IKEA Plans Smaller Stores With Footprints Easier To Build In Cities

One of the brands most synonymous with sprawling big-box stores is changing things up.

IKEA is opening its first-ever small, urban store on Tottenham Court Road in London this autumn, The Times reports. The move is an adjustment in strategy after the furniture retailer reported a 40% drop in U.K. sales in 2017. 

In the U.S., large retail chains like Target have been experimenting with urban-format stores to increase reach with customers without having to find and pay to operate big footprints. If IKEA's initial foray has promising early results, new U.K. retail director Javier Quiñones envisions further implementation of the concept across Europe, with other global regions possibly following.

The impetus behind the possible downsizing was IKEA's need to create multiple points of access to the brand its for consumers. Though the urban store won't carry the full assortment of IKEA products, it will include a showroom for physical interaction with key products, which Quiñones told the Times is a priority. IKEA is already experimenting with augmented and virtual reality to find more ways for customers to interact with its products. 

The store would also be a more convenient pickup location, offering a middle ground between hauling purchases back from a big-box suburban location and paying for home delivery. IKEA has been investing heavily in its distribution network over the past few years to compete with Amazon's delivery speed, and Quiñones hopes the smaller stores assist in the company's initiative to roll out 24-hour delivery for all IKEA products in the U.K. next year, the Times reports.