I have to say it. I hate Big Box stores. I absolutely despise everything about them. The lighting. The parking lots. The architecture or lack thereof. The bleak warehouse look and feel. The people who shop there. I was dragged kicking and screaming into our local Costco once and once only, and immediately started hyperventilating. Yet, paradoxically, there is one Big Box I don’t mind going into, and that of course is IKEA.
I don’t think I’m the only Big Box-hater who loves IKEA. Why is this?
When The Globe and Mail recently took a closer look at why so many of us seem to enjoy shopping at IKEA, they uncovered four key ways that IKEA seduces us:
1. A fashionista runs the place
The national president of IKEA Canada is Kerri Molinaro, who was a young fashion retailer fresh from running iconic stores like Holt Renfrew and Birks before she was wooed to IKEA 18 years ago to help keep its hip edge. She told the G&M:
“It was a very big risk to hire me. But we are selling fashion. It requires merchandising, instead of just throwing things on pallets. The stores have to sing.”
Consumers can save money at IKEA, but they have to go to work themselves to get the savings. The G&M explains:
“Shoppers invest hours driving to the store, finding a parking spot, wandering the showroom, searching for staff, waiting at the cashier, hauling the flat-packs to the car and then, once home, mastering the art of the Allen key to assemble the stuff—only to discover that a part is missing.”
Even during the recession, privately held IKEA made gains globally, with sales rising 1.4% to $29.4 billion in 2009 at more than 300 stores in 35-plus countries. And fiscal 2010 is already looking promising. In the first six months, domestic business shot up by about 6%, Molinaro says, double her 3% forecast—and four times the industry sector’s growth.
2. They know what we want before we do
The sofa (or chesterfield if you’re a Canadian) was historically the anchor piece of the living room. But IKEA’s market research found that the television, which had typically been hidden in a corner, has been moving to centre stage over the years.
IKEA, like all other furniture makers, had been accustomed to designing very deep shelves to accommodate chunky television sets. But on the horizon in the early 2000s was a new style of extremely pricey flat-screen TV. According to The Globe and Mail:
“IKEA’s product developers made a prescient bet that flat-screen prices would steadily fall and consumers would embrace the sets. That planted the seed for what became the shallow-shelved Bestå (“long-lasting” in Swedish) media storage unit. In Canada, the price of 42-inch flat-screen TVs tumbled 85% between 2003 and 2009 to an average of $885. Meanwhile, the number of flat-panel TVs sold skyrocketed by more than 11,000% to 2.9 million in 2009.”
3. They keep it light and breezy
IKEA head office directs that products in all markets should be pitched with unpretentious advertising copy, written with “a twinkle in the eye.” A marketing manual says: “There are more important things in the world than IKEA home furnishings.” And who doesn’t love that IKEA “Start the car!” television commercial with the alarmed shopper trying to make a quick getaway with what she assumes must be a mistakenly low sales receipt? Part of the genius of IKEA’s marketing style is its ability to keep the company’s halo of Nordic cool firmly in place. Although it has been criticized for the usual sins of globalization, IKEA dulls the attack by refraining from the hard sell or taking itself too seriously. So there’s no Walmart-type stigma to prevent conscientious consumers from making the journey to IKEA. As Daniel Lucht, a senior consultant at market researcher Verdict Research in London, told the G&M:
“At the end of the day, we still need furniture.”
White or light-hued furniture tends to be popular in Europe because living space is at a premium; light colours of pale native woods like birch or beech make rooms look larger. In North America, where homes are more spacious, a black-brown finish is in high demand. So the company has learned to keep things on the light side in one market, and on the dark in the other.
4. They trap us in that damn maze
Unusual shopping perks like a supervised kids’ play area and impossibly cheap cafeteria specials (Swedish meatballs: $2.99!) keep customers in the store longer. Shoppers spend an average of two hours trekking through an IKEA, which is roughly the size of six football fields; in contrast, customers spend less than half that time grocery shopping. More than half of the people who visit IKEA make a purchase, Molinaro told The Globe and Mail. In her old milieu of high end retail boutiques, only about 8% of shoppers actually become buyers.
To encourage impulse purchases, IKEA places more bins filled with products near the main aisles. As shoppers enter an IKEA store on the main floor, they move through five different room settings where key products are featured in these rooms.
Store appearance is crucial at IKEA, not just for its upscale drive but also at a more foundational level: IKEA has a leaner complement of sales staff than many other retailers. About 30% of the 400 employees in each store are in sales; the rest work in areas such as display and warehousing. The average clothing store in Canada, meanwhile, employs almost twice that proportion of sales staff.
Not bad for a relatively new retailer founded in 1943 by 17-year-old Ingvar Kamprad in Sweden. The company is named IKEA as an acronym comprising the initials of the founder’s name (Ingvar Kamprad), the farm where he grew up (Elmtaryd), and his home parish (Agunnaryd, in Småland, South Sweden).
Read the rest of The Globe and Mail’s May 2010 article about IKEA.
IKEA: do you love it or hate it?