The new two-story store marks the starting point for a new city concept, where the world's largest IKEA retailer, Ingka Group, wants to focus on major cities instead of traditional suburban locations, which are most common among IKEA stores.
The deal is part of IKEA's ongoing investments of over $2.2 billion in the US, with more planned city stores on Manhattan and Fifth Avenue, among other locations. The concept has already been tested in Paris and London, where the stores are smaller and the product range is more tailored to urban customers. The upper floors of the Soho property will be rented out as office space, providing additional revenue streams.
Expansion in central locations
With its city-focused expansion, IKEA is responding to a clear trend: the new generation of furniture customers want to shop locally, quickly, and preferably in central locations where deliveries and showrooms offer inspiration in everyday life. The US market has been tough for foreign actors, but IKEA is increasing its presence significantly over the coming years, contrary to the trend of store closures among other retail giants.
The Swedish furniture giant also wants to become a store for sustainability, smart homes, and digital support with apps, delivery booking, and AR solutions to compete with online actors like Amazon and other e-retailers.
IKEA is a unique example of Swedish corporate culture, innovation, and growth on USA, the world's largest market, with the potential to change how American consumers think about furniture and interior design.
IKEA city expansion also in Sweden
The central location concept also exists in Sweden with a city store in the middle of Stockholm (Gallerian) and smaller formats have opened or are planned in, among other places, Mall of Scandinavia, Malmö city center, and several other Swedish cities. In addition to city stores, there are also planning studios/ordering stores, where you can't buy furniture directly, but can get inspiration, planning help, and order the entire IKEA range for home delivery or pickup.
