IKEA's Poor Delivery? All Part Of Their Master Plan

IKEA may be masters of cheap furniture and 15-step assembly instructions, but when it comes to home delivery that efficiency breaks down. How can the Swedes prove so adept at showroom layout but so inept at transport? Jessica Winter suggests that it may actually be part of their grand plan in Slate.

Winter's Homeric tale of her IKEA home delivery experience to get a set of Billy bookcases cost her almost all the time and frustration she could stand, but it led her to a few insights into the thinking of a massive DIY furniture retailer.

"As anyone who has found herself dissolving into the hypnotically well-appointed cattle chute of an Ikea showroom can tell you, this is not a company that does things by accident," she wrote for Slate.com. "The who's-on-first shambles of Ikea delivery isn't the flaw in the Eivor Cirkel rug. It's instead a case study in how a large retailer can succeed by failing."

While the psychological gamble that waiting on and working harder for your product will increase the enjoyment you get from it may be too risky for most retailers, there are a couple that are much more tangible, namely IKEA's audience targeting and insulation from the Amazon threat.

As Winter points out, IKEA has burrowed deep into the psyche of its target customers. They're a thrifty, hard-nosed bunch that holds savings in higher esteem than their time.

"IKEA's target customers are consumers who prize 'value,' and are willing to spend their own time to save money," Santiago Gallino, a professor at the Tuck School told Winters. "Asking the customer to spend time to come to the store is consistent with this segmentation strategy."

Why bother expending the resources to equip a fleet of trucks that can be ready to go at a moment's notice, especially when many of them will be idle for long periods of time? Instead, IKEA has designed its business around a customer base that would prefer to cut out the middle man and get what they need from the warehouse themselves.

Perhaps most unique to IKEA, though, is the fact that Amazon's 24-hour delivery holds little to no threat for their business. While every other brick-and-mortar retailer is shaking in their shoes at the thought of doorstep delivery, IKEA seems immune.

"Amazon can disrupt anything that doesn't have to be assembled or curated," Harvard Business School professor Frances Frei stated simply. The furniture retailer sits comfortably in that niche. And as long as they do, they might just be able to focus on their Swedish meatballs and leave the speedy delivery to someone else.

For more:

- See this Slate story

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