Ikea’s business model is centered on the suburbs. With huge footprints and sprawling parking lots, Ikea’s big box stores need a lot of space–and they’re designed for you to go to them.
But in 2018, when the instant gratification of online shopping with free shipping is expected, that model is starting to fail–and Ikea is trying to adapt. The company is shifting its focus to urban centers, with a plan to open 30 stores within cities rather than on their outskirts. Today, Ikea announced that the first of these urban stores will be located in Manhattan, opening in spring 2019.
The shift is a necessary one: Ikea’s profits have dropped 40% over the last year in the U.K., and the retailer recently announced that it would be cutting 7,500 jobs. The company is dramatically shifting its strategy: Instead of requiring you to drive a car to one of its physical locations, it’s investing in a more robust online presence (finally!), building stores closer to where more people actually live, and even bought a startup that helps people assemble their furniture. Meanwhile, the company is targeting people in cities with initiatives like a new series of products devoted to urban farming.
The new location, which will open on the east side of Manhattan a few blocks from Central Park, will offer products tailor-made for city dwellers (read: furniture suited for tiny apartments). Plus, the company’s press release states that the new store “will give customers the opportunity to discover, select, and order Ikea products for delivery to their home, which is what urban residents want and need.” Ikea says that means everything at the store will be delivery only. This decision was made by talking to New Yorkers about what they want, and surprise, surprise: no one wants to lug their Ikea boxes home on the subway.
According to Ikea, the delivery will cost the same as it does elsewhere–starting at $59. Whether that’s low enough for people accustomed to the convenience of free shipping from Amazon and Wayfair remains to be seen.