On the afternoon of the 28th, at the first basement level of Times Square in Yeongdeungpo-gu, Seoul, the IKEA popup store was attracting visitors with its distinctive primary-colored letters and sculptures in blue, yellow, orange, and green at the entrance and inside the store. Most of the customers visiting the store were in their 20s and 30s.

At this popup store, a variety of small and relatively inexpensive home storage products such as baskets, cleaning supplies for bathrooms, kitchen items like cups, dishes, and some groceries were being sold. Due to space constraints, the unique IKEA showroom format, which displays products as if they were arranged in a real home, was not visible. Instead, large letters on the internal walls provided information on how to order through the IKEA application, by phone, and the nearby store (IKEA Gwangmyeong).

On the afternoon of the 28th, the appearance of the IKEA pop-up store located in Times Square, Yeongdeungpo, Seoul. /Courtesy of Jeong Jae-hun.

IKEA, a global furniture brand, is actively implementing a marketing strategy using popup stores as it marks its 11th year in South Korea. The plan aims to enhance customer accessibility and increase traffic to its online store by allowing visitors to experience the products directly.

IKEA opened its popup store at Times Square in Yeongdeungpo on the 25th. This popup store will operate until August 27. Alongside this, popup stores will also be operating until June at the Daejeon Hyundai Premium Outlet and until August at the Lotte Department Store in Gwangju. Notably, the Gwangju location marks IKEA's first entry into the Jeolla region.

Last year, IKEA also operated popup stores in six locations, including the Hyundai Seoul in Yeouido, Daejeon Shinsegae Art & Science, U-PLEX in Sinchon, Donggu Connect Hyundai in Busan, Daegu Junggu The Hyundai, and Yongsan I'Park Mall in Seoul. The operation of popup stores, which had only occurred once or twice a year from 2021 to 2023, has significantly increased recently.

On the 28th, at the IKEA pop-up store in Times Square, Yeongdeungpo, Seoul, there are messages on the internal wall guiding the IKEA app, phone orders, and nearby stores. /Courtesy of Jeong Jae-hun.

This type of popup marketing is interpreted as a strategy to increase touchpoints with customers. Until last year, IKEA had operated four large standalone stores, referred to as 'Blue Box', in the outskirts of metropolitan areas such as Gwangmyeong (opened in 2014), Goyang (opened in 2017), Giheung (opened in 2019), and Dongbusan (opened in 2020). However, the stores are largely concentrated in the metropolitan area, which has been criticized for its poor accessibility.

In April of this year, IKEA opened its first store in Seoul and the fifth store in South Korea, IKEA Gangdong, in the Godeok-dong area of Gangdong-gu, Seoul. This store was not in a standalone format but was located within a mixed-use shopping mall. Analysts suggest that this change in strategy stems from the poor performance seen in recent years.

IKEA Korea recorded its highest-ever results in the fiscal year 2021 (from September 2020 to August 2021), with sales of 687.2 billion won and an operating profit of 29.4 billion won. However, due to the impact of the COVID-19 pandemic and global economic downturn, it experienced a downturn in the following fiscal years, with sales of 622.3 billion won and operating profits of 21.9 billion won in fiscal year 2022, and sales of 600.7 billion won and operating profits of 2.6 billion won in fiscal year 2023. In fiscal year 2024, it saw a slight rebound, with sales of 625.8 billion won and operating profits of 18.6 billion won. Nevertheless, its sales figures have not yet reached the level of fiscal year 2020.

Graphic=Jeong Seo-hee

IKEA is focusing on an omni-channel strategy that connects online and offline rather than concentrating solely on physical stores to overcome its challenges. According to IKEA Korea, the percentage of online purchases in the home furnishing sector in South Korea reaches 52%, which is the highest level in the world.

A retail industry insider noted, "As online shopping becomes particularly active in the South Korean market, the number of individuals purchasing large and heavy furniture items directly from physical stores is gradually decreasing. IKEA has adjusted its market approach strategy accordingly."

IKEA is enhancing its online delivery competitiveness by introducing automated fulfillment systems in existing stores. Last year, it invested 16.9 billion won in its Giheung store to implement a robotic packaging system, with plans to sequentially apply it to other stores. IKEA aims to increase its delivery capacity for online orders by 1.5 times by 2030.

An official from IKEA Korea stated, "We are working to expand customer touchpoints so that more people can conveniently meet IKEA anytime and anywhere. The operation of popup stores is part of that effort," adding, "We plan to continue working to introduce popup stores in various regions."