Ikea Canada planning up to 10 smaller stores

Ikea Canada plans to open as many as 10 smaller stores across the country within the next year or so, its newly named president said in a recent interview with a Vancouver business publication.

Stefan Sjöstrand, who was named president of Canada’s second largest furniture retailer in September, told Business in Vancouver the stores would cover about 37,000 square feet, about one-10th the size of a full-size Ikea.

He said most of the space in the new stores would be for storage and, unlike a full-size Ikea Canada, will function as “pick-up” stores sporting counters from which Ikea associates would retrieve items for customers who order product online. In the future, it’s possible some of the locations will also have small retail displays.

Opening smaller stores in areas that cannot support a full-size operation is becoming increasingly popular among Canadian retail heavyweights. Companies such as Walmart Canada and Best Buy Canada have been experimenting with the concept.

Although exact locations have yet to be pinpointed, Sjöstrand told Business in Vancouver “the pick-up stores will be on the West Coast and all over the country.”

“I hope that a year from now we will have five to 10 pickup points,” he added.

Ikea Canada currently operates 12 full-size locations in greater Vancouver, Edmonton, Calgary, Winnipeg, Toronto, Ottawa and Montreal. There are probably not that many cities or urban centers left in Canada capable of supporting stores covering between 300,000 and 400,000 square feet of retail space.

The company is also responding at least in part to a recent study commissioned by Purolator, the Canadian courier company, that suggests 73% of Canadians want the option to pick up online purchases in a store.

E-commerce is a growing segment of Ikea Canada’s business, accounting for 5% of its $1.7 billion in annual sales. To date, those transactions required product to be shipped to the customer from a distribution center.

Sjöstrand believes opening specialized pick-up stores is more efficient than opening pick-up areas in existing full-size Ikea stores. They will also give the retailer more distribution points as well as providing easier access for customers.

“The ambition is to make Ikea more accessible to the many Canadians through a multi-channel environment,” Ikea Canada public relations manager Madeleine Löwenborg-Frick told Furniture/Today.

“This will be accomplished by examples such as increased service offers, pick-up points and an improved e-commerce interface, all resulting in our customers having easier access to our products,” she said. “At the same time, the inspirational in-store shopping experience will continue to be the base for our operations.”

Source: Furniture Today