Late-blooming IKEA U.S. wears 20 well

DSN Retailing Today, Sept 6, 2004 by Mike Duff

Space allows IKEA to merchandise its assortment to what the company regards as best effect. Take upholstered furniture, for example. At one location on the sales floor, you'll find the full array of sofas. But they also are incorporated individually in group displays that are central to IKEA's merchandising. Each IKEA today has several full home and many other coordinated displays--including platform-mounted settings that employees call go-go booths--that include multiple products in context with one another.

The displays are put together in solutions packages, showing how IKEA products can be used to furnish both small and large home settings. Having multiple displays also makes IKEA stores easier to shop, another company goal, as customers have more than one chance to spot and to grab accessories and other small items.

Although it built its reputation as a resource for urban apartment dwellers, IKEA has been expanding product assortment and services to accommodate consumers in a range of environments. Space is something IKEA continues to take into consideration. Several sofas and even beds have cushions that lift out to create storage areas. But IKEA's range of products and services now extends to appliances and kitchen cabinets, which can be planned at a special station in the store to fit a shopper's space requirements. IKEA even devotes part of its web site to a cabinet planner for customers who would rather redesign their kitchens from the comfort of their own homes.

Yet, perhaps no IKEA department has been revolutionized as much as the Marketplace. Home to IKEA's housewares and domestics, Marketplace has become renowned for certain categories, particularly funky inexpensive lamps. Today, though, the company is plowing out its selection of rugs, sheets, window coverings, tabletop, cookware, home decor and other segments.

IKEA only began to get serious in many of these categories within the past couple of years and at first tended to the fun and funky line, providing solid merchandise at price points--under $2 for a drainer--that made them practically disposable.

Today, however, the assortment is much broader. In its cookware line, for example, IKEA offers not only the kind of inexpensive items originally rolled out, such as a $2.49 Steka non-stick aluminum frying pan but also offers a $12.99 non-stick aluminum frying pan in its Kurage line and 18/10 steel nonstick frying pans for $24.99 in its IKEA/365 line.

Bigger stores have given IKEA more room for Marketplace, which shares space with the furniture pick-up area on the first floor beneath furniture. Bigger stores also mean IKEA can offer more self-service products. With more space for self-serve boxed furniture and accessories, shoppers can grab and go, saving them time at the service counter waiting for store associates to pull products they've selected from the back room.

STORE NO. 20, NEW HAVEN, CONN.

While new products and services may be the focus of merchandising efforts in existing markets, when IKEA heads into new territory, education becomes the central concern. Not only is the shopping experience new, requiring consumers to jot down code numbers and get many products from back room storage, but the product assortment is unique and changes rapidly.