Ikea puts Oak Creek on map as a regional retail destination
Paul Gores
The hundreds of shoppers who streamed into the Ikea store in Oak Creek for its grand opening Wednesday — and the estimated 1 million who’ll visit each year — serve as strong evidence that in an age when some large retailers are struggling, Ikea has figured out how to give many consumers the kind of shopping experience they want, industry experts say.
At the same time, Oak Creek city officials say the coming waves of Ikea shoppers to West Drexel Avenue just off of I-94 also are likely to serve as a boon to existing restaurants and other businesses nearby, as well as an impetus for further development of 150 acres in Ikea’s neighborhood.
As Ikea opened its mammoth 290,000-square-foot blue-and-yellow building at 9 a.m. Wednesday, this much was certain: South suburban Oak Creek officially is on the map as a statewide retail destination, and Ikea and city leaders couldn’t be happier about it.
“We’re ready to rock and roll,” said store manager Samantha Gravina.
The Swedish-themed, assemble-it-yourself retailer, which has no shortage of Wisconsin devotees even though this is the state’s first store, is known for providing shopping that, in addition to offering an enormous array of merchandise to solve home furnishing, decorating and kitchen issues, also can be flat-out enjoyable.
RELATED:Assemble-it-yourself furniture and Swedish meatballs: Wisconsin, Ikea is here
“They’ve put together all the elements that create that great experience, and make it fun,” said retail consultant Anne Brouwer.
Among those elements: 50 sample room settings that offer customers ideas on how to use Ikea furniture, furnishings of a consistent quality, kitchen items and gadgets galore, a supervised area for smaller kids and a bright 300-seat restaurant where Swedish meatballs and other fare is served.
Ikea gives customers maps, tape measures, pencils and pads of paper to help them navigate the store and take note of what they want to buy. Employees are available and helpful.
Fertile market
Ikea has known for years it has a strong customer base in Wisconsin. The company could tell, in part, by the quantity of state residents who have been traveling to one of its biggest U.S. stores — a 450,000-square-foot facility in the Chicago suburb of Schaumburg, Ill. — to shop Ikea.
Even before ground officially was broken for the Oak Creek store last summer, Ikea had determined it had more than 206,000 known customers in the metro Milwaukee area alone.
For many shoppers, Ikea is a magnet — a place people will migrate to from many miles away and then stay, on average, two to three hours.
How does Ikea do it?
“It’s being brilliant on the basics,” said retail industry consultant Bob Phibbs. “It’s what retail was born on — being a great merchant, knowing your customer, having the right location and using data to expand slowly so you don’t make the stupid mistake of suddenly realizing there was no demand for your product in a new location.”
The Oak Creek Ikea is only the company’s 48th location in the U.S., so when the company finds a place it wants to be, it’s a big deal.
“They’re very careful in selecting the site, and they know they’ve got a core built-in target audience,” said Brouwer, a partner with McMillanDoolittle in Chicago. “They’re going to be very strategic. They don’t need 300 of these stores in this country. These stores are big. They’re meant to generate a lot of revenue in that location.”
Phibbs said Ikea also has taken care to make sure its employees are well-trained and helpful.
“You don’t hear about Ikea closing Ikeas. You don’t hear stories about them cutting back on their training. You don’t hear stories about them having locations with problems. They are able to control that entire environment, and people are willing to pay for it,” Phibbs said.
Over the years, Ikea has been a surefire spot for college students needing to inexpensively furnish an apartment, giving them their first exposure to the retailer. But it doesn’t end there for many.
“Millennials are incredibly frugal, but they’re also stylish,” said Phibbs, owner of New York-based The Retail Doctor. “They can get a sense that it’s cool furniture without going to Restoration Hardware.”
It’s not only young adults, however, who are fans of Ikea. The company is very welcoming to families with children of just about any age, and even has a supervised area at the front of the store where kids can play while parents shop.
Ikea is the kind place where, if a homeowner needs to furnish a room or even a whole house, he or she might come to the store with a trailer and haul away easy-to-pack flat boxes of furniture to assemble at home.
That solves what Brouwer called the “instant gratification” issue that many furniture stores have because customers at other stores have to wait weeks for delivery.
Maps or arrows on the floor direct shoppers through the store, making sure they start at room settings that display the merchandise and supply design and decorating ideas.
“There’s likely to be something there for you, and they put it together with plenty of information and helpful people," Brouwer said. "It’s a fun environment. It’s not a slog-through. It doesn’t look like a row of recliners and, ‘Which one do I like?’ It’s giving you inspiration and ideas. This is not meant to be just a purely transactional situation. It’s come and have fun, and part of that is the culture. It is meant to be that kind of engaging experience.”
Oh, and the food
Not too far into the store journey is the restaurant, where visitors can buy a hearty $2 breakfast or full plates of Swedish meatballs or salmon.
Sweden-founded, Netherlands-based Ikea, which has 417 stores in 49 countries overall, said it sells 1 billion meatballs annually.
RELATED:New IKEA store has lots of sofas, linens, rugs — and groceries
While Ikea is glad to feed consumers on site, the presence of the store probably will increase business at restaurants just down West Drexel Avenue at Oak Creek’s large-and-growing Drexel Town Square area, which includes eateries such as Water Street Brewery, Cubanitas, Pizza Man, Bel Air Cantina, Five Guys Burgers and Fries, Potbelly Sandwich Shop, The Chocolate Factory, Valentine Cafe and Chick-fil-A.
RELATED:Restaurants are thriving at Drexel Town Square
“With a million visitors a year, there’s a lot of potential to generate business for other people also,” said Oak Creek Mayor Dan Bukiewicz.
Bukiewicz said the presence of Ikea is spurring interest in additional development nearby in his suburb of 36,000.
“For sure,” he said. “They’re already bouncing ideas off us as to what we want to do. We do have a comprehensive plan in place for what we’d like to see. There’s another 150 acres to develop in that particular area, and we want to do it strategically to make sure it’s good for not only for Ikea, but the residents of Oak Creek and our vision for the city.”
Ikea has looked for a good spot for a store in Wisconsin for years, but Oak Creek moved to the head of the line when city officials came up with the $5 million local cost of having a brand new freeway interchange built at West Drexel Avenue while I-94 was being reconstructed.
“By putting that it in, it raised all boats,” Bukiewicz said. “It made Drexel Town Square marketable. It let us redefine our downtown as well as have the anchors of Meijer and Water Street come in and generate a whole new vibe within Oak Creek. It gave us walkability, kind of that Third Ward feel. But more importantly, it made everything west going to 27th Street completely marketable. Rather than farm fields, all of a sudden the city had loads of options as to what to do to with future building, tax bases and revenue generators to help us sustain services.”
Milwaukee’s Northwestern Mutual Life Insurance Co. operates a large campus in nearby Franklin. The insurance company, which sold the land to Ikea and still owns land around the store, also has said it is looking forward to further development.
How much new retail development will follow is up for debate.
“Retail is a tricky business,” Bukiewicz said.
Especially right now, with the growth of online retailers such as Amazon and consumers’ penchants to make fewer trips to retail shopping centers.
But Ikea is different. The fact that nobody has truly successfully cloned Ikea’s format shows how well Ikea has perfected what it does, said Phibbs.
“At Ikea there’s an awful lot of elements that people understand make up their brand, whereas Toys R Us, Bon-Ton, Claire’s — a lot of other ones — never really had that,” Phibbs said.
Phibbs added that successful retailers don’t take their employees and customers for granted. At Ikea, he said, “They really believe a culture centered around customers starts with your employees.”
“When people feel that they matter, they’re going to sell more, and that means the shopper is going to buy more,” Phibbs said.
Said Brouwer: “Ikea is really hitting on all cylinders.”