Retail wars: Ikea’s big ‘small’ idea may target online space, improve customer outreach

IKEA is also scouting for more land in Maharashtra as they plan to set up warehousing facilities over the next two to three years. The company has earmarked an outlay of Rs 750 crore and plans to provide job opportunities to another 500 to 600 people.

IKEA is considering small stores or ‘experience centres’ within city limits to boost its direct customer outreach and wade into India’s online sales segment currently dominated by Flipkart and Amazon. The Swedish furniture giant plans 25 such sites by 2025, reports the Economic Times.

Known worldwide for its huge off-city warehouses, usually ranging more than 400,000 square feet, the company now plans to function sites as small as 15,000 sq ft as digital planning points and sites ranging 50,000-100,000 sq ft for stores within city limits, the report added.

Ahmedabad, Surat, Pune, Chennai and Kolkata are said to be among the cities which would get these experience centres. The first such store will begin operations in Mumbai by 2020, the paper added.

The move under IKEA's multichannel strategy would target online buyers who prefer a ‘touch and feel’ experience prior to purchase, while the smaller venues would also help increase savings on purchasing/renting real estate, the article pointed out.

Called ‘touchpoints’, the idea has been borrowed from similar plans for the UK market, where the company would allow customers to visit for complicated purchases (kitchens, bedrooms, etc.) before ordering online, it said.

India’s fast-growing digital and e-commerce market is the draw and the company expects the country’s online sales to overtake global average of 8-10 percent.