Suchit Kakar
Aug 16, 2018

Can Ikea crack Indian retail?

The author speaks about his experience at Ikea on day two of the store's existence in India

Can Ikea crack Indian retail?

A DJ, an MC, crowds, bouncers and barricades. Words you’d use to describe a concert also perfectly describe everything you see while standing in line to enter the new Ikea in Hyderabad on its second day of business.

Ikea’s first foray into India is truly big news. Having already made its presence in a significant part of the world, it was only time until it found its way here.

Ikea is not just known for its wide range of products, but also for its unique retail experience. How does that experience translate in the Indian context? As a retail specialist, I was curious to find out.

Let’s start at the beginning, right at back of the queue.

Build hype

Blaring techno music, an MC to engage the crowds, bouncers to manage them and a never-ending, serpentine maze-like barricade to get through before you even enter the store. A perfect way to manufacture hype, making it feel like a special experience and making you feel special for having made it through.

Takeaway: If it looks, sounds and feels like a big deal, it probably is a big deal.

Set expectations right away

Ikea prides itself on its competitive prices. Its fascia has an image of Rs149 (US$2.12) Chicken Meatballs, and the very first item you see is a Rs15 (US$0.21) set of spoons.

Every section has a “Our Lowest Price!” wall and every price tag a placebo MRP, to emphasize how low their prices go.

While some retailers might avoid this approach, it works well for Ikea, signalling that it understands the Indian market’s expectations of prices.

More importantly, I feel, it encourages people to buy more, not for a want or need, but for a good deal.

Takeaway: Set the context in which you want to be seen, before customers do that themselves.

Appeal to dreams

The in-store journey begins with Ikea’s ‘Homes’: fully furnished spaces that can be mistaken for real homes, if not for the price tags.

While nearly everything you lay your eyes on can be bought, the importance of this space is not selling individual products, but, I believe, to sell the look and feel of your dream home. It’s the sale of the intangible—of a feel of what could be.

To get as close as possible to your needs, these dream spaces come in a variety of sizes and budgets, ensuring that nothing seems out of reach.

Takeaway: Sell the big picture. Sell customers their dreams.

Guide from a distance

The store is 400,000 square feet, displaying an estimated 7,500 products. Sounds overwhelming, but I feel they have it under control.

There is a fixed journey to follow, but it flows so naturally that you feel you're exploring in your own way.

So, while it seems overwhelming, you’re never lost. Help is everywhere for those who seek it, and invisible to those who don’t.

Takeaway: Make customers feel they’re in control (even though you are).

Sell benefits not features

Ikea does not simply say what a product is, but describes what it can be.

A sofa isn’t a just a sofa, but a place to “plunge into a warm, personal and cosy atmosphere where you can pamper yourself and enjoy life’s little pleasures.”

A vegetable toy set is an opportunity to “encourage role play, which helps children to develop social skills by imitating grownups and inventing their own roles.”

The tone of voice is of someone who understands you and your needs. 

Takeaway: Let your customers know what’s in it for them.

Start with dessert

At the centre of the store is a 1,000-seat restaurant where dessert is served first. Targeting you when you’re at your hungriest and most vulnerable to temptation. I could not spot a single plate without some dessert.

Anticipating large crowds and long lines, the company has limited the food menu to just five items, I believe, to make it quicker for you to decide.

Takeaways: Keep your options simple to keep your lines moving

Make it easy to decide

Beds, kitchens, wardrobes are all big investments. Ikea attempts to cover all potential worries and queries you may have before buying, to help ease your decision-making.

It tries to anticipate questions, and answer them through the store design, before you can think of them.

Picking individual elements too much of an effort? You can buy an entire kitchen set up as-is. Concerned about maintenance? Certain products come with tips on how to clean them. Worried that your child might outgrow a bed? They have extendable children beds.

Takeaway: To get someone to buy, take away reasons for them not to.

A relaxed shopper spends more

It appears that Ikea understands the importance of a relaxed shopper. 

There are multiple free lockers to keep your belongings and keep your hands free.

Ikea has implemented ways to keep children entertained, knowing that if they are happy, you’ll shop in peace. I noticed the area where you get your items packed has a mini-kitchen for your children to play in. Where you need to spend time with staff to help design your wardrobe, there is a screen to keep kids occupied.

There are 17 normal checkout counters, as well as express and self checkout counters. As a result, the buying process went along a lot smoother than expected, leaving me quite pleased.

Takeaway: The best way to hold attention is to alleviate distraction.

That being said...

Ikea seems to be doing a lot right, though that doesn’t mean there aren’t concerns.

The “Homes”, though beautiful, are decidedly Western. This might appeal to aspirational Indians, but may not attract traditional buyers.

The ‘self-serve’ process for large items appears to confuse and frustrate some shoppers who required additional aid and assistance.

One of Ikea’s key offerings is hyper-personalisation. This amount of control sounds great, but at times one just looks for an expert to take the final call. 

While the company claims to have an “open for all” policy, and its pricing makes the brand seem very inclusive, the fact that all the signage is primarily in English feels a bit excluding.

As Ikea has already changed for India in many ways, maybe the question is, has it changed enough Will the brand's big bet pay off, and is the timing right for consumers to meet Ikea half way? We’ll be watching.

Suchit Kakar is insight manager at Fitch.

Campaign India

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