Innovation is more important than ever for bricks and mortar stores.
Retailers are endlessly creative in the ways that they use physical stores, and two big names are showing great examples of that right now.
Ikea may be best known for its big box stores, with their one-way circuit layouts, warehouse exit route, and the option to pause mid-shop for meatballs. But over the last few years the company has been opening smaller units in city centres.
These offer an edited selection of products, often with only smaller items available to take away. Shoppers who order flatpack bed frames or bookcases will get them delivered, and there will be far fewer ‘room set’ displays and more online terminals. This strategy caters well for younger customers, who are likely to live an urban lifestyle. Unlike their parents, who benefitted from cheaper property, these customers are more likely to rent a home and less likely to bother owning a car. They buy fewer big items and need them to be sent to their homes.
But Ikea has not stopped at a new store format. Three years ago Ikea’s property division bought the Kings Mall in London’s Hammersmith, opening a branch of its own and becoming landlord to other retailers.
There is little point having an urban store that exists in isolation. More stores make an area a destination, and Ikea cleverly created one for itself, as well as a new income stream as a property owner. It is now repeating the project in Brighton, where it will cleverly give a new lease of life to a former Debenhams site.
Ikea manages to translate the most appealing aspects of its stores well into units that are very unlike the big boxes we are used to, no doubt using a range of insights. Years ago I was surprised to discover that company reps – who, pre-Covid, used to speed up and down UK motorways to visit clients – often used the cafes in conveniently-sited Ikea stores in preference to the poor food then on offer in service stations.
Visiting an early downsized Ikea store in Madrid I found many customers using the store to meet for lunch or a coffee, before picking up whatever they needed for their home. It’s another example of the brand creating a destination.
At the opposite end of this equation is Avon.
The cosmetics brand is famous for not having any stores at all. ‘Avon calling’ was a catchphrase – preceded by a doorbell chime – that became ubiquitous through the 20th century.
The brand made a USP of the fact that it had no stores. Instead, self-employed reps sold it from the doorstep, or at parties thrown especially for that purpose. In the UK that made Avon virtually immune from the overheated property market and punishing business rates that no government ever seems prepared to address and, long before the internet, it opened up a customer base in homes across the nation.
So why is it now opening stores after 137 years of doing very well without them?
Because of Covid. The brand has 5 million reps around the world, and most of them were unable to make house calls during the pandemic. Avon didn’t get where it is today by ignoring changing demands, hence its move to work with franchisees to open mini boutique branches.
The system has been tried out in the Turkish market, where sales of Avon products doubled. Successful though home sales have been for Avon, it has acknowledged that 80% of beauty products are bought from shops, many of them impulse purchases.
Avon is embracing accessibility and inclusivity with the strategy, which will also see around 100 products becoming available in Superdrug stores; around 150 lines will be available in the boutiques, with the full range only available from its traditional reps.
Two very different brands have come up with innovative solutions to their problems, with a fresh look at how stores are used. If only more retailers would follow suit.