How to manage a local furniture brand in an IKEA market

Out of the Shadows of a Big Box
Managing a local furniture brand identity in an IKEA Market

Boston’s IKEA Effect
This term describe the ripple effect of marketplace conditions that develop out an IKEA opening. These factors include shifts in shopping traffic, competitive pressures and displacement, but also include local retail profit opportunities.

IKEA in the marketplace
In soft economic conditions with low levels of consumer confidence, IKEA meets the shopping ideals of a broad base of consumers. By successfully managing a brand image with an ultra-competitive, underpricing model, IKEA has the potential to usurp market share from fellow national big box retailers such as target, to regional discount furniture giants such as Jordan’s, to smaller independent local retailers, alike. This marketplace challenge is compounded by IKEA’s unique orientation to important Boston consumer segments, including young adults and students. IKEA expects their Stoughton store to be one of the top in the nation and is investigating a land use deal for a second location nearer to the City of Boston.


Turning challenges into opportunity
Much more than the reports of furniture markets damaged by IKEA development, are the stories of great success through strategic marketing planning around its arrival. By its very nature, IKEA facilitates a trickle effect in local markets. It’s more than the simple fact that IKEA will draw shoppers into the region as Clive Cashman, a spokesman for IKEA’s North American operation well expressed the opportunity: “We have found that we and retailers like Home Depot definitely benefit from having close proximity to one another, but it also applies to smaller retailers.” This is the predominant story reported back from other markets as told in newspaper headlines such as “IKEA will boost local purchases to $400M” and “Giant furniture retailer could signal better times for beleaguered East Palo Alto.” Such consistent phenomenon gives rise to the important questions of what local business can do to ensure that they can avoid obstacles and maximize advantage under these market conditions.


Key Data Points
63% of Boston market adults say its important to them to shop local community stores
95% of Boston market adults say good customer services is a must
62% of Boston market adults seek quality and workmanship in their furniture purchase


Sample Quotation Abstracts

“We know IKEA has a weakness in upholstery, so we’re going after that and hoping to better compete.”

“IKEA makes it easier for shoppers to find Will’s Home Decorating. In the past, he would describe his store location, knowing that he was leaving customers befuddled.”

“The idea was the IKEA was attracting so many customers to Emeryville that there was bound to be spillover, especially of the higher-end customers who might grow disillusioned with IKEA’s do-it-yourself style.”


Highlighted Advertising Strategies
There are a multitude of strategies local retailers can employ to benefit from an IKEA arrival:
Differential the quality of your product over the big box expectation
Make your name and message visible in important traffic areas
Boston prefers locality, tell your local story
Reinforce customer loyalty
Get in front of new homeowners
Team Up: retailers in other regions have created cooperative success stories by creating a consortium of local furniture alternatives supplement IKEA shopping
Define your prospects and target with frequency

source : http://www.bostonglobe.com