IKEA: the customer experience strategy

IKEA is a famous furniture brand all other the world. Behind this success story we can find a proven management strategy…

The key of success: IKEA’s competitive advantages

Since the beginning IKEA found the key recipe in order to differentiate itself from its competitors: one of the main competitive advantages of the brand in the 1970s was the innovative concept of self-assembly. This characteristic is now at the heart of IKEA’s identity.

Another distinctive feature of IKEA’s strategy is that the products were displayed in a store and the customers could pick them up by themselves directly in the warehouse.

Learning from the mistakes

In a first place IKEA started its expansion in Europe by only transferring its concept and products. However this transfer strategy did not work on the American market: this particular market required adaptations. Therefore, the sizes of the products did not fit (for example size of the sheets not adapted to the size of the American beds). In addition, the products were shipped from Europe, therefore this made the prices increase even more compared to the products IKEA sold in Europe and it was hard for the brand to compete with cheaper local competitors.

IKEA learnt from its mistakes on the American market and made great modifications in its transfer/adaptation strategies. Nowadays IKEA perfectly uses this strategy like for example in China by opening a “balconies section”, a characteristic of the Chinese houses.

Moreover, in order to get back on its foot after the failure in the USA, the brand decided to communicate more with its target market: the young generation, interested in innovation.

The customer experience: biggest strength  of the group

IKEA is not a traditional furniture store. Indeed, the brand offers a great variety of products, such as decoration products, kitchen utensils, pets accessories… everything is designed to satisfy the entire family. The design of the stores is very important as well. Indeed, the shop is designed like a “maze” in order to get the customers to go through all the sections and make impulsive purchases. IKEA also offers a great customer experience in store with the restaurant, playgrounds for the kids and a Swedish grocery store we can find in every IKEA store. IKEA knew how to transform the traditional shopping trip into a fun experience for the whole family. This characteristic is at the basis of its strong brand identity all over the world.

The family of IKEA’s “co-workers”

IKEA also highlights the fact that the “co-workers” of the group are like a family, the hierarchy is invisible and all the employees are working together by putting the customer at the center of their work. The strong corporate identity of IKEA is also part of the current success and strategies of the group. It is common to find in store giant posters introducing some of the IKEA co-workers, from the designers to the sales assistants.

And the future…

As Ingvar Kamprad, the founder of the group is at the center of the IKEA business and the development of its strong identity, we can wonder if someone will have enough power decision and enough knowledge of the brand to take over from him after his death. The position of Kamprad can make us thinks about the relation between Steve Jobs and Apple for example, and we can wonder about the future of the company.

References:
- "Furnishing the World", The Economist, November, 19th 1995
- "Flat Pack Accounting", The Economist, MAY, 13th 2006