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How Ikea is Disrupting Itself by Opening It’s First Urban ‘Planning Studio’
When thinking of an Ikea storefront, you probably think of some of the tentpole features found in the furniture retailer.
A maze like layout, a warehouse full of furniture you will begrudgingly put together later, and some of the greatest meatballs on the face of the earth. However, in an effort to acquire new customers, specifically millennials in urban cities, Ikea looks to disrupt itself and do away with those tentpole features by opening its first urban “planning studio” on Monday April 15.
Located in New York City on the Upper East Side, Ikea’s planning studio is taking inspiration from brands like Casper (planning on opening 200 stores) and Warby Parker (with 90 storefront locations), who are now looking at rent physical spaces as a different marketing channel and an opportunity to educate and engage their customers.
The planning studio has a smaller footprint at 17,350 square feet, compared to the usual Ikea warehouses and invites customers to browse products, have access to expert designers, and have purchased products delivered for a nominal fee.
The planning studio is part of Ikea’s overarching strategy of empowering customers to shop in the ways that they expect by providing space for more live mockups, on-site consultants, increasing emphasis on delivery, and assistance on constructing purchases shown by their acquisition of TaskRabbit.
When Ikea announced its intention of opening two more of planning studios in San Francisco and Washington, they also announced that they would be cutting 7500 jobs. This is sparking concern around how this strategy will affect the number of employees Ikea will have on staff per store moving forward, with the current planning studio only needing 25 people to staff the store.
Ikea is not alone in moving toward a smaller store footprint, recently Target has opened over 130 small stores, and Krogers has opened 13 Krogers Express shops inside of Walgreens.
With Store Closures Looming, Pier 1 Appoints New CFO to Get Back On Track
Coresight Research recently reported that over 6500 stores are slated to close in 2019. Included in these sweeping closures is about 145 Pier 1 stores.
This past January, Pier 1 faced delisting in the New York Stock Exchange with its closing share price dipping below $1 over a 30 day period. In addition. fourth quarter sales fell 19.5% to 412.5M from $512.2M compared to the same quarter a year before and net sales in 2019 fell 13.7% from $1.6B from $1.8B.
In response to these challenges Pier 1 has announced that it will be increasing its focus on cutting costs and improving their margins, streamlining their marketing campaigns, focusing on their sourcing and supply chain, reworking their store layouts, and appointing a new interim CFO Deborah Reiger-Paraganis.
Earlier this year Pier 1 announced that as they continue to work toward sustainability they would be eliminating roles, adjusting responsibilities, and creating more efficient reporting structures. Reiger-Paraganis is a key part in this restructuring, and is the managing director at AlixPartners with over 30 years of experience working with retail companies’ finance and operations arms.
Are Kohl’s and Aldi Leading the New Era of Retail Partnerships?
As department stores continue to evolve to adhere to customers shopping preferences, they are shifting their focus from static large store footprints to smaller convenient experiential storefronts.
With over 1100 locations and an increased focus on e-commerce, Kohl’s is looking to maximize their extra real estate by partnering with experiential and service brands to increase foot traffic. Some of these partnerships include Planet Fitness, which will open 10 fitness centers near different Kohl’s locations in the next year, and Amazon, where customers will be allowed to return their online purchases at select Kohl’s locations.
In addition to the Planet Fitness and Amazon partnerships, Kohl’s and Aldi teamed up to open 10 locations next to each other, with the first one opening earlier this year in Waukesha, Wisconsin. Following the opening of this first store, market research firm Field Agent polled 3000 consumers and found that 90% of those polled would be moderately interested in shopping at both at a Kohl’s and Aldi combo, while 38% said they would be “completely” likely to do so. Grocers like Aldi tend to see traffic spikes during meal times and after work, and the hope would be that the partnership with Kohl’s will bring in more daytime and weekend shoppers.
Sounding Smart by The Retail Water Cooler
As unemployment remains low and consumer confidence remains high most retail segments saw month over month sales grow by 1.7% and 2.5% growth year over year. While e-commerce saw 1.2% month over month growth and 11.6% year over year.
With the pre-owned retail segment projected to reach $23B by 2023, Neiman Marcus has acquired a minority stake in preowned luxury handbag and accessory retailer Fashionphile.
Walgreens and Nordstrom look to improve customer experience, raise engagement, and reduce shipping cost by partnering with pickup and return network Narvar Concierge.
Kohl’s donates $10M total to Alliance for a Healthier Generation, Boys & Girls Clubs of America, and Children’s Hospital of Wisconsin as part of CSR initiative.
Amazon takes on 8 South American countries for the right to use .amazon domain name.