IKEA to Open More Small Format Stores; Offer Omnichannel Experience to Consumers

IKEA (part of the Ingka Group), the world’s leading Swedish home furnishings retailer has opened its doors to the first City Store at Worli, Mumbai on Thursday.

Through the Worli City Store, IKEA will be reaching even closer to the many people of Mumbai. The city store format allows IKEA to open smaller stores within smaller spaces available within urban space and makes it more convenient for the many customers to experience the IKEA offer. 

Highlighting how city format stores are different from large format stores, Kavitha Rao, Country Commercial Manager, IKEA states, “The first big change is that our new store is right in the midst of the city in Mumbai. The IKEA stores in Navi Mumbai and Hyderabad are over 400,000 sq. ft, in terms of size, however, the IKEA Worli store spans over 80,000 sq. ft. This means that there might be some part of the range that consumers will not be able to see in the store but we have to make sure that the customers who come into IKEA Worli can shop for the complete range. What is interesting is that there is a part of the range of about 2,000 articles that is available for immediate takeaway and others can be ordered and delivered to customers. Other aspects in terms of room settings and how the range is presented are the same as what one would see in our other IKEA stores”

This store spans across 3 levels. The customers can see all the three different core areas of a home – be it a living room, bedroom or kitchen – and the complete product range is available. 

“We have looked at some of the nuances of the South and the Central Mumbai market and reflected that reality when it comes to room settings and inspiration in the store as well,” she asserts.

“The other important difference is the size of the restaurant – it is much smaller. There are about 80 seats in the restaurant. Despite all these differences, the experiences in terms of inspiration and the ability to shop, the ability to try Swedish and Indian delicacies has been retained as much as possible,” she further adds.

Omnichannel Experience

Customers will be able to shop the entire IKEA range (8,000-9,000 products) facilitated by a well-integrated digital and physical shopping experience. It will offer well-designed, affordable, good quality, functional and sustainable home furnishing products along with ideas and inspirations for every home in Mumbai. 

“IKEA is betting big on providing Omnichannel experience to consumers because it would like to give consumers in Mumbai multiple options – they can shop from the convenience from their homes, leverage e-commerce on IKEA app, come to the Worli store which is very much in their neighborhood or they can take a full day out and go to Navi Mumbai store and immerse in the complete experience of a large format store,” states Rao.

The Worli store promises everything for customers’ homes to help them do more with every space in the house. From the 8,000-9,000 products available at the Worli City Store, over 2,200 products will be available for direct takeaway and the rest will be home delivered.

IKEA coworkers as well as various digital tools will support customers with placing orders for larger items that aren’t available for takeaway. The store will host 03 room sets and inspirations focused on small space living, space-saving hacks, and other needs of the home.  

“We have not cut down on any category. We have all the home furnishing businesses and the product areas that are present. What we have done where may be possible we have reduced the depth of the entire range. We have made sure that where there are 2,000 articles for customers to take away immediately, they can buy the entire range at Worli as well,” explains Rao.

Integrating Tech

IKEA has put QR codes everywhere to support the customer’s journey at the Worli store. 

Explaining it further Rao says, “The customer could be walking around the store with an app and can make a decision to shop through the mobile app and to support this there are QR codes available to support customers both in terms of product details, adding product to carts as well as services linked to some of the larger products be it a kitchen, planning services, or larger furniture items like sofa, mattresses and so on. So, there is significant technology integration because depending on the kind of product customers are buying, apart from picking up home furnishing accessories that customers will be able to take it home directly by paying at the checkout, however, in terms of large furniture there is significant integration within the market and the products can be shipped from one of the different distribution possibilities that exist within the Mumbai market. So, there is some technology integration in the backend as well.”

Future Plans

With a planned investment of Rs 6,000 crores by 2030, IKEA aims to meet 25 million people in Maharashtra, providing over 4,000 jobs, of which 50 percent will be for women. IKEA‘s presence in Worli is expected to boost employment opportunities for the local community. Over 15 percent of all the coworkers are from Worli and nearby areas. IKEA aims to create the best work environment for its many coworkers, by offering equal pay and growth opportunities for all. 

At present, IKEA has an online presence across Hyderabad, Mumbai, Bengaluru, Surat, Ahmedabad, and Vadodara. India continues to be a priority market for the INGKA group as well. It recently announced the launch of its first IKEA-anchored meeting place called Livat Gurugram.  

In cities where IKEA has both physical formats as well as online presence, online sales are in the bucket of 20-25 percent. In the next five years and IKEA expects it to touch 25-30 percent keeping in mind the evolution in the consumer behavior that is changing in terms of digital adoption.

“At this point of time, we are looking at another city store as well in Mumbai which will be announced soon and it is similar to Worli,” she asserts.

“The next destination for us is Bengaluru where we have a standard store which is in the works and we will also be opening a smaller format store in Bengaluru as well. So, that is the next city in our journey. However, it is too early to give the timeline, but we are hoping that it will open sometime in the next year,” she further adds.

Apart from this, in North India, IKEA has started the journey of conceptualizing and designing these meeting place options in the Delhi market specifically. And then that will be the next big destination for the brand to have a presence in Delhi and over time it will start evaluating other cities in the Northern part of the country where it could establish its presence. 

“In all our mega-cities – Mumbai, Bengaluru, or Delhi – we will always have an approach where there will be a plethora of formats, there will be standard stores that will be there, there will also be small-format stores and will also have a presence through e-commerce and the IKEA app which basically gives customers to shop at IKEA in many different ways. This strategy will continue very much in Delhi. One big difference in Delhi is the fact that we are thinking of meeting places and for this, we have partnered with IKGKA centers to work on the meeting places. Some of it will be a lot about experiential shopping and it will just be IKEA, it could also be other retailers with us in those parks. Having said, that both Noida and Gurugram are standard format stores – they are large in terms of their size and over time we will explore options for smaller formats as well in Delhi,” she concludes.