The Ikea Effect

[spuwho]

Much was made this AM on WOKV on the "Ikea effect", where the landing of an Ikea has impacts post open.

So what other businesses do you think will follow and build in Jacksonville?

Will they come because of Ikea, or will others just come?

Syndicated radio host Clark Howard came on the air (he lives in Jax Beach) and noted that other "big box" retailers will take note. Especially ones that appeal to any underserved markets in greater NE Florida.

His first mention was either a Fry's Electronics or MicroCenter. Clark said this a large underserved market in Jacksonville in general for these types of retail.

A friend who sells furniture thinks there will be a migration of furniture stores and outlets to the Gate/295 area to get "halo" business from those who make the drive to Ikea.

[thelakelander]

I don't think IKEA has had much of an impact in pulling retail around it in Tampa. That area is still heavily industrial.

[InnerCityPressure]

I was just at the Tampa Ikea and thought the same thing.  It is isolated.  I guess Ybor is down the street, so they just assume the traffic will head there after furniture shopping?  It seems like there is literally NO Ikea effect.

[David]

I want to say I'm happy we're getting an IKEA and it is a great store, but some are making it sound like we're getting another Superbowl or that Jesus is coming. (at least that's how the Superbowl sounded back in the early 2000's )

The Jacksonville Business Journal has a quote from the chamber of commerce saying it's making us an " international city" heh...ok. It's a great regional store that will surely attract people from around NE FL and SE GA. But i'm not expecting us to host the world Olympics because of it. 

I'd say it makes us a top 40 U.S. city. That is how many locations they have in the states already, 42 to be exact.

[spuwho]

I dont think Ikea is the second coming but it is true that retail tends to follow in clusters.

When one major chain makes a commitment to a market, competitors or associated/related chains take notice.

Also many chains use common suppliers and logistics, so when a leader makes a commitment, they sometimes piggyback on the lower cost of entry to get into the market because someone else has done trail blazing.

Walmart has consistently complained that Target leverages Walmarts superior site placement analytics and simply follws them everywhere.

So while Ikea may not attract other retail in proximity to their physical location, they may enter the regional market because of logistical enhancements.

[jaxdan3]

Core Property Capital and Preferred Growth Properties have already announced plans for new developments near the SJTC.  Red Robin has been the only rumored tenet so far but I'm thinking Trader Joe's is a safe bet too.

[David]

I dont think Ikea is the second coming but it is true that retail tends to follow in clusters.

When one major chain makes a commitment to a market, competitors or associated/related chains take notice.

Also many chains use common suppliers and logistics, so when a leader makes a commitment, they sometimes piggyback on the lower cost of entry to get into the market because someone else has done trail blazing.

Walmart has consistently complained that Target leverages Walmarts superior site placement analytics and simply follws them everywhere.

So while Ikea may not attract other retail in proximity to their physical location, they may enter the regional market because of logistical enhancements.

Well said. IKEA has a cult-like following that I'm probably underestimating.

[David]

@Jaxdan3: Red Robin would be awesome, considering they've been taunting us with their commercials for years in the Jacksonville area, yet the closest store is in Gainesville.

[CityLife]

Core Property Capital and Preferred Growth Properties have already announced plans for new developments near the SJTC.  Red Robin has been the only rumored tenet so far but I'm thinking Trader Joe's is a safe bet too.

Given what I heard about Trader Joe's NE Fla strategy when they first came to Jax Beach a few years ago, I don't think SJTC was part of their plan, but perhaps things have changed. The 295 corridor and Nocatee have certainly developed more rapidly than expected, so who knows.

University and San Jose is where I would speculate TJ's next Jax location will be.

[jaxdan3]

Yeah Trader Joe's is just a guess, the Core Property Capital site plan shows a grocery store: http://properties.theshoppingcentergroup.com/property/output/document/view/id:6848/?time=1445030743/ but the store on the site plan looks too big to be a Trader Joe's.  If you've seen their new distribution center on I-95 near Daytona it looks like they have big plans for Florida.

[jaxdan3]

Core Property Capital and Preferred Growth Properties have already announced plans for new developments near the SJTC.  Red Robin has been the only rumored tenet so far but I'm thinking Trader Joe's is a safe bet too.

Given what I heard about Trader Joe's NE Fla strategy when they first came to Jax Beach a few years ago, I don't think SJTC was part of their plan, but perhaps things have changed. The 295 corridor and Nocatee have certainly developed more rapidly than expected, so who knows.

University and San Jose is where I would speculate TJ's next Jax location will be.

The brochure for the redevelopment of the Mandarin South Shopping Center shows a specialty grocery store but it's also way too big to be a Trader Joe's. 

http://pgpcompanies.com/pdfs/Jacksonville.pdf

[KenFSU]

Also many chains use common suppliers and logistics, so when a leader makes a commitment, they sometimes piggyback on the lower cost of entry to get into the market because someone else has done trail blazing.

Walmart has consistently complained that Target leverages Walmarts superior site placement analytics and simply follws them everywhere.

So while Ikea may not attract other retail in proximity to their physical location, they may enter the regional market because of logistical enhancements.

Really solid information, thanks for sharing!

[finehoe]

I don't think IKEA has had much of an impact in pulling retail around it in Tampa.

It has in Woodbridge, VA:

[Adam White]

I don't think IKEA has had much of an impact in pulling retail around it in Tampa.

It has in Woodbridge, VA:

I'm not so sure about that. Yes, there is a lot of retail, but that is likely due to the presence of Potomac Mills mall (which did feature an IKEA when it opened). It may be that IKEA has led to the growth, but I think it would be hard to say it was solely due to IKEA.

[thelakelander]

Yes, it's a big stretch to associate all retail in that area of Northern Virginia with IKEA.