IKEA: smart (late) move to meet the millennials

IKEA finally opened a store in the heart of Paris: 500k sqm with services, restaurant and a whole new approach to the millennials customers, the cluster everyone in the retail industry wants to target properly. The Paris move is a first step in a major investment plan of 400+ millions of euros in two years. A late move, but made properly: a strong step into the new retail marketing merging online and offline interactions with the customer base, the only one that definitely pays out with the millennials.

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Millennials are the customer base to target: due to increasing income capacity, trend setting attitude and a true omnichannel consumer behavior that are difficult to be met with huge megastores far from urban centers. Getting stuck in traffic and going crazy in a huge parking lot of a peripheral megastore, to choose your cheap furniture and design pieces in a endless maze-showroom really isn’t a grub millennials would go for. A proper retail marketing strategy, therefore, must focus on e-commerce, services, and personalization with a professional care of the multiple touchpoint in the relationship with the customers, jumping in and back from offline to offline brand interactions. Transforming the shops into flagship stores in a lively central area, perhaps allowing a convenient online order or browsing inside the store while asking architecture dilemmas to a well trained store staff, could really make the difference while competing with molchs like Amazon or rival vertical home/furniture markerplaces. The size of the Parisian store itself is drastically reduced, compared to the usual standards. And yet, thanks o the digital extension, it represents an excellent approach to new retail that the Swedish giant has extended to other countries, perhaps with bold formulas such as long-term temporary stores, or small and very small stores in the symbolic districts (see Stockholm, Madrid or thirty thousand square meters in London’s Millennium Way Retail Park). We will soon see similar moves in Rome and Milan.

However, Paris has really marked an important point in favor of Ikea: the idea of ​​transforming a subway station into a live showroom, immersed in the urban context, is definitely a winning asset. Not only for media coverage, but for the marketing message and commercial identity that it transmits to the millennials: we come to you, with the design in your pocket and a widespread experiential showroom: from the underground station to your smartphone and a in-store experience completely renovated from scratch.

Better late than never … how do they say it in Swedish?

chart

Next stop US? the chart shows the online turnover (in millions of dollars) of ikea.com in the United States. Of course we are far from the amounts recorded in the same category by big players like Amazon.com or Home Depot, but certainly the growth rate is interesting even if it’s slowing down this year. The USA is still the first market for Ikea.com (20.7%), by the way…

Header photo by Pedro Lastra on Unsplash

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