IKEA begins making house calls

IKEA, which recently celebrated the thirtieth anniversary of its first U.S. store in Plymouth Meeting, PA, wants to get to know its American customers even better. Management is so serious about the effort that, beyond simply looking at past purchasing history, it plans to send representatives directly to customers’ homes to see how they live.





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The goal behind the program is to learn the needs of consumers in local markets so IKEA can offer products that more directly address their needs.

"It’s about understanding how life is spent," Lars Petersson, president of IKEA U.S., told USA Today.

In-home visits are just part of IKEA’s plan to further grow its business in the U.S., which now represents 12 percent of its total worldwide sales.

In a press release to mark its anniversary in the U.S., Mr. Petersson said, "We want to be accessible to more Americans in the future by opening new stores, improving existing stores, developing our service offer, and growing our e-commerce business."

[Image: IKEA celebrates]

One of the keys to IKEA’s success has been its ability to hold the line on prices. Today, the company actually charges less for some of the same items it sold when it first opened for business.

Another key has been the company’s commitment to environmental issues. It was the first major U.S. retailer to discontinue the use of plastic bags (2008) and it will only sell LED lights beginning in the fall of 2016.

BrainTrust

"IKEA wants to come in my house to see how I live? Seriously? Not going to happen. Send me a survey."

Ed Rosenbaum

CEO, The Customer Service Rainmaker, Rainmaker Solutions


"Going into people’s homes shouldn’t be something that garners national press, it’s something any home goods store should do often to understand how people are living and how their products do (or might) fit into their lives. But it’s one view on a much larger research lens."

Laura Davis

Founder, Branded Ground


"IKEA is the fast food of furniture: easy menus, higher level of self-serve, low prices, quick and convenient. They understand market segmentation, and cater to different needs than traditional furniture stores. More localized and personalized will always work better, provided they don’t mess with the core formula that has underpinned their success."

Alexander Rink

CEO, 360pi


Discussion Questions

What do you see as the primary reasons for IKEA’s success in the U.S.? Will a more localized approach help the chain to grow its share of the U.S. furniture market?

Poll

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Max Goldberg
Max Goldberg
8 years ago

Furniture is too expensive. IKEA offered, and still offers, a reasonable alternative to traditional furniture stores. IKEA goes further by filling its stores with practical gadgets and tools that help consumers in their everyday lives.

To grow its market share IKEA should make it easier to go in, find what you want and get out of the stores. It takes too much time to shop IKEA. Yes, the racetrack format exposes customers to more products and gets them to make impulse purchases, but it takes too long.

Ed Rosenbaum
Ed Rosenbaum
8 years ago

IKEA wants to come in my house to see how I live? Seriously? Not going to happen. Send me a survey.

Lee Kent
Lee Kent
8 years ago

When you are raising 5 little girls, there are tricks one must learn and my mother was the queen. The most important lesson she taught us was, “Girls, there are the good pieces and then there are the ‘get away with it’ pieces. That is how you stretch your budget.”

Well, that is exactly what IKEA is. “Get away with it” pieces. Their products look good, are easy to put together, stand the test of time, and fit the pocket-book. If they want to continue to succeed, they should stay true to this core.

Not a bad idea to explore locally and determine the right or new products that might appeal to customers. But, IKEA, I agree with Max, don’t make it an all day event to shop your stores. PLEASE! I would go more often if it weren’t for that.

That’s my 2 cents.

Gordon Arnold
Gordon Arnold
8 years ago

Using experts to investigate and identify areas of opportunity which are unique to the area is more expensive than hiring a market research company and buying a “guesstimate.” This will give them first hand, highly reliable customer and prospect wants and needs. We will soon see how well they are prepared to perform the task ahead. In any case, the followup on this will be most interesting and enlightening for retailers.

Laura Davis-Taylor
Laura Davis-Taylor
8 years ago

Going into people’s homes shouldn’t be something that garners national press, it’s something any home goods store should do often to understand how people are living and how their products do (or might) fit into their lives. But it’s one view on a much larger research lens.

I watched the video and it’s a great story very compelling PR. But these folks have had IKEA as their 100% go-to because it’s free to them. My gut is that most people buy tons of IKEA when they are young and financially constrained but as they get older, they start buying high quality “anchor” pieces elsewhere. Then, IKEA become more of a place for peripheral accessories and “design refresh” pieces. Just a gut, but if it’s right, they should be looking more at how IKEA fits into lives across life stages and how to manage selling and retaining people accordingly.

Roger Saunders
Roger Saunders
8 years ago

IKEA will grow their business as they continue to roll out stores, and add to their localization points. The reasons behind the run to success, based on the Prosper Monthly Consumer Surveys, follow leading factors of price, selection, and quality in the minds of 6,000+ adults, 18+.

Among IKEA’s core customers, those points are markedly higher than adults who shop other Furniture Stores — 81.0% of IKEA shoppers mention price vs, 60.3% for other retailers (+34.3% edge); 67.8% mention selection for IKEA, while only 50.2% mention that valued reason at other furniture stores, a +35% advantage for IKEA. Quality was registered by 43.1% of IKEA shoppers, while 40.8% held quality high at their favorite furniture stores.

IKEA provides other leading reasons as to why consumers should enter their labyrinth. In-store experience, decorating ideas/service, newest styles, and newest fabrics show up highly, as well. IKEA shoppers see their choice of store as a “Highly Trusted Retailer,” and they appreciate the ease of use in navigating the website/mobile site that IKEA offers.

This all rolls up to greater loyalty. Furniture stores, which other than numerous local independent operators, have had difficulty in building scale. In the process, measures like Net Promoter Scores for furniture stores average -5.5%. In the case of IKEA, their shoppers provide them with a positive +16.42%, well above the industry standard.

The prize ahead for IKEA lies in the fact that they are crushing the married millennial segment—their rating among this group is twice as high as their nearest competitor.

Alexander Rink
Alexander Rink
8 years ago

IKEA is the fast food of furniture: easy menus, higher level of self-serve, low prices, quick and convenient. They understand market segmentation, and cater to different needs than traditional furniture stores. More localized and personalized will always work better, provided they don’t mess with the core formula that has underpinned their success.