How Ikea Became America’s Furniture-Selling Powerhouse | #Waccabuc Real Estate

 

Ikea fired a shot heard round the retailing world when it landed on American soil in 1985, opening its doors in a shopping mall just outside of Philadelphia. I was there—writing a story about the Swedish retailer for Metropolitan Home magazine, where the store’s advance buzz had preceded its arrival. Amazingly to a cynical New Yorker, reality more than met the hype. The low prices were awesome: who ever heard of industrial steel towel racks selling for $5 to $24? Where could you find a three-seat sofa for $329? (Even more amazingly, similar products—the 1985 pieces are no longer around—sell for roughly the same prices today).

The designs themselves were clean-lined and appealing in a Euro-Style way. Even more impressive was the obsessive attention to detail: all the fabric in the store was sewn with the same color thread. Everything was in stock unassembled, of course—and tags included the size of the packing carton, even indicating thedimensions that would fit into specific car models.  Then there was the playroom for kids—a safe place to leave them so parents could shop at their leisure. A cafeteria served Scandinavian food that was cheap and tasty. It was the most user-friendly store I had ever seen.

ikeaads90_91.jpg
Ikea ads from 1990 and 1991.

Shoppers apparently thought so, too. The crowds were overwhelming. The store had to close its doors because it had run out of merchandise, and it posted a sign saying, “Ikea is full. Please come back next week.” The company rang up $50,000,000 in sales its first year.

The retailer expanded slowly, largely because it hadn’t found a way to meet the overwhelming demand. Before it could open more locations, it had to make sure that there would be enough inventory for them.

When Ikea finally arrived in the New York area, opening an Elizabeth, New Jersey, story in May 1990, shoppers were ready.Twenty-seven thousand people visited it on opening day, buying close to $1.5 million worth of furniture. By the time the first weekend was over, the store had sold over $3 million worth of Swedish-designed products, clogging major traffic arteries and filling auxiliary parking fields to overflowing.

In August of this year, the company opened its 40th U.S. store in Merriam, Kansas. St. Louis and Las Vegas are on the drawing boards. And it has aggressive plans to open even more in the next five years. “We see 25 possible markets,” says Rich D’Amico, Ikea’s deputy marketing manager. For new store locations, explains Joseph Roth, Ikea’s expansion public affairs manager, Ikea seeks an area with a population of two million people living within a 40 to 60 mile radius, or, alternatively, a 40 to 60 mile drive time.

 

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