Australia has been keen on welcoming the big-box retailers lately, and IKEA is the latest entry, with the company opening its second Melbourne location in the suburb of Springvale this morning.
The store, which had been rumoured for quite some time before the business confirmed the location last year, is the city’s second location along with the existing store in Richmond, and is about 50% bigger.
Those shoppers who head down will end up walking about two kilometres if they travel through the entire store – a testament to the unique way in which Ikea lays out its products.
The launch not only highlights the growing attraction of big box retailers such as Costco and hardware chain Master’s, but also how thrifty consumers are becoming. Cheap, DIY alternatives such as those provided by Ikea are set to experience a steady rise in spending over the next few years, experts have predicted.
Here are 10 lessons for SMEs on how Ikea runs its business.
One of the most iconic aspects of an Ikea store is the layout of each product, set out along a path designed by the store. Every location even has a map showing customers how they should make their way to the end, almost like a maze. In some locations these can be hundreds of metres long.
The purpose of this is simple – it ensures every customer walks through every single product range. Although they can skip between areas if they choose, the layout of each floor makes it much simpler to just walk the path provided for them, and see every product in the process.
There’s little wonder why Ikea sets up all of its product display as though you’re walking into someone’s house – they want you to feel at home.
As customers walk through the designated path provided, they see various bedrooms, kitchens and bathrooms decked out with all different sorts of products. Literally everything is for sale.
Not only does this make customers feel more comfortable after having driven quite a while to get there, but it also allows them to imagine how they would incorporate those products into their own home.
Customers can walk, look, touch and feel each product, and the open space of each room means they aren’t navigating tiny aisles or feel like they are bothering anyone by taking up too much time. They feel free to browse at their own leisure, which will make them much more likely to buy something.
Part of the whole “Ikea experience” is stopping off at the restaurant halfway between the display rooms and the warehouse. This encourages people who aren’t buying products to at least get some food, and also helps associate the Ikea brand with an experience, rather than just another retail outlet.
Consistency and branding can be underrated. Many customers enjoy coming to a store and knowing that no matter where they go, it will all be set up the same way.
Each Ikea store not only shares the same planning method, with show rooms leading on to warehouses, but they also have the same product range. Customers can look up products in the United States and know they’ll likely be able to find the same ones in Australia or Europe.
There are all sorts of reasons people like Ikea furniture, but by far the biggest is because it’s so cheap. Customers can get a full dining table set, couch or bed for next to nothing compared to some dedicated furniture retailers.
Discounting doesn’t have to ruin a business – it just needs to be done in the right way. IKEA cuts corners by having customers retrieve all the furniture from a warehouse at the end of their browsing journey, and most of all, by having them construct it themselves.
Plenty of costs are cut in packing as well – Ikea keeps it simple and lean. This also has the added benefit of being environmentally friendly.
Staffing is kept to a minimum as well. You’ll notice that Ikea staff aren’t actively helping customers, instead they are opening boxes, arranging furniture. They will assist when asked, but for the most part just stay out of everyone’s way.
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