Maintaining Top 100 retailer status in a challenging year involves multifaceted focus on customer service, inventory and marketing initiatives, and one furniture, bedding and accessories retailer is using the de facto formula to build on its already successful growth.
Ikea, the Swedish-born retailer with 54 stores in the United States, was No. 1 on Furniture Today’s fastest-growing retailer in 2023 and No. 3 the Top 100 list with more than $4.2 billion in sales. According to proprietary Furniture Today research, Ikea’s 6% percentage growth was enough to garner the top spot, and its net increase of $238 million secured the lead position on the increase in dollars list. Total, Ikea earned points across all five of the indices used to determine the fastest growing retailer, the only one to do so based on 2023 data.
Furniture Today recently visited an Ikea store in Charlotte, N.C., and Loyalty Manager Jeff McGowan provided a behind-the-scenes look at some of the retailer’s strategies for building a strong regional base as well as reaching numerous demographics with customized marketing strategies.
Going local
“By working within the community, Ikea stores get a first-hand look at the needs and opportunities to help our neighbors,” McGowan said. “Partnering with local charities, hospitals and schools helps build a strong relationship by giving back. Helping children is our No. 1 priority, and homelessness will be a focus in fiscal 2025.”
For the Charlotte store, recent initiatives include Grad Bash, an in-store event where Ikea invited high-school seniors going to college to enjoy free hot dogs, a DJ, a caricature artist and a scavenger hunt. Vignettes throughout the store featured specific local college-themed merchandise and color palettes, all ready to go into carts and home with students.
McGowan said that Grad Bash is just one example of what the retailer does to create loyalty between the store, local students and their buying parents.
“(These events) create awareness for the store and what we stand for: children, sustainability and understanding various community needs,” McGowan said. “We have worked with the HEARTest yard, which benefits Levine’s Children’s Hospital in helping children with congenital heart disease; Innovation Barn, which is Charlotte’s hub for circular economy initiatives; and Grindhaus Studios, which is a Black-owned business in Charlotte that works with tweens and teens to learn about making music.”
Sustainability and circularity
Arguably one of the first retailers to embrace recycle and reuse in the store, Ikea created its Buy-Back and Resell service with several goals in mind. According to McGowan, the program reaches customers with “very thin wallets” and makes sustainable living more affordable while also demonstrating the quality of Ikea products and building trust in the brand by continuing to support customers long after their initial purchases.
“The BuyBack & Resell service enables us to help customers prolong their furniture’s life and promote sustainability and affordability,” he noted. “We buy back our customers’ used Ikea furniture in return for Ikea store credit. These items are then available for resale in our As-Is area, providing an even more affordable option for the many people. This inspires customers to acquire, care for and pass on Ikea products in more sustainable ways and creates a movement in society around better living.”
“At Ikea, we have always offered a range of services to make our customers’ life easier and more sustainable,” McGowan continued. “This kind of approach and way of thinking will help us achieve our goals of becoming a circular business while staying people and planet positive. Ikea wants to make sustainable living easy and affordable for everyone.”
Custom solutions for residential and commercial customers
The Charlotte store also implements product strategies that support the retail team’s goals of personalizing buyer journeys.
On the residential side, “complete low-price solutions” room sets showcase one-price/one room product groupings that provide a curated design aesthetic in a multi-SKU package that can be taken home the day of purchase.
For commercial clients, Ikea for Business provides connections with Ikea Business specialists that assist customers with furniture planning, storage solutions, and even display areas to showcase products. Specific facets of the Ikea for Business program include access to interior design services, discounts on purchases, and select delivery options.
At the Charlotte store, McGowan said that his team has processed up to $100,000 business orders with the existing supply chain.
“The renewed focus (on commercial customers) has been since last year with the creation of Ikea Business Network,” said McGowan. “We want to have supply on hand and for it to be available to all store customers.”
The Charlotte Ikea team is also preparing for the opening of a 15,000-square-foot Plan and Order Point with Pick Up store that will complement the existing 356,000-square-foot retail space, offering additional product access to regional customers in the southern part of the city. McGowan said the new store is simply one of many additions to the company’s strategy of providing localized service in international markets.
“Complete low-price solutions strengthen the Ikea low -price profile and show the customer a great home furnishing solution at an affordable price,” he said. “We study the market and conduct home visits to ensure our solutions are relevant and affordable for the many people in the local market and focus on the main function for each area of the home.” Courtesy: https://www.furnituretoday.com/furniture-retailer/ikea-supports-continued-growth-with-local-connections-sustainability-and-low-price-solutions/