When IKEA arrived in America, it was already internationally successful business, and it continues to expand. Within this essay, IKEA’s journey to the United States will be discussed, including their initial feedback from their pilot store in Philadelphia and how they addressed these issues. Moreover, their imaginative sales and marketing tactics are discussed, which contributed to their growth in the United States, as well as their efforts to familiarize consumers with the IKEA way of shopping. Their journey to keep prices down while becoming a trendsetter in home decorating for the middle class will be explained. The discussion will conclude with IKEA’s influence in America and why they have been so successful in the United States and well beyond its borders.
According to Moon (2004), IKEA arrived in America with its first store opening in Philadelphia in 1985. At the time, the store was not met with enthusiasm and had to overcome some cultural obstacles. Some of the common customer complaints were the following: everything was in centimeters, the sofas were not soft enough, the furniture was ugly, and the kitchen items reflected European serving standards rather than the larger portions of American standards.
IKEA learned from the feedback from their satellite store and began campaigns aimed directly at the heart of the consumer motivations of Americans. Moon (2004) explained IKEA sought to bring worldwide appeal to their products. IKEA began to look at the world and the latest trends in home decorating. They improved the look and feel of their products line while keeping ever vigilant about keeping supply lines of product manufacturing and delivery of products costs to a minimum. The upgrade to their product line is what brought the numbers up in their American stores ten years later.
IKEA also launched very successful marketing campaigns, according to Moon (2004). Another obstacle is Americans are known for keeping their furniture for a lifetime and are unwilling to change their décor. In the mid-1980s, a campaign of commercials directed by Spike Jonz, the same director for Being John Malkovich, called “Unboring” was aimed at poking fun of Americans’ unwillingness to try something new and let go of the old, especially in their houses (Businessweek, 2005). One of the commercials, titled Lamp, showed a forlorn lamp on a sidewalk and stated that Americans feel bad for the lamp because Americans are crazy. This award-winning series of commercials raised IKEA’s profile in America.
Moreover, stated Bloomberg Business Week (2005), IKEA launches innovative and creative marketing campaigns for store openings. One man reportedly camped outside of the doors of IKEA for seven days in the hot summer weather to be the first person in the store once it opened its doors and won $2000 in furniture and household items. IKEA’s ability to capitalize on super effective public relation and marketing campaigns played a big part of its continued successes here in the United States and contributed to its growth.
From these initial efforts, IKEA began to create an image of its customer base, aligning their products with people who view themselves as travelers of the world, trendsetters, eclectic, high-minded individuals, according to Moon (2004). They also offset their low prices as an advantage for the middle class, bringing them the latest worldwide trends at a low cost.
Another way IKEA differentiated itself from other low-cost furniture retailers such as Walmart, stated Bloomberg Businessweek Magazine (2005), was by orienting consumers with the IKEA shopping experience and its innovative approach to selling furniture and housewares that translate into cost savings for the consumer. The customer is oriented from the moment they walk into the massive IKEA stores, with suggestions on how to shop at IKEA, and materials such as pens, papers, measuring tapes, and strollers for toddlers are provided for customers in the front. They can check their children into the play place so parents can shop at their leisure. The stores are designed to bring the customer through the entire store, so each customer sees every single item of the thousands of choices they have for sale in every area of the home. In the middle of the store is an IKEA owned restaurant, allowing customers to shop at their leisure and encouraging customers to stay in their stores for longer periods of time. For bigger items, customers get a self-service cart and pick up their furniture at the “warehouse” section, where all items are kept in their flat-packed boxes, a special manufacturing feature of IKEA stores that keeps shipping costs to a minimum and bring their items to the cash register. The consumer transports their own products and assembles them at home. The savings in shipping due to the flat-packed boxes and the ability for people to bring their own items home and assemble them translate into savings to the consumer.
IKEA has a unique internal process as well to cut costs and bring the best of product design and innovation, described Moon (2004). IKEA has an internal bidding process for all manufacturing and product design of their products, as well as a well-integrated web of worldwide suppliers for the materials for their products. This process ensures that they are always obtaining the best designs at the best prices. Moreover, IKEA has a sophisticated worldwide network of suppliers for their materials, another key element of their success.
IKEA’s business model has been studied at top business schools for the last two decades and with good reason. IKEA has a long list of innovations in operations management, marketing campaigns, and trendsetting in fashion that is unsurpassed by any other furniture retailer around the world. As long as IKEA continues to trend set in the industry, its worldwide success will be realized for years to come.
Bloomberg Businessweek Magazine (2005). IKEA. Retrieved from http://www.businessweek.com/stories/2005-11-13/ikea
Moon, Y. (2004). IKEA invades america. Harvard Business School, 501-904. Retrieved from http://www.expert2business.com/itson/Articles/IKEA.pdf