IKEA Is Basically An Unavoidable Object When Sorting Out The Cases Of Key Household Enterprises

- Sep 24, 2020-

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IKEA is basically an unavoidable object when sorting out the cases of key household enterprises. From the operation action every year, whether it is product innovation or marketing activity, there are always some excellent performances.


IKEA has made remarkable achievements in the past few years. Dozens of shopping malls have contributed more than 10 billion revenue and hundreds of millions of visitors a year. This is what many companies pursue.


 some of their past practices are worth learning, but they may be difficult to catch up with. However, we can look at some of their future plans and learn more or less some valuable experiences from them.


Back to August, IKEA China held the "infinite value of home" press conference in Shanghai for fiscal year 2021. According to the information disclosed by on-site executives, IKEA has a package of actions in the next year.


for example, it plans to continue to expand online channels and explore online and offline retail; for example, it will continue to open new stores, focusing on Shanghai, Fuzhou, Nanning, Kunming and Dawan District of Shenzhen.


there is also a "tomorrow mall" project, which is the IKEA store in Xuhui, Shanghai, which will be officially launched.


Small shopping malls and City stores continue to be valued by IKEA. They are expected to explore the Guangdong market in Shanghai and Dawan district. It is not clear whether they will continue to expand to more cities.


in terms of service, IKEA emphasizes the whole house design service, that is to provide consumers with integrated home decoration scheme and professional point-to-point service.


according to public information, this service will start from 2019. Designers in the store will provide customers with one-on-one service, from design scheme to furniture delivery, assembly, recycling, etc., so as to realize the whole house design and one-stop packing.

     

All products can be purchased online, and IKEA members can return and exchange goods within 365 days.


 in the next year, IKEA has a move worthy of our attention, that is, they will continue to add lower price goods, and it is expected that there will be more than 250 lower price goods next year, accounting for about 5% of the total SKU. More than 2000 new products will be launched in China.


according to IKEA's official statement, price reduction is not a promotion, but through industrial chain optimization and technical improvement, the production and packaging costs of goods can be reduced, so as to reduce the price.


Zhang Lina, vice president of IKEA's China business, also cited an example. The selling price of Billy bookcase is 1399 yuan in fiscal year 2008, and will drop to 999 yuan in 2021. There are 599 yuan for the Bowen armchair, which will be reduced to 399 yuan.


Of course, IKEA must make sure that after the price reduction, the quality of its products is not discounted.


 it seems that the price is compared. In fact, if we want to fight this battle for a long time, we can still win. The test is the level of enterprise cost control, and the operation of supply chain, technology and other links. It is not so simple as to reduce the price alone.


last year's future + strategy will continue this year, that is, through the integration of various store modes and online and offline channels, IKEA's accessibility will be improved, and more digital solutions will be introduced to enable consumers to have a better shopping experience.


Also, there are some complementary methods, such as the introduction of vegetarian meatballs and the replacement of meat raw materials with plant-based materials. By the beginning of 2021, the proportion of customer distribution orders covered by electric vehicle delivery service will be increased from 70% to 90%, and the number of 100% electric vehicle distribution cities will be increased from 5 to 17.


 in the past fiscal year, that is, from September 2019 to August 2020, IKEA's global retail sales reached 36.7 billion euros, up 5% year-on-year. In the Chinese market, 28 IKEA shopping malls operated by ingka in China received 108 million visitors with a sales volume of 15.77 billion yuan.


IKEA has opened 7 new stores in mainland China, including standard stores in Guangzhou, Zhengzhou, Guiyang, Changsha and Qingdao, and Yangpu small shopping malls and Jingan City stores in Shanghai.


In terms of digitalization, IKEA has launched a special app and tmall flagship store. For example, the number of fans of IKEA tmall flagship store exceeded 340000 on the first day of its launch, reaching 1 million in a week.


IKEA shopping app is also relatively successful, with 150000 active users per day. Many stores can't do this. The main reason is that IKEA has a lot of high-frequency products. It is common for users to buy several times a year.

and during this year's epidemic, online sales grew rapidly, with an annual growth rate of 67% year-on-year.


for a long time before this, IKEA's online business progress was relatively slow, and the major turning point occurred in 2018. It first sold goods with small programs, and the results were good.


 then the e-commerce services in 35 cities were opened, mainly in Jiangsu, Zhejiang and Shanghai, and then increased to 149 cities.


 later, strategies such as operating app and opening flagship stores in tmall were implemented. The pace was very fast and the investment was significantly increased.


In the past two years, IKEA has performed well in the field of e-commerce, playing a role of catching up.


 this is closely related to IKEA's low price advantage. Online marketing still attaches great importance to price and brand appeal, while IKEA has a relatively loud brand endorsement, from the first and second tier cities to the fourth and fifth tier cities.