Ikea should consider reinventing itself as an IT company

Many banks are already doing this. They internally call themselves IT companies whose business model in Banking Services to customers. This is an excellent way of becoming frugal in economics and extremely customer friendly.

Ikea has been around since 1943 and for last decade it has been the world’s largest furniture retailer. The company has done fantastically well in last few decades in managing its supply chain as well as continuously reduce cost of its largest selling items.

Ikea started selling furniture in Hyderabad last month and I have made two trips to the store, primarily to explore what they sell and if there is anything that I can upgrade/replace in my home for usability/utility/looks (read UI/UX !). But I felt that they are taking their current success for granted and would not change few things (like the website or template size of furniture which currently is global).

Ikea says they have researched 1000’s of households but somehow I felt they have not got the audience, or maybe the customer needs right. In store as well as online. India has cheap access to solid wood furniture made locally compared to global prices. The demand for Ikea furniture will be high with a specific audience which is impulsive, impatient and don’t care of furniture lasting 10 years+ (Read IT/ITES and other middle class folks working at initial to mid levels of MNC’s and better paying Indian companies).

Following are my thoughts around how Ikea could kill it in India (Hometown/Home center/@Home are sitting ducks in terms of price: quality ratio and Urban Ladder/PepperFry cater primarily to solid wood market (PepperFry modular furniture sucks big time compared to Ikea).

Fix the website first – It is not just your product catalogue

Improvement 1: Indian homes are different from other countries where Ikea sells furniture. Room sizes (Drawing/Bed/Kid/Media/Kitchen) are smaller and many times  straight walls are blocked partially by concrete pillars. Many times wardrobes, beds need to fit into available sizes and builders don’t care of the template size in use by Ikea for decades.

Most users have access to internet and would want to check the space available vs size of say the bed or wardrobe. But it seems that in the product catalogue, Size is not an attribute. It is a part of description. Else someone just forgot to provide a search attribute with size (especially considering the fact that Ikea build wardrobes (PAX) in two main sizes – 59″ and 78″. So as a user you open Wardrobes, and go through hundreds of them looking for design and rejecting the size you don’t need.

Product Page does provide an option to look for similar products but says “More Width 200-249 cm” which is a) not useful b) also shows wardrobes without doors

Improvement 2: Items that are out of stock

  • There is no option to skip viewing items that are out of stock. Only when you open Product Detail is when you realize that product is out of stock.
  • There is no way to know if the product will be back in stock in next few days, or 1 week or never!
  • There is no facility to get updated when the item is back in stock (UrbanLadder does a great job here). This also ensures that Ikea is not collecting information on products that people want but are out of stock

Improvement 3: Please fix your Login and Forgot Password screens! After spending more then 2 decade in IT, I don’t understand how could someone go wrong with Login screen and not fix it for weeks and months unless this is by design (which does not make sense). They work at times and most times tell me something is wrong at Ikea’s end (cute message)! And keep the customer logged in. Why do you want to auto logout a customer who already logged in with great difficulty? Please learn from Amazon. They will not ask for a password before the checkout screen for months. They don’t want to make it difficult for the customer. And please consider Cognito login using Facebook, Google. I know they were invented lot after you, but it makes sense for you to allow logging in using FB/Google. You need the customer “In” not “Out”.

Improvement 4: Evolve your IT which probably was developed 5-10 years back. Your PAX Planner is a great tool. But why can’t it support keyboard keys like Delete? And When I Click Save, why regenerate the code every time which means I have to copy paste the code somewhere each time I hit Save.

Improvement 5: Consider reducing the clicks to reach a product. Example – For Search I have to click on Search button which opens a search page. Search is needed in title bar on every page. Check UrbanLadder and PepperFry. PepperFry even smartly lists the recent products your searched.

Improvement 6: People need guidance. You do not have million Ikea users (In India) whom we can refer to. Example if I buy 236 cm high wardrobe, then how much further clearance would I need from roof to assemble the wardrobe. It could be FAQ’s.

Improvement 7: Consider a Discussion Forum where Ikea Customers can answer questions from other customers. This is amazing on Amazon.

Delivery

On Amazon India, if same product is available under Prime (free shipping) for Rs 400 and also at Rs 340 + 45 delivery charges, I can assure you that Rs 400 listing will get more orders! People love free shipping. There are few options:

a) Bundle the transport cost in product cost. In any case the delivery is in same city.

b) Free shipping can take upto 3-4 days (to optimize routes) while Express delivery is paid

c) Free delivery above say Rs 20,000 orders. This also encourages people to buy some items from the wish list maybe

d) Free delivery for items like Wardrobes, Sofas etc

e) Give a free delivery coupon for next purchase at checkout time!

Assembly

Similar to delivery, UrbanLadder and Pepperfry do not charge for delivery/assembly. The precedent is set. Expectation is free! I have heard first hand experience of people who tried to assemble themselves and drove the screw in too much. Many customers may scratch the finish while assembling. All this leads to bad word of mouth publicity and suddenly becomes a quality perception issue rather than a skill issue of the customer (awesome!).

Considering that you are planning to invest in excess of Rs 12,000 Cr in India and you have partnered with UrbanClap for assembly and UrbanClap’s last year revenue was around Rs 50 Cr, maybe you should just buy a stake or buy them out fully!

Store Improvements

Will write another post soon.

PAX

PAX Wardrobe designed by my 14 yr kid using online PAX Planner

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