Ikea Invades America

Maddie O’Leary

Homework #1

3 October 2017

Ikea Invades America

1) The separation between low vs. high-end retailers allows American furniture retailers the opportunity to create their own unique consumer value. The low-end retailer consists of smaller discount shops, attracting price-sensitive customers (college students on a budget). Retailers such as Walmart and Costco fit well into this category. In contrast, high-end retailers focus their efforts towards luxurious store environments in order to attract affluent shoppers. In order to market to the consumer that values prosperity and comfort, high-end retailers offer huge inventories that compete heavily on the basis quality and service. They focus more on the aspect of a “lifetime” buy, rather than the discount and convenience that low-end retailers attract.

2a) Although IKEA is already known for offering low prices; their point-of-difference could be centered on the incredible quality, experience, and overall bold/whimsical products that come with a low price tag.  The childcare facility, IKEA restaurant, and customer service are all unique points of difference IKEA should capitalize on. Points of parity could be centered on the aspect of low price furniture. Low-end retailers typically offer a delivery service (sometimes free of charge) and set up the new furniture without consumers having to lift up a finger. This is a significant point-of-difference low-end retailers have over IKEA.

2b) For consumers who currently shop at high-end retailers, IKEA should put a lot of emphasis on their “unboring” approach to furniture. For example, “IKEA described its typical shopper as the sort of person who traveled abroad, liked taking risks, liked fine food and wine, had a frequent-flier plan, and was an early adopter of consumer technologies”. This open-minded mindset reveals the IKEAS point of differences lay in their contemporary approach to furniture shopping. Points of parity include: an emphasis on quality and high product selection. The points-of-difference the high-end retailers have over IKEA is supreme customer service, assembly/delivery, and “lifetime” quality.