Apr 1, 2024 - Economy

Ikea is growing bigger by going smaller

Illustration of a hand balancing a tiny IKEA store on their finger.

Illustration: Annelise Capossela/Axios

Ikea is planting smaller stores across the country and around the world.

Why it matters: Like other retailers, Ikea wants to make it easy for shoppers to buy online and in-person.

Driving the news: Axios toured one of the furniture brand's newest small format stores last Thursday.

  • Located 40 minutes outside of D.C., the Ikea "Plan and Order Point" in Gaithersburg, Maryland is about 8,800 square feet, or 2% the size of the closest warehouse store in College Park.

Between the lines: The Gaithersburg location, which opened mid-March, carries about 500 "really popular takeaway" products, compared to about 10,000 in traditional Ikea stores, market manager Tony Giacona tells Axios.

  • And attached, but separate, is an online order pickup area.

What they're saying: "This doesn't replace any of the bigger stores," said Giacona.

  • "You can plan or you can order anything that a regular store carries and pick it up here."

My impressions: Ikea's warehouse stores can be overwhelming.

  • This store was not.
  • Visiting it scratched a certain itch that one can get when bit by a redecorating bug, without the risk of impulse purchases.

The intrigue: The store lacked a cafe and even frozen meatball options, as that would require additional grocery and food sale licenses — but it's "definitely on the table [and] is frequently requested from customers," Giacona said.

Three fun things: As a 31-year veteran of the company, Giacona describes three typical Ikea shoppers this way:

  • "The planned customer": The people who know what they want and come in with a list.
  • "The experience couple": The people who are coming in and want to "be amazed" and touch, feel and explore to get inspiration.
  • "The online customer": They've done their homework but "now they want to spend some time interacting, to have some meatballs, make sure they want to validate their decision online," where they'll likely complete the purchase and get things delivered.

What we're watching: More than 70 new Ikea locations opened globally during its 2023 fiscal year — the majority of which were small stores and plan-and-order locations like the one Axios visited.

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