The only way is up

For retailers, the home furnishings sector is one of the more difficult areas to operate in. Plummeting consumer confidence and a faltering housing market are both contributing to a challenging environment. Couple this with a number of retailers deciding to move into homewares during the course of 2007 and you might well infer that a perfect storm is brewing.

At one point this year, it seemed as if almost every week brought news of another mainstream retailer deciding to take the plunge and move into homewares. Next ramped up the roll-out of its new-born Next Home format and, in the early autumn, Marks & Spencer decided the time was right to launch M&S Home, a solus shop in Lisburn, Northern Ireland. Even Debenhams opened a homewares shop – albeit in the Middle East.

For those already struggling to turn a penny in the sector, this must have come as something of a headache. And the last thing they might have envisaged a year or so back would be that Ikea would move in on their city-centre territory as well.

Until this week, it was pretty easy to define what Ikea stood for in the UK. Very large sheds, located on the outer fringes of large metropolitan areas, with relatively easy access via motorways and a steady stream of cars looking for somewhere to park, whatever the time of day, seemed to characterise the retailer.

Times have changed, however, and from Sunday, anyone voluntarily choosing to pay a visit to Coventry will be rewarded with the chance to visit the world’s first in-town Ikea. The 258,340 sq ft (24,000 sq m) store has been quite a long time coming and there have been several false starts along the way – aborted planning permissions and rumours that the Swedish retailer would open an in-town store elsewhere among them.

Standing tall and proud
Nevertheless, here it is and store manager Richard Ansell looks proud and surprisingly hyped-up, given that he has been working on the project since January. Before that, he was manager at the Glasgow store, which opened in 2001.

Today, he is at the helm of a small piece of retail history. There is another multi-level Ikea store in the UK – in Ashton, near Manchester – but there is nothing on this scale and the Ashton store could hardly be described as central. Ansell is full of praise for Coventry City Council, whose good offices are responsible for allowing Ikea to move in in the first place. And Coventry is a vital pilot for the retailer. “We hope that, with this format, we can meet the needs of everyone by coming into the city centres, because getting planning permission on the edge of town is so difficult,” says Ansell.

But the question is, how can Ikea take its sprawling footprint, with the massive range that it carries, and pack the whole offer into a surface area roughly a third as big? The obvious answer is to build upwards rather than outwards – obvious until you consider that every other Ikea is fronted by a huge car park of almost equal magnitude.

The next solution is, again, simple in theory. Put a three-storey 850-space car park underneath a three-level store and you have the complete package. An enormous blue-sided monolith, with raked columns supporting an architectural growth protruding from one of its corners, is the outcome.

You can’t miss it, either. The sheer height of the building means that the yellow Ikea sign can be seen almost as soon as you exit Coventry station on the other side of the city centre. Closer in, there is a junction on the central ring road that is due to be renamed Ikea Plaza – a gesture of thanks from the city fathers.

As soon as you walk through the ground-floor entrance, you realise the challenges that Ansell and his 450-strong team have faced in the race to get the store up and running. Whether you arrive on foot – which, given the store’s position, is not unlikely – or by car, the only way is up, via a suite of lifts that take you straight to the showroom on the sixth floor.

Once you emerge from the lifts, you are in familiar Ikea territory. The floor is filled with bathroom, living room and kitchen roomsets. There are even “homes” – three of them intended, says Ansell, to show how the ranges can be used to create a complete domestic interior.

Everything looks as you might expect it to look in an Ikea branch – except that you happen to be six levels above ground on a 43,060 sq ft (4,000 sq m) floor. This is still big enough to get lost in, so Ikea has provided the usual racetrack, with shortcuts, to guide you through the space.

Ansell says that, because this is a city centre store, there is an expectation that one of the busy periods during weekdays will be lunchtime, “when shoppers maybe have only 45 minutes to spare”. To make sure that they get to the right place, he is instituting a “power hour”, when additional portable signage will be unfurled close to the shortcuts. This will be announced on the PA system and Ansell hopes it will solve the additional challenge that trading from a city centre will present. “It’s a customer convenience thing more than anything,” he says.

If you move down to the fifth floor, you arrive at the “marketplace” – another very recognisable part of Ikea’s format, with more visual merchandising tricks being played across the entire space, particularly in the lighting department.

It is worth noting the restaurant at this point. Seating close to 500 diners, who can all enjoy breakfast for less than a quid, the space affords a panoramic view of Coventry. Ansell is enthusiastic about this feature and, even allowing for the somewhat lacklustre appearance of the city’s downtown area, the view is impressive. You may be staring out at a shopping centre, a raised four-lane highway and a collection of tower blocks, but it is hard not to feel pleased that you are here.

The self-serve hall is on the next level down and things here are subtly different from other branches. In order to fit everything in, there are the usual high-sided bays – but they are double-sided, with a corridor between them so that they can be back-filled. There is also a system, known as a tornado, that operates like an outsize vending machine, enabling staff to call stock into the customer areas using a PC.

Because of the dynamics of moving stock upwards rather than along a horizontal plain, there has also been a great deal of investment in making the movement of merchandise straightforward. This involves an elaborate caged lift with a conveyor belt on each floor.

All of which equates to an expensive store-build. Ansell is coy when it comes to the price, but says that it “probably cost half as much again as normal”.

A lot of emphasis is placed on the self-serve and “full-serve” (where the stock is collected for you) areas within home delivery. Ansell says that this will be the cheapest branch in the UK from which you can have stock delivered to your home, partly a reflection of its city-centre location. It is all very green – and even the staff are being encouraged to cycle to work. Every “co-worker” was given a folding bicycle a couple of weeks ahead of the opening.

Other retailers will be making a beeline for this store, eager to see how Ikea has managed to fit two quarts into a pint pot. Even the management at the ill-starred Ilva – which only operates on retail parks – will probably be making the trip to Coventry to check this one out. All are likely to be worried – and they have good reason to be. This is a very good example of taking an existing format and changing things completely, while keeping them apparently the same.