Ikea opens new store in Jem, focuses on e-commerce

By
/ EdgeProp Singapore
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April 28, 2021 5:06 PM SGT
SINGAPORE (EDGEPROP) - Ikea has taken 16 years to set up its third store in Singapore. Launching on April 29, the store spans 6,500 sq m (69,965 sq ft) across three levels in Jem mall. Customers can draw inspiration from over 12 room settings, with over 2,500 home furnishing products.
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Ikea’s third store in Jem boasts its first small-store concept in Southeast Asia, housed within a shopping mall (Credit: Samuel Isaac Chua/ The Edge Singapore)
The idea behind the store was carefully calibrated, taking five years to mull over, and two years to lock down. “We couldn’t find land fit for the purpose. And that is why we decided two years ago, that instead of creating the destination ourselves, why don’t we join the best destination in the west?” shares Jaap Doornbos, retail director, at Ikea Southeast Asia.
Ikea’s store in Jem boasts its first small-store concept in Southeast Asia, housed within a shopping mall. This taps into the footfall that the shopping mall already attracts. The mall is linked directly to a bus interchange and the Jurong East MRT Interchange. Globally, there are only a few other Ikea stores that take after such a format, says Doornbos, describing the outlet as a “small store with big ambitions”.
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Digital retail push

One area where Ikea’s ambitions play out is e-commerce. Customers can order their favourite Ikea meals through the app, and pick it up at the dedicated “click and collect” counters. “We can’t have the space for a massive restaurant like in Tampines, so we have to make smart choices on space,” Doornbos says. This ensures that customers who cannot get a seat get the option to take-away their meals.
He is hopeful that the service could be “very convenient” for office workers in the vicinity. “The idea is that the customers are in control of the process — so you decide when you want something, how quick you want it, which is the opposite of a delivery,” he says.
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Customers can order their favourite Ikea meals through the app, and pick it up at the dedicated “click and collect” counters (Credit: Samuel Isaac Chua/ The Edge Singapore)
In the neighbourhoods of Alexandra and Tampines, Ikea currenty occupies standalone buildings that fit its retail, restaurant and warehouse logistics operations. The two outlets combined attract close to seven million visitors a year.
Beyond its “click and collect” service, Ikea is also currently in talks with food delivery service Foodpanda to expand the delivery of its Swedish Food Market products islandwide and aims to roll this out in six months. These range from frozen goods to jams and drinks.
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Currently, the service is already available on the delivery platform, but is limited to households within 4km of the Alexandra and Tampines stores. Doornbos says the company is studying how to overcome the limitation without compromising on the cost and quality of the products once they are delivered.
In Ikea Jurong, each of the three floors has its own checkout area. Payment counters are entirely cashless, a move away from the cashier counters in Alexandra and Tampines.
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Payment counters on each of the floors are cashless, a move away from the cashier counters in Alexandra and Tampines (Credit: Ikea)
Digital and interactive screens will also be available throughout the store. In the checkout area, screens will show the number of people in each queue. In the different home living sections, digital tablets are fixed onto walls that will allow shoppers to pick and choose from Ikea’s catalogue of furniture and fittings, view them in different colours, and plan their layout. This helps with space, as the store cannot afford to house bulky furnitures in all options.
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Ikea has also done away with logistics space for its Jem outlet. For its Tampines and Alexandra stores, there are dedicated warehouses of 15,000 sq m each to store goods and run its logistics operations in, but in Jem, this space has been reduced to 80 sq m. “If we bring in goods here and refill the stock, and it wouldn’t fit, for some reason, then we would bring it back into the basement here,” says Doornbos.
To handle logistics, “trucks will come to the Tampines store, discharge, cross-dock the items [by] offloading them in smaller trucks that will go directly to the Jem store”, he explains. To make up for the lack of storage space, customers ordering bulky items from the mall will instead get them delivered from the Alexandra and Tampines stores.
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Located in the restaurant at Level 4, the digital interactive wall utilises motion sensors to allow children to colour the picture by waving their hands (Credit: Ikea)

Higher online demand

Due to the pandemic, Ikea has seen its e-commerce business grow by 25% to 30% over the last 12 months. When its physical stores were closed to comply with the government mandate, the growth was even higher, shares Doornbos. As a result of shoppers going online, e-commerce now contributes 16% to 17% of Ikea’s revenue in the city-state.
In fact, Ikea has found that there is more e-commerce demand in places where it already has a physical store. “With this store, we would expect e-commerce revenue to go up further to 18% to 19% [of the revenue],” he adds. For the Jem outlet, Ikea is targeting to attract three million visitors a year.
Ikea is currently exploring opening up four more dedicated locations to house its planning studios, likely to be in the north and central regions of Singapore. This will showcase its tie-up with interior and renovations start-up Livspace, which will offer end-to-end solutions of fitting out homes in Ikea merchandise. In January, it opened its first planning studio in Jurong Point mall, which is linked to Boon Lay MRT Station.
From venturing into home renovations, to opening new concept stores while the pandemic roils on, Ikea has shown — much like the assembling of its furniture — that elbow grease and nimble planning is how it will remain relevant to its customers.