What: The Wall Street journal reviews how Ikea developed their small-size stores.

Why is this important: Department stores have a new competitor in town from which they could learn.

IKEA faced challenges when creating a new, smaller city-center store format, different from their traditional large suburban outlets. The first such store opened in central Paris in 2019, marking a significant shift in strategy. Initially, the store struggled, offering only 1,000 products with a different shopping experience that lacked the familiar IKEA feel. However, after several remodels, the store now offers 2,600 products, including items for immediate takeaway, and has adopted a more structured layout similar to traditional IKEA stores.

IKEA realized that city-center shoppers, unlike their suburban counterparts, often make spontaneous visits and are interested in purchasing smaller items on the spot. This led to the incorporation of self-checkout points and the use of digital technology, like immersive rooms projecting furniture setups, to enhance the shopping experience in smaller spaces.

The success of this new format, despite initial setbacks, has led to the opening of similar stores in cities like San Francisco, Stockholm, and Copenhagen, with plans for more in 2024. The Paris store, however, will relocate to a new space in 2024 due to logistical challenges, demonstrating IKEA's ongoing learning and adaptation in urban retail.

How IKEA downsized to go downtown