Retail Marketing Summit: ‘IKEA was established during times of economic hardship’ – How IKEA Australia leans into lean times
Getting people to spend money in discretionary categories like home furnishings during a cost-of-living crisis is a tough ask. For IKEA Australia, the answer is focusing on brand trust during the challenging times, in the hope that customers will remain long after the crisis has passed.
Speaking at Mumbrella’s Retail Marketing Summit on Wednesday morning, the retailer discussed two pillars of its marketing and communications strategy – what they called the “IKEA superpowers” of democratic design and meaningful affordability.
“For most of us, the last 12 months have been tough – we get it”, Kirsten Hasler, head of marketing of IKEA Australia, told the audience.
While the perceived wisdom is that, during a cost-of-living crisis, people spend more time at home and therefore more focus on their furnishings, the truth is that a lot of the things sold at IKEA are still considered discretionary items.
“In reality our category has suffered over the past twelve months,” Hasler said of home furnishings, with sales down 14% across the sector. This compared poorly to a category like apparel, which has only seen a 3% drop during the last year.
However, with crisis comes opportunity.
“At IKEA, we love a step-by step instructional manual,” Hasler joked, before stepping through how the company thrives during tough times.
Democratic design, a pillar of IKEA’s philosophy, is central. When designing any product, low pricing is the first restrain; if the tiniest design tweak will increase the price, it won’t be considered.
Then the focus is on sustainability – “design is a change agent”, Patricia Routledge, head of communications at IKEA Australia, explained – and quality. According to Routledge, quality is felt when a product is used, when it is loved, when it is repair, and crucially, “when it is moved from home to home”.
The company’s popular BILLY bookcase has recently been redesigned with this last factor in mind, to make it more sturdy when being disassemble and rebuilt numerous times. Function and form are the other key design elements.
IKEA has also been doing home visits since the 1970s, in order to witness how people actually live. Routledge explains how, despite the product line being global, how it is presented within each store is a reflection of how people live in that area. IKEA Tempe will look notably different in-store to an IKEA in Perth.
Some of the fun insights gleamed from their public over the last twelve months is that 50% are planning to move or renovate within the next year, 40% say having an organised house makes them feel more organised in life – and 20% of us walk around home naked.
“5% think their houses are haunted,” Routledge added.
After all, as Hasler, pointed out, “IKEA was established during times of economic hardship”, with the company established in 1943, during World War II. The philosophy has always considered pricing first – with everything built around being the best quality for the lowest price point.
“IKEA solutions make homes work better so that lives works better,” Routledge said, of the company’s overriding philosophy.
“These aren’t necessarily public-facing slogans,” she explained, “but they are the essence of who we believe we are.”
Keep up to date with Mumbrella Daily
Got a tip?
Nathan Jolly is the Deputy Editor of Mumbrella. He joined the team in July, 2023.
Linkedin
topics
Ikea
IKEA Australia
Kirsten Hasler
Marketing
Mumbrella Retail Marketing Summit
Patricia Routledge
This has got to be one of the biggest loads of dross I have ever heard from marketing. And rather sad.
Design changes are not a marketing initiative. They are a manufacturing initiative that marketing take credit for. And for what? Sturdier cheap throw-away furniture? Sturdier Billy bookcases? This is their answer? For real?
Believing in your own essence is basically looking up your own behind. They even admitted they had no consumer facing messages. Just ‘internal’ messages so they can feel good about themselves. If this just doesn’t encapsulate corporate Australia today! “Tempe is different to Perth”. What a load of crap. It’s IKEA! Same around the world! A few store differences are meaningless. This is rubbish marketing dross. It is unconscionable to roll out this dross right after they just admitted sales were down 14%.
Ands it’s downright insulting to honest hard working productive people at IKEA that there is a layer of these elite idiots drawing huge corporate salaries whilst workers on the floor are probably lucky to top $30 per hour. After rent in Sydney (NOT close to Tempe) they don’t even have enough left over for crappy but sturdier! IKEA furniture.
I can’t believe a great company like IKEA is so out of touch with reality.
Like I said – SAD.
User ID not verified.
Have your say