Thursday, December 08, 2016

The Future Of IKEA: Moving From The Potato Fields Into The Heart Of The City

Via Business Insider:

In an interview with the Wall Street Journal, IKEA's CEO Peter Agnefjäll revealed that the furniture giant is increasingly adopting a strategy to bring it even closer to customers: moving into the urban environment.

“The recipe for success so far has been we build quite big stores out in the potato fields, whereas we see by 2050 [that] 70% of the world’s population will live in cities. And there are not so many potato fields in the center of London, so obviously we need to do something to keep IKEA accessible,” Agnefjäll told the WSJ.

The floorspace required for an IKEA store gets pretty pricey when you look at more central real estate, however. The solution is real estate investments that serve multiple purposes. WSJ explifies with a Copenhagen development project that IKEA has invested in. The building will be a combine office, hotel, apartments and an IKEA store.

This scheme does not eliminate higher costs entirely, but the trade-off is that the urban retail stores will be more accessible both in views of customers and deliveries.

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