After much anticipation, iconic furniture manufacturer Ikea has set up shop in the Republic. But just what is the enduring appeal of the Swedish brand?
At a time when household brand names such as Coca-Cola are being forced to increasingly localise their marketing strategies, Swedish furniture icon Ikea has managed to turn an almost exact replication of its marketing model from country to country into an art form.
Here in Ireland, the opening of the Ikea store at the end of July was undoubtedly one of the top 10 ‘most talked about’ at the water cooler this summer. And people turned talk into action – according to Ikea’s marketing manager for Ireland, Lisa O’Brien, an average of 15,500 people are going through the doors of the 31,500 sq metre store in Ballymun on a daily basis.
Some of the hype around the opening stemmed from anticipation, as the Republic of Ireland store had suffered considerable delay due to planning regulations, one of which was the upgrading of the Ballymun interchange off the nearby M50.
“There was a sense of ‘will they, won’t they?’ before the opening, as it had been talked about for so long,” says O’Brien. “A lot of people had travelled to the store in Belfast – 25pc of its customers are from the south – and people were very familiar with the concept. Following the press launch, there was full-page coverage in most of the papers. In a recessionary time, this is a good news story and it’s almost as if everybody wants it to work.
“The Ikea concept is very strong. If you look at other retailers, their strategies seem to change and are more reactive to local markets. Ikea sticks rigidly, in a good way, to the concept. The store layout stays the same – on one level you have 55 showroom sets and there’s a market hall area underneath and a self-service warehouse. Once you go in there’s a path you must follow, which is always the same. There’s a process in how you shop, with customers provided with tools such as pencils and measuring tapes. Ikea is so confident in the tried-and-tested store that it wouldn’t compromise on it.”
The ‘experience’ of going to Ikea is one of its great appeals, with many Irish punters seeing the whole thing as a day out. “On your first trip, you could spend at least three hours just browsing around the room sets. Then you come to the 550-seat restaurant, which offers Swedish meals at really low prices. In every Ikea store, the restaurant is seen as a marketing tool – it’s not there to make money,” says O’Brien.
“When Ikea opened first in Sweden, its founder Ingvar Kamprad discovered visitors were treating it like an art gallery, so he opened a market hall where they could pick up pots, pans and accessories with a shopping trolley, and then included a restaurant so they would stay longer.”
In fact, O’Brien says the store itself is Ikea’s biggest marketing tool, followed by the catalogue – 864,000 copies of which were distributed within a three-hour drive of the Ballymun site in August – followed by advertising and other promotions.
“Ikea follows the traditional ‘four p’s’ matrix [product, price, place and promotion] evenly spread out, but there’s an extra emphasis on place. Half of the marketing budget is spent on the catalogue, which is out once a year, showing around 3,000 of the 9,500 products available in-store.”
The pulling power of the physical stores is so strong that so far Ikea hasn’t needed to offer online shopping to customers. “Ikea has looked at this, but shipping out from a central warehouse would be very costly. However, everything you see on the website matches what is available in-store, and there is information on how to shop, as well as local pages for Dublin.”
The first ever Ikea store opened in 1955 in Sweden. The phenomenal customer following Ikea has achieved ever since in its 301 stores worldwide is linked in with the pricing strategy, O’Brien acknowledges.
“Ikea’s vision and business idea is to provide products at prices so low that as many people as possible can afford them, and it sticks to that principle all the time. For example, the ‘Billy’ bookcase is 30 years old this October. It has been around for so long that we’re able to achieve greater production capacities each year, which means the cost of making each bookcase comes down. This is then passed on directly to the customer. With a lot of retailers, greater economies of scale means going for higher margins, but Ikea promises to be transparent and sells products at the lowest possible price.”
While the store layout and stock stay virtually the same in each country, the marketing strategy tends to feature local adaptations.
“In August 2008, we conducted research to see how consumers felt about Ikea compared to other stores. Of the people we interviewed, 30pc had visited an Ikea store somewhere before and when asked whether they could recommend Ikea to a friend, 60pc said they could, which was strange because half of these people had never been to a store,” O’Brien notes.
“We realised we didn’t have to do a lot of education about the brand, but we did have to inform people about how to shop in the store, as it is very different from anything people have seen before in the Republic of Ireland.”
Shopping at Ikea involves people doing a bit of research themselves as well as being prepared to assemble items at home, or to pay someone else to. “We’ve been surprised walking around the floor how few questions we’re getting from customers about the shopping concept. It seems people have really bought into it and want it to work for them.”
In terms of the creative for the TV ad here, it carried the message ‘Bring out your Rebel’, urging Irish people to stand out from the crowd and be brave. “In Irish homes, people tend to go for the same kinds of things, such as beiges, browns and wooden floors. The thread throughout the marketing campaign was to encourage people not to fit in with everyone else, but to choose interiors that fit in with their lifestyle,” O’Brien explains.
“A lot of that was communicated through the guerrilla marketing activity, which involved leaving furniture in various locations around the city with tags saying, for example, ‘Ikea opens 27 July, take a seat’. People took every piece of furniture – that was the intention. While local marketing varies, activities will always have a ‘twinkle-in-the-eye’ feel to them and focus on the unexpected.”
In this vein, on the morning of 27 July, every seat on one of the Luas trams was covered with Ikea fabric and all of the advertising spaces in the tram were filled with Ikea messages – something that had never been done before from an advertising point of view.
Hits to dedicated Twitter and Facebook pages that Ikea had set up prior to the Dublin campaigns indicated that they had been successful, she says.
An interesting aspect of Ikea’s philosophy and branding is its commitment to social responsibility and being environmentally friendly. In India, it has linked up with groups of women, helping them to set up a company to manufacture and design its textiles, which has led to them becoming independent.
The recycling target in stores is 90pc – the Belfast store has already achieved 94pc, notes O’Brien – and Ikea stores use geo-thermal heat under the ground as well rainwater in the toilets and Brise Soleil installations, which attract sun and bring heat in the winter and deflect it away in the summer.
“We work with local projects, such as a furniture recycling initiative with Ballymun Regeneration, which takes odd pieces we can’t use. In time we intend to link in with schools, doing tours showing how environmentally friendly Ikea stores are,” she says.
The loyalty scheme ‘Ikea Family’ in the UK has taken a novel approach in this area – each time a card is swiped, Ikea makes a donation to the Woodland Trust to create a foot of forest, the idea being that each store will be able to plant its own store in trees again every year.
Ultimately, what allows Ikea to really be different is its ‘Swedishness’, says O’Brien.
“We will celebrate Swedish traditions such as crayfish parties every August and it’s almost mandatory to stay with the Swedish names on all the items of furniture on sale.”