Posts Tagged 'IKEA'

Reflecting on the impact of IKEA

Most of the obituaries of IKEA’s recently deceased founder focused on his background, but RetailWire panelists reflected instead on what the store’s operating model has meant to the world of retail. Here are my thoughts on IKEA’s impact and the store experience:

IKEA revolutionized furniture and home furnishings retailing in several ways. It developed a low-cost operating and sourcing culture that passed along savings to its customers, developing an almost cult-like global reputation in the process. For all the jokes about the difficulty of assembling IKEA furniture, there is no doubt that millions of customers own home furnishings of decent quality that would once have been out of reach.

As to the in-store experience, I shopped the IKEA at the Mall of America last summer and it seemed noticeably easier to navigate than I remembered. (And yet I worked my way through the entire store.) Maybe IKEA has taken seriously the critique that its shoppers are like lab mice lost in a maze.

And yes to the meatballs…but don’t miss the lingonberry preserves near the checkout lanes!

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Why would IKEA sell its goods on Amazon?

RetailWire panelists engaged in some speculation that IKEA may begin expanding its e-commerce footprint, including selling some of its products on the Amazon Marketplace. Here’s my rationale for the possible decision:

IKEA continues to open physical stores at a very deliberate pace. Here in the Milwaukee area, they are finally breaking ground this month for a store announced last year and opening in 2018 — their first in the market. Yet IKEA has broad name recognition and brand equity among potential customers who don’t live anywhere near one of their stores. Why not expand their e-commerce footprint, especially if the sales data uncovers potential new markets or localized changes in merchandise mix?

Another frontier for Amazon to cross?

Amazon is reportedly scaling up its infrastructure in order to tackle the major appliance and furniture markets. Panelists weighed in on RetailWire about the challenges and opportunities, and I see the upside:

I commented a couple of weeks ago that Amazon had not yet made big inroads into the major appliance market — but obviously they are headed in this direction, along with furniture. To some degree IKEA has already figured out how to generate furniture sales not tied to its showrooms, so it’s clearly an opportunity for Amazon too. No doubt that they will figure out the logistics of bulky products but this still seems like a business where customers want to “kick the tires” — so perhaps Amazon ought to test showrooms in their early test markets.

Brand awareness for Uniqlo: Is a web presence enough?

From a recent RetailWire discussion: The issue is whether Uniqlo (the Japanese “fast fashion” retailer) can establish a beachhead in the U.S. through its website rather than a more aggressive bricks-and-mortar expansion. Here’s my opinion, with some added comments below:

Zara, H & M and even Ikea are great examples of foreign retailers (not necessarily apparel stores) who leveraged both e-commerce and bricks-and-mortar growth to build awareness and a strong U.S. presence. There is some natural synergy between channels that Uniqlo would be smart to learn from. Simply building a web business without opening some tangible “flagship” stores in key markets probably isn’t enough by itself to drive the brand.

Just to add a note: I visited the Uniqlo store on 34th Street in Manhattan last week (one of three New York locations) and the store is stunning. Great presentation, depth of fashion and basic inventory at compelling price points. I don’t think a web presence alone can communicate what’s special about this store, although operating in a smaller footprint (as H&M has learned to do) will be a challenge.

IKEA tests a “man-cave”

RetailWire panelists recently talked about a new concept being tested in some IKEA stores: A “men’s lounge” complete with TV’s and other diversions, to be used while the female partner wanders the store. The idea has plenty of “legs,” in my opinion:

This is an idea that would work not only in other IKEA stores but in all sorts of retail settings. In fact, the traditional regional mall typically has a female-centric tenant mix and could use a similar idea. Just providing a seating area (as many malls do) is a courtesy but not an incentive to extend the shopping trip. Let’s see if an enterprising mall developer follows suit.


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