#17 Built to Last Businesses - They win because of Superlative Customer Experiences
The much awaited Ikea store in Mumbai opened doors last week. We are currently furnishing our new home, so I was literally on a countdown to check out the store and pick up beautiful home accessories.
We spent close to 5 hours at the store on the Christmas day and the experience blew me away.
I realised that IKEA concept is based on creating not just selling furniture but building a nice and pretty home.I loved the minimalistic style in the little showrooms created within the store.
We ended up with a significant credit card bill, but still an extremely happy feeling at the end of the day.
It's been sometime that a B2C brand has impressed me this way. I decided to dive deeper to understand the reasons for this iconic brand's success.
Here is why I think IKEA is hugely successful
#1 Solving the Right Problem
The IKEA philosophy began with a revolutionary and simple idea of selling home furnishing goods that were lower in costs than their rivals, by cost-cutting solutions that do not impact the quality of their products. With a whopping 1200+ products across categories , it takes advantage of the cheap manufacturing sources that are available globally, bulk-quantity purchasing and low-cost logistics to keep the prices very low.
At the heart of Ikea’s success is value: You know what you’re going to get when you shop at Ikea, and it’s going to be affordable.
Price is so important to Ikea’s strategy that the company first decides on the price of a piece of furniture and then reverse engineers the products!
#2. Their Obsession over Customer Experience
I experienced one of the best customer experiences in a retail space ever.
Furniture is set up in its natural environment. All is in a place in context. The brain sees, knows and desires its intrinsic worth.Beautiful spaces done up with some dreamy furniture and accessories.
Ikea’s vast amounts of white also appeal to the subconscious, a neuromarketing technique that Apple also uses brilliantly.
The store was setup along a directed walking path that takes customers in one direction through nearly its entire inventory. There are no real shortcuts (well almost)
There are arrows pointing the way on the floor, and signs with a corresponding store map to reinforce the path.
The scent of fresh baking overpowers you by checkout when you pay for your Ikea finds. There's a part of the brain that fires when you pay, right? And then they minimise the stress of payment by the fragrance of baking, warmth, sugar — particularly by reducing the stress.
The food is quite good and extremely affordable. A pizza slice for 50 bucks , amazing cookies for 50 bucks, a samosa for 10 bucks!
The in-store cafe was the brainchild of Ikea’s founder, Ingvar Kamprad, who started the company in 1943
Ingvar was known for saying, ‘You can’t do business with someone on an empty stomach!’
The employees were of a different calibre all together!These were young, educated middle class tech savvy folks, who were ever so happy to help. In their bright yellow t-shirts, they were easy to spot. There were at least a thousand of them in the store.The impeccable support gesture, not too overbearing, not ignoring - just the right amount of help extended. I was chatting with an employee and got to know that his offer had been rolled out 3 years back, and since past 1 year he was undergoing rigorous training!
COVID measures put in place were phenomenal. For starters , you need to book a slot and visit the store. 2500 shoppers per day is the daily limit currently and was strictly being followed.
Every 50 meters they had bottled water for the shoppers - a simple , but a useful gesture.
There was nothing you couldn't find - everything was so well organized and displayed.We were also added to the IKEA family and got immediate access to 90 day return / exchange window. Have you heard of it ANYWHERE before?!
Deeyan and Mayank picking up our stuff from the warehouse aisles
A lot of products are meant to be collected for billing from the warehouse beneath and you go upto the isle and rack of the product to pick it up from the shelf yourself! I loved that experience of walking through their huge warehouse.This one's going to be a huge mind shift for India - but a very welcome one.
As part of their India strategy - what I also saw unique was a design team and an installation team. They are adapting to the India geo well. DIY installation is still probably sometime away for Indians.
#3. A vision for future
Ikea is testing a program where people rent Ikea furniture instead of buying it. They are also opening up more city centre stores, 2 coming up in Mumbai soon to “shorten the distance between the store and the customer.” I see Ikea overhauling its digital presence as well.
Globally, Ikea had retail sales of 41.3 billion euros in its 2019 fiscal year and continues to grow strategically. 40,000 people had turned up at it’s opening day in Hyderabad and the Mumbai junta is going to mob it as well , once we are back in some normal times!
Built to Last - IKEA is a great example of that kind of business. The one that is built patiently and lovingly over decades.