IKEA: CONTINUOUS MARKET RESEARCH IS ABSOLUTELY CRUCIAL FOR A SOUND BUSINESS DEVELOPMENT
During the past decade the global market for rugs has been growing steadily and even though rug sales at IKEA have grown as well, it has not matched the general growth figures of the segment, leading to IKEA losing market shares. Therefore IKEA a few years ago set out to turn their rug business into a destination business for IKEA where updated offer, quality and price levels would be more market relevant, ultimately leading to increased sales. The aim was to focus on living room rugs first hand.
Anna Weiner Jiffer, then Business Leader Rugs at IKEA, at present Business Area Manager, was recommended to contact Opticom International Research for a market research project in early 2009: “Our goal was to increase sales. We wanted to know which qualities and price levels had the greatest potential in different markets” she explains.
When meeting with Opticom’s project team, it was agreed that the most suitable method for this type of survey was a so called Consumer Lab® which is a unique market research tool that focuses on the key actors in the retail business: the end consumer. A total of 301 face-to-face interviews were conducted with customers on location in three different IKEA stores in Frankfurt, Germany; Marseille, France and Shanghai, China.
In a comfortable setting, professional Opticom interviewers discussed with respondents in their mother tongue over their opinions and demands on living room rugs, their buying behaviour and after sales experience as well as showing them a number of rug samples for further evaluation of perceived quality and price levels.
Anna explains that they did find where the biggest potential from a quality and product perspective lies and continues: “We found qualities that were new to us, in addition to new price levels”. The living room rug is of course not a new segment to IKEA as such, but thanks to this specific survey combined with other measures, the IKEA Rug department got this product segment well-defined thus enabling Anna and her team to get more specific in their product development.
“We have been able to create a more relevant product offer and have increased our sales, so this investment in both money and time has really been worthwhile” Anna states. She explains that Opticom has helped them to ask both IKEA’s existing and potential rug customers the right questions and also to both conduct the survey and analyse the results. From there they went on to work on their internal strategy and its execution: “Internally we have had workshops around the presented project report and we have taken it further from there, always establishing the changes within our organisation.”
Concerning the importance to continuously do market research Anna Weiner Jiffer emphasises that it is absolutely crucial for a sound business development: “Maybe one does not always have to dig all that deep in one specific business area every single year, but definitely every second or third year and in fast moving businesses sometimes even more often. We are after all working with trends, just like in the fashion business”. She stresses that it also takes time and effort to digest all the information and that therefore, the vast statistical data and interview transcripts delivered by Opticom beside the very useful report, has been a very valuable source of additional information: “It takes a while to squeeze all of it out!”
Answering the question on what was the best thing with the project; Anna explains that Opticom has been able to obtain analyses that were directly useful and applicable in their organisation. The results were presented in a clear and accessible way and were ready to put into use in the product development and range presentation in store. “We got the answers we needed, not the answers we wanted and that is important to point out: we did not do this survey to confirm anything, but to find out how things stand and that we achieved. So I can gladly recommend Opticom to other companies, and I always do!” Anna Weiner Jiffer concludes.
In the fall of 2010 Opticom made a follow-up survey, comparing four different IKEA stores; two with a renewed rug department and two with the original design, in Sweden and Germany respectively. The in-depth interviews with consumers concerning their perception of the rug departments, store experience, product offer and display gave feedback on the changes already made as well as pointing out new areas of improvement.
During 2009 and 2010 Opticom has conducted further Consumer Lab projects for the IKEA Window Coverings and Bed Textiles business areas, interviewing an additional 850 consumers at IKEA stores in the UK, France, Germany, Italy, Poland, China and the USA.