Chapter 15: Retailing

IKEA is a home-furnishing company and has a lot of retailing stores around the world. All IKEA’s retailing stores are classified as destination stores which mean that customers visit IKEA as their main destination. Their stores are located in isolated place but accessible from urban area. This cuts the cost of the land. Also, there are few competitors.
Destination stores are usually a little bit difficult to go because they are a little away from urban area. Customers have to drive a car or pay more money for trains. However, IKEA Brooklyn store that I visited is very easy to go because they are doing free ferry transportation service on weekends. It took about only 15 minutes and also we were able to see nice view of Manhattan Wall Street and Statue of Liberty!



Free Ferry

In addition, IKEA has their original Swedish restaurant. Because of isolated location, there is no restaurant around it in order to prevent customers to back to restaurants in Manhattan.

Inside the store, I found out that IKEA is doing Trading Up strategy which persuades customers to buy more expensive products than ones they intended to buy before coming. IKEA put high quality and expensive products and cheaper products together in the same place. Because of this, customers are tempted to buy higher quality products because they can easily find out the differences of those products. (example in following picture: Left Shelve $29.99 : Right Shelve $69.99) In addition, customers can compare and contrast products on in IKEA. They do not have to go to other stores to look for cheaper products or higher quality products because IKEA’s products are so wide in price range.

 

IKEA's retailing stores are designated to make customers happly while shopping.