It’s no news that people around the world have opted out for online shopping given its convenience, but can Ikea become the lost link to bring people back to malls? Ikea, traditionally being a stand alone facility, is now looking to integrate with malls. Ingka group, headquartered in the Netherlands, operates, “379 Ikea stores and 103 Ikea shops and Ikea planning studios in 31 countries” (weforum.org, 2024). In 2022, they were credited with the 680 million customers to Ikea locations globally, combined with 3.8 billion website visits.
To rejuvenate the declining in-person shopping experience, they sought out ways to offer more than just shopping. “Foot traffic to U.S. malls was down 4% on average in 2023 from the prior year, and about 12% lower than 2019 levels” (Moss, 2024). Even with this shift, Ingka Group is still betting their chances of expanding in malls. According to Cindy Andersen, head of Ingka’s real estate division, they look for malls that have strong retail stores, for example; Apple and Zara, coupled with development potential for real estate options. “Ingka isn’t the only proprietor attempting to enliven its malls, he said, though its ability to use IKEA stores to generate buzz makes it unique” (Moss 2024).
To begin, they invested about $65 million to develop new concepts to gain the lost consumers and even retailers back to their properties, and down the line globally as well. The first of these concepts was opening up Hej! Workshop that is fully furnished with Ikea furniture. With an enticing offer of $399/ month for office space that holds up to 500 workers, businesses are flocking to their locations. This serves as both a profitable business alone as well as bringing more people to their malls to use this service. They are also adding Saluhall which is a food hall that offers mostly plant-based and locally sourced food options inspired by Nordic cuisine. Inspired by the already popular food court options in their existing Ikea stores, they went beyond to add to fan favorites. Another exciting avenue is their addition of playgrounds for children inspired by outer space themes.
Rebranding themselves to be a multi-facted facility, especially after the negative effects from the pandemic, has already shown to produce results. Strategizing to convince shoppers that visiting stores in person is much more beneficial than that of being at home, is what contributes to their success. They are already planning to take these concepts to China and India in 2025.
References:
https://www.weforum.org/organizations/ikea-group/
https://www.wsj.com/business/retail/can-ikea-save-the-mall-0bc67170?mod=Searchresults_pos5&page=1