Anyone who’s ever needed to shop for furniture has been inside an IKEA: the high ceilings and vast open spaces remind you that you’re wandering through a warehouse of options. Though this allows the Swedish-founded chain to display a wide array of styles, designs, and types of furniture, it can feel overwhelming to the average consumer who is looking for one simple piece. Well, anyone who has ever loathed a trip to IKEA can rejoice: they’re changing their ways.
After announcing a 1,600 sq. ft. showroom in Manhattan’s Upper East Side (set to open Spring 2019), IKEA has committed to leaving their cavernous stores behind. In the past, the retail giant relied on expansive 300,000 sq. ft. showrooms where customers were forced to explore a labyrinth of aisles in search of their prize. With companies like Amazon, Target, Wayfair — even Williams-Sonoma — encroaching on the home furnishings market (an area IKEA previously dominated), IKEA has been forced to change their tactics.
“IKEA is very conscious that they have to make more effort to be where people want them to be,” said Neil Saunders, managing director of GlobalData Retail. “The old big store model was very ‘build it and they will come.’ But that no longer applies.”
They stated in November that they’re planning on laying off 5% of their global workforce (around 7,500 employees) in an attempt to restructure. The new focus will be on building 30 smaller stores in major cities throughout the next few years.
In addition to the physical change, IKEA is revamping their digital presence: they’ve invested in online pickup services, digital fulfillment centers, and purchased TaskRabbit, an online marketplace that matches freelance labor with local demand.
“Retail is changing as we speak,” IKEA’s US chief Lars Petersson said. “Urbanization is going on very fast.”
He’s right: with the rise of startups and direct-to-consumer businesses, customers have the pick of the litter. Around 91% of sofa-buyers value quality and durability, and with so many companies (like Interior Define or Burrow) offering just that — in addition to budget or customizable options –, it may be hard for IKEA to keep up.