Scandinavian home furnishing retailer IKEA will open its first city store in Jing’an District in Shanghai on July 23, aiming to get closer to its customers.
Unlike typical IKEA stores which are warehouse-scaled and located in the outskirts of town, the three-story IKEA City Store stands on Nanjing Road W. in one of Shanghai’s CBDs and aims to attract office workers.
Compared to its Baoshan Store, Xuhui Store and Beicai Store in Shanghai which each have about 9,500 items on display, Jing’an City Store covers only 3,000 square meters and displays approximately 3,500 kinds of merchandise with about 1,200 of them easy to take away. For large items, customers can scan the QR code on the products to see details and place orders online that will be delivered later.
Since its first Chinese outlet opening in 1998 in Shanghai, IKEA has evolved its strategies in China from traditional out-of-town warehouse and entirely offline format to digitalization and accessibility. The company is seeking to meet the needs of different customer groups in Chinese megacities like Shanghai. Its Yangpu Store displays many model rooms suitable for young people, targeting college students and young consumers due to its neighboring universities. The IKEA City Store in Jing’an marks yet another step of the company towards precise marketing. Besides its mini-size and reduced products on shelves, IKEA City Store provides set menus for family shoppers and bento boxes for nearby office workers.
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“We’re seeking to diversify store formats, including online channels as well, to complement each other in order to test, learn and gain feedback from customers to fuel future growth,” said Francois Brenti, vice president of IKEA China, in an interview with Jiemian. In the digital era where e-commerce grows unprecedentedly popular, IKEA is insisting on the hybrid route of online shops and physical stores, combining a fun offline experience and convenient online shopping.
Anna Pawlak Kuliga, president of IKEA China, revealed last year that IKEA’s 2020 fiscal year will witness its largest total investment since it entered the Chinese market in 1998, which will reach 10 billion RMB. The investment will be used in physical stores, services upgrade, product development, digital exploration and many other aspects.