My local ikea and the challenges of global retail

I live near one of ikea’s next big ideas – a giant, new, eco-friendly store in London.

Unbeknownst to me, ikea is a retailer that’s pioneering lots of new ideas.

Just this week, The Economist wrote admiringly of ikea’s nimbleness. “As other retailers are driven off the high street, partly because of competition from big-box stores like ikea, the company is heading into the heart of London, Paris and New York as part of an expansion into 30 city centres,” said The Economist.

But those heart-of-the-city stores are only half the story. ikea apparently is rethinking its business model in all sorts of ways. The Economist quotes the company’s head of retail, Tolga Öncü, on the three big tasks it has set itself: redefining sales measures, logistics and the whole concept of the store.

What this means is ikea will no longer measure its success by how much it sells per square foot. It also has to ensure speedy delivery of online orders and it’s rethinking the very purpose of its stores. Some might have the full range of products, but the smaller ones are meant more for customers to “touch and feel” items they have seen online. A city-centre store, as in London’s Tottenham Court Road, is merely a “planning centre”, to advise on design. The forthcoming Paris ikea will be small, sell some goods, but focus heavily on being a ‘local’ store. It will aim to draw in the local community and more frequently, with fresh inventory, fresh food, and in-store events.

My sense is that my local ikea is going to throw all three aspects into the mix. Oh, and solar panels too.