IKEA goes to town with new focus on city stores

IKEA Group’s new CEO will focus on developing new stores and showrooms in city centers as the surge in e-commerce and home delivery dims the appeal of its giant out-of-town warehouse stores.

The world’s biggest furniture retailer has relied for decades on shoppers driving many miles to load often heavy and bulky items into their cars.

The rise of online shopping means consumers are getting used to having purchases delivered to the home, so Sweden’s IKEA is investing in e-commerce and services and trying new concepts such as pick-up-and-order points and city-center showrooms.

Jesper Brodin, an IKEA veteran who became CEO in September, said he planned to make some changes to IKEA’s overall strategy early next year but the top priority was to test more store formats in towns.

“In what way can we better serve customers that live in city-centers?” he said in an interview. “That is one area we are going to step into with a lot of entrepreneurship.”

IKEA Group this year opened a kitchen showroom Stockholm and a bedroom store in Madrid, and plans include full-range showrooms in London’s Greenwich borough and Copenhagen in 2019 and 2020.

“We will now test not only kitchens and bedroom but living room, total range, part of the range. That’s what we are going to do in the coming years: to develop the menu for the world of IKEA in city centers,” said Brodin.

The company will also focus on home delivery options as well as developing the online store, he said.

IKEA Group made its first-ever acquisition this year, buying on-demand odd-jobs platform TaskRabbit. Brodin said more may follow as one way to stay on top of innovation and develop the core business.