Ikea’s Web App Brings Interior Design to Soviet-Era Apartments

(Bloomberg Businessweek) -- Ikea has been diversifying its business model as fewer consumers trek to the big-box suburban showrooms that helped turn it into a furniture giant. In Russia, it found a way to replicate part of that shopping experience on the web—thanks to a preference for uniformity among Soviet city planners.

About 60% of Russians live in standard, Soviet-era apartment blocks, which have a limited number of designs and floor plans. Ikea has replicated the layouts on its Russian website and given them virtual makeovers, allowing a customer to select suggested items and furnish her entire apartment with a few clicks of the mouse.

The service, called Kvartiroteka—“selection of apartments” in Russian—has brought 2.8 million visitors to Ikea’s site since the launch last June, most of them new customers, and contributed to a 17% jump in sales in Russia in the fiscal year that ended in August. The country is Ikea’s fastest-growing market behind Hungary, and the company is considering whether to expand the offering to places with similar communist-era housing stock, including Germany, Poland, and China.

“Many people couldn’t believe that they could do anything good out of this standard typical planning,” says Pontus Erntell, head of Ikea’s Russia business. “The idea was to show that there can be lots of different things to do and to inspire people to do something to change their lives in their homes.”

The Swedish furniture giant is trying to remain the world’s top furniture retailer without relying so much on its roughly 30,000-square-meter (323,000-square-foot) blue-and-yellow stores, where customers fuel up on Swedish meatballs before navigating a maze of showrooms and a self-service warehouse. Although the traditional stores still account for about 90% of Ikea sales worldwide, foot traffic has stagnated in recent years as more young people move into urban areas, drive less, and buy more things online. The company has set up smaller outlets in cities and expanded its e-commerce platform to fight aggressive online rivals such as Wayfair Inc. and Amazon.com Inc. “Almost all retail is moving to have greater digital engagement, and those who do not follow are likely to be left a long way behind,” says Charles Allen, senior retail industry analyst at Bloomberg Intelligence. “Ikea was slightly late but is making a lot of investment to catch up.”

The Kvartiroteka service offers a choice of designs for common apartment layouts in 14 types of buildings. One suggested layout for a family home shows a children’s room adapted for sharing by two kids of different ages. A curtain divides the room in two and displays recommended wardrobes, chests of drawers, and mounted shelving units that fit well in the space. In the hallway, shelves under the ceiling save space, and there are hooks on the wall for hanging skateboards.

When Victoria Sanina wanted to renovate her standard 12-square-meter bedroom last fall, she drew inspiration using Kvartiroteka. The 28-year-old graphic designer lives in Chelyabinsk in the Ural Mountains, far from any of Ikea’s 14 big-box stores in Russia. She found an image with nightstands attached to the wall instead of standing on the floor. “I thought that’s elegant and things won’t get lost behind them,” she says. “I ordered them online with light fittings that turn them into sources of light in the room.” Sanina says her aunt, who lives in a typical five-floor block known as the 1-335 series, is considering a ready-made Ikea design to renovate her entire apartment.

Residents of Moscow, St. Petersburg, and Tyumen who use Kvartiroteka have the option to seek further advice from a consultant at one of five smaller stores, which Ikea calls “design studios,” in the cities’ centers. The smaller stores may help keep people like Veronika Sumina shopping at Ikea. The 31-year-old financier, on maternity leave in Moscow, remembers when going to one of the superstores was a big event. “You could have spent half a day there—looking at the interiors, sitting down on a sofa and taking a photo, eating Swedish meatballs and shopping,” she says. “Now it’s not comfortable for me anymore to go a large Ikea store and spend a lot of time there navigating with a baby carriage.” —With Hanna Hoikkala

To contact the editor responsible for this story: Eric Gelman at egelman3@bloomberg.net, Rebecca PentyAnne Pollak

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