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Golden Service Enterprise Ikea

Giving Customers That Perfect Match


Giving Customers That Perfect Match


In CommonWealth Magazine's recent service industry survey, Swedish home furniture giant Ikea reigned supreme in the "atmosphere" category, enticing the island's consumers with its warm, friendly, real-life ambience.



Giving Customers That Perfect Match

By Ming-ling Hsieh
From CommonWealth Magazine (vol. 477 )

In front of the sunbathed picture windows that overlook the Dahan River, long wooden tables are interspersed among sofas, chairs and stools. Although the restaurant, on the third floor of the Ikea outlet in the Taipei suburb of Sinjhuang, is teaming with afternoon guests, its high ceiling and comfortable lighting convey a relaxed feeling, as if it is someone's home.

The trademark of the 70-year-old Swedish brand is creating spaces that are warm and full of imagination. In the 2011 CommonWealth Magazine Golden Service Awards, Ikea placed first in the category of home product stores and left the competition in the dust in terms of atmosphere.

"Some shops seem very distant, very cold," notes a thirtyish female office worker. Newly wed, she and her husband are planning their new home, so they went to Ikea to get some inspiration from the some 50 room designs on display. "Ikea gives you a feeling of the whole family being happily together. It's very homey and warm."

A Friend Introducing Something to a Friend

"We hope to use experiential marketing to help customers turn their imaginations about their home into something concrete, in an uncomplicated and direct way," explains Roxy Cheng, marketing manager at Ikea Taiwan. "It's like a friend introducing something to a friend."

Using simple, natural Scandinavian designs that allow people to  express their personal styles, Ikea creates the kinds of spaces people want to have. Some Taiwanese customers even collect every single Ikea catalogue.

In order to create a unique style and solutions that are practicable in everyday life, Ikea depends on products that are competitive in terms of price, function and design.

In the Golden Services Award rankings, Ikea products stand out for their uniqueness, coming in even ahead of Muji products, which are famous for their natural and simplified style.

Ikea founder Ingvar Kamprad, who has made it into the Forbes list of the world's billionaires, once boldly declared that Ikea wants to sell a vast selection of attractive, functional furniture for the vast majority of people who "don't have six figure amounts in the bank and don't live in enormous apartments."

To prevent two major pitfalls, namely, creating functional furniture that lacks good design or well designed products that are extortionately expensive, the some 3,000 Ikea designers worldwide need to be very price-conscious. On top of customers' needs, they also need to take into account technological hurdles, production line requirements and cost control.

Kamprad once said: "To design a desk which may cost US$1,000 is easy for a furniture designer, but to design a functional and good desk which shall cost US$50 can only be done by the very best."

What Ikea sells are furniture and home products with the prices, functionality, style and variety that let customers easily change the look of their homes in a single shopping trip. And with more than 1,000 new products hitting the market four times a year, new customer needs and desires are constantly addressed.

Since the same sofa model can be had with a leather or fabric covering, or can be changed from hot pink to the latest pop color, Ikea is able to match the tastes and desires of people of different ages and walks of life. A piece of furniture is no longer an heirloom, but a means to decorate life, which can be changed at any time to express a person's mood or style.

Caring about What the Customer Cares About

Given the rapid change and broad selection of items, Ikea devotes a lot of attention to the design of its product labels, listing all the factors customers care about and helping them pick an item or match it with others.

The front side of the label for a white "Marginal" wall shelf lists the product price and the name of the designer, notes that the shelf can be cut to the desired length, and that there are other color options. On the back of the label customers find the product description such as base material, length, width, height, load-bearing capacity, and the "good to know" hint that screws should be retightened about two weeks after assembly. Care instructions state "wipe clean with a cloth dampened in a mild cleaner, wipe dry with a clean cloth." These are all details that are of interest when ordinary consumers select furniture or home products. In contrast to traditional furniture stores, Ikea does not emphasize where the material comes from or how rare it is.

In addition, Ikea furniture is designed for self-assembly and neatly packed so that customers can easily take things home themselves. For the vast majority of Ikea items, delivery services are not necessary.

Lee Jen-fang, professor at the Graduate Institute of Technology and Innovation Management at National Chengchi University, hails Ikea's "lean logistics." As products are packed in flatter and smaller packages, transportation volume decreases too. Ikea employees can easily move the products within an Ikea outlet on pallets and stack them with a pallet stacker, which indirectly increases the company's cost competitiveness. Lee thinks that the Ikea management principles "designed for packaging and storage" or even "designed for logistics" even outdo the famous lean manufacturing of Japanese carmaker Toyota.

Incorporating consumers' ways of thinking and lifestyle preferences, and deploying global manufacturing capacity and design capability, Ikea has become a formidable powerhouse with which few can compete.

Translated from the Chinese by Susanne Ganz