The news of IKEA’s first UK store closure indicates that even the seemingly invincible Swedish giant isn’t immune from the perils of the high street.
The closure of this particular site seems to be a pragmatic biting of the bullet.
The closure of the retail chain’s city-centre Coventry store is a timely affirmation that the fundamentals of retailing and evolving consumer trends can’t be ignored – even for IKEA.
However, it’s not all bad news. As reported, the closure of this particular site seems to be a pragmatic biting of the bullet. Rather than a foretaste of complete brand collapse, the loss-making store’s issues were rather down to an unappealing layout and unsuitable location.
Potential customers balked at the idea of lugging their purchases across seven levels and then through the hubbub of central Coventry when they could simply either order online or drive to a more convenient retail park.
A step in the right direction?
The IKEA business is rightly, in our view, taking a hard look at its estate with a focus upon evolving and adapting its physical spaces to the increased consumer demand for enriched shopping experiences.
What’s more, it’s vital not to lose sight of the fact that IKEA is fundamentally a strong, loved brand and business – with solid relevance to the modern UK consumer; the experiential appeal of the Scandi flat-pack, maze-following purchase experience is far from dead.
The brand keeps things fresh with innovative enhancements such as augmented reality with direct room-fitting as well as visual search applications— not to mention its much-loved meatballs.
This distinctiveness of brand experience and customer connection is reinforced by the presence of IKEA within the top five of our Top 100 Most Loved Retail Brands 2020 league table. Its latest BrandVue Retail affinity (like/love) score of 74% (some 10+ points in above the category norm) underlines the affection customers still have for the brand.
What this minor blip does is remind us that while the economic environment is a harsh one, commercial opportunities do exist for the businesses most adaptable to evolving models of consumption and shopper behaviour. In doing so, brands need to make experiences rewarding and immersive as well as offering value.
Savanta’s insights are fuelled by BrandVue the largest and most comprehensive brand, audience and customer tracking engine in the market.