IKEA probably has some of the most loyal customers—many of whom visit the store just to look around and take in the "ambience." In fact, some of IKEA's customers go beyond loyalty and into fanaticism. People will drive for miles to visit the nearest store. Some will queue outside a store's grand opening for hours—even days. They put up with the heaving crowds—which sometimes can get out of hand—and the self-service warehouse.

IKEA's displays must really be something special. Certainly, a lot has gone into their design, says Claudia Struzzo, deputy marketing manager for the company in the UK. "The amount of work behind our product development is extensive. For example, some may involve a child psychologist. We conduct studies across countries to see how people really do use their kitchens, living rooms, and bedrooms. And we try to predict future trends, too."

But the real attraction of IKEA is its brand promise to provide well-designed, quality products at affordable prices. IKEA represents the "democratization" of Scandinavian design. "I think we deliver on our promise," says Struzzo.

"Most home interior and DIY brands tend to be based on a rather rational proposition: it is about the range," she continues. "Have a big enough range and everyone will like you because you will cover a wide spectrum of functionality and tastes. We think our combination is unique in the market. There are lots of competitors in the UK. Argos competes on low price, Habitat on design, but none on the three aspects of design, functionality, and low price. The big DIY chains like B&Q and Homebase don't have everything under one roof. They are still behind in home-furnishing knowledge—that is, how to furnish a room that goes beyond the obvious. They are missing the inspirational side to their stores."

Haggerty blames the media for initially lumping ILVA with IKEA just because it is Scandinavian. "Some people are saying ILVA is IKEA for grownups; the place you go to after IKEA," he says. "But we do not want to be pigeonholed that way. What I would say is that no matter what age you are or price bracket you are looking for, you can come here and find something. We are quite different from IKEA—we don't do bathrooms and kitchens, for example—and they have a very limited range in upholstery. We are not an alternative but complementary. And we find that as soon as someone comes into our store they say they will never compare us to IKEA again."

ILVA has plenty of marketing experience in its ranks, so it should be able to carve out its market in a sector that is ripe for consolidation. Executive chairman Martin Toogood was formerly chief executive of Habitat and B&Q and a director of Heal's. Haggerty, as chief operating officer in the UK, has over 20 years of retail experience at B&Q, Superdrug, and Marks & Spencer, and has opened well over 100 stores in the UK. Indeed, part of ILVA's brand promise, according to a press release, is its leadership, although the consumer may not immediately identify this less visible element as a compelling reason to visit.

Certainly, ILVA will have to work hard at its brand awareness—and find out the best way to tempt new customers. Somehow ILVA has to convince consumers that Scandinavian décor is not synonymous with the Swedish giant, and that ILVA is not—like KIRP and HÅLL—the name of another set of IKEA shelves.     

[23-Apr-2007]