IKEA plans to build reduced and compact shopping centers as it expands throughout Southeast Asia that greatly differ from the vast facilities consumers are used to.
A 28,000-square-foot prototype location is already up and running in Phuket, Thailand, which is nothing in comparison to the typical 200,000 to 450,000 square foot centers the brand builds. This move from the furniture retailer allows for facilities to be erected in the midst of crowded city streets.
Currently, consumers in the Philippines and Vietnam are buying IKEA's product from third party retailers as there's no nearby brick-and-mortar locations According to Retail News Asia, IKEA's Southeast Asia locations will heavily emphasize at-home deliveries so the brand can keep less inventory on-site.
Compact Furniture Retail Expansions
IKEA Will Build Compact Shopping Centers in Southeast Asia
Trend Themes
1. Compact Shopping Centers - The trend of building compact shopping centers allows for facilities to be erected in crowded city streets, providing convenience for consumers.
2. Reduced Inventory - The trend of emphasizing at-home deliveries and keeping less inventory on-site creates opportunities for streamlined operations and reduced costs.
3. Third-party Retailers - The trend of consumers buying IKEA's products from third-party retailers highlights the potential for collaborations and partnerships in expanding distribution channels.
Industry Implications
1. Furniture Retail - The furniture retail industry can explore the disruptive innovation opportunity of building compact shopping centers to cater to urban customers' needs.
2. Delivery and Logistics - The delivery and logistics industry can benefit from the reduced inventory trend, offering efficient and flexible fulfillment services for retailers with a focus on at-home deliveries.
3. Distribution and Retail Partnerships - The trend of consumers buying IKEA's products from third-party retailers presents an opportunity for the distribution and retail industry to establish collaborations and expand their product offerings.