alternatively, we can simply look closer to home. In October 2021, IKEA announced the purchase of the former flagship store of Topshop on Oxford Street, with plans to open in 2023. The purchase not only underlines the group’s commitment to large stores in the UK, but their bold willingness to experiment. Importantly here, as we’ve seen before with the closure of both London planning studios, IKEA is not afraid to cut its losses once a concept is deemed not to have worked. Given its central London location, the store will again be centred on smaller items for immediate purchase and larger items for delivery. In this regard, the Hammersmith store can be considered as a barometer for its future interest.