Ikea arrived in the centre of Madrid on Thursday. The Swedish furniture retailer opened a temporary shop on one of the Spanish capital’s busiest shopping streets, calle Serrano, with the aim of getting closer to customers and offering them a new shopping experience. Ikea is following the lead of other large brands that are moving from the outskirts to city centres: Decathlon has opened a shop in the centre of Lleida and a Decathlon City in Gràcia, Worten has opened in Sant Antoni, as have Carrefour, Media Markt and soon Leroy Merlin, all opening what can only be described as neighbourhood shops.
This Ikea pop-up store, which is 900 square metres in size and spread over two floors, is opening its doors under the name Ikea Temporary Dormitorios, because for the first six months the shop will be devoted to this part of the house, the part of the home “most valued” by customers.
Decathlon, Worten, Carrefour and Media Markt are all opening as neighbourhood shops
"The project is super important for the company, it is special because we are innovating with new formats and it will be much more than a temporary store. We are looking to get closer to our customers," says deputy general manager of Ikea Ibèrica, Antonella Pucarelli, who does not rule out extending this format to other cities in Spain.
The crisis has changed shopping habits. Large retailers in cities work according to a formula based on infrequent but concentrated visits, especially at weekends, and with an average higher spend. The fall in the number of visitors as a result of the crisis has left the large brands installed on the outskirts of cities with little room for manoeuvre. So these companies are now focusing on city centres. The stores in local shopping areas appeal to a more compulsive way of shopping throughout the week. Ikea wants you to pick up some sheets when you go out shopping, Decathlon wants you to take away a pair of trainers if you are out in the centre and Worten would like you to pick out a new washing machine.
These shops offer proximity and at the same time give firms the chance to try out new services. So, the Ikea shop in Madrid will offer personalised products, such as free, on-site embroidering of sheets and cushions, furniture lacquering or bed headboards personalised with fabrics. This format also provides a new experience compared with shopping online.
Retail R&D
Esade marketing professor, Lluís Martínez-Ribes, thinks that these large firms will continue to exist on the outskirts for two basic reasons: "Because of the price of each square metre and because their business models need large spaces for them to express themselves as a commercial formula." Nevertheless, the large brands are exploring and setting up in city centres: "What Ikea is doing in Madrid is an exercise in R&D," he says.
For the professor, the world trend towards living in cities and the emergence of smartphones have had an impact on retail: "The vast majority of people have a digital device, a telephone only a metre away for 24 hours a day, something that makes it easy to shop at a distance." At the same time, "the feeling of not having enough time is growing and so travelling becomes an obligation to avoid." And the industrial outskirts are far away from where the customer lives.
"The more expensive the purchase, the more willing the customer is to travel a distance"
Martínez-Ribes points out that "a difference must be made between doing the shopping and going shopping." Taking the car and going to the outskirts to do the monthly shop is a downward trend. Every day there are more people who do this shop closer to home, together with a growth in shopping for food on the Internet."
However, when it comes to going shopping, things are different. Buying clothes and shoes or new furniture are different activities. "The more expensive the purchase, the more willing the customer is to travel a distance," says the professor, who points to the town of Sénia as an example: "If you have to furnish a whole flat, it is worth spending a day in Sénia, but not just to buy a bedside table." Therefore, the distance that the customer is willing to travel is inversely proportional to the cost of the product they want to buy.
Selection of products and logistics
Yet, obviously, the number and type of products available in these smaller shops cannot be the same as in the stores located in large industrial estates next to the motorway. And anyway, they cannot be the same because the customer is not looking for the same thing when walking around the centre as when they make a trip to the large stores. More than anything because the space available will never be comparable.
Finding a central shop that is big enough is one of the challenges facing these brands, because their margin is narrow and they have a lot of competitors. Thus, the model of the ephemeral store can be a good way to start testing the waters, as in Ikea’s case.
"Logistics is a great help for these new ways of selling"
As for the selection of products, the marketing professor says that there will only be a small sample and it will be accompanied by ecommerce: "There is no need to show everything, as the retailer’s catalogue will complement the shop with an offer online." This is what is behind the idea: the shops as a complement to the large store.
The key for balancing these two facets is logistics, "one of the factors that is revolutionising retail today. Logistics is a great help for these new ways of selling, geographically and emotionally," says the professor. If someone buys a blender in a Worten shop in the centre of Barcelona, they can take the product directly home with them, but if they buy a washing machine "it will be sent to their home from a distribution centre on the outskirts, it will neither go on display or be part of the shop’s stock."