The E-Commerce Model of IKEA
Introduction
IKEA, the Swedish home furnishing retailer specialising in affordable flat pack furniture is known as the world’s largest retailer of well-designed, inexpensive and functional furniture and products for the home. IKEA opened its first furniture showroom in Sweden in 1953, and now has over 345 stores in 26 countries worldwide. As the importance of online presence grows, IKEA has also launched over 13 successful e-commerce websites in many parts of Europe, UK and the US. It is undeniable that a core reasoning for their continued success is due to their unique business and e-commerce model and solid core values, which will be discussed further in this report.
IKEA’s E-business Model
IKEA’s Target Audience
IKEA’s vision is to offer ‘a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.’ Because of their cost focus, they have a very broad target audience of anybody with a price preference, appealing to both business-to-consumer and business-to-business categories. IKEA itself has described its target market as ‘‘young people of all ages’’ (Martenson 1987,p.15) including students who may not be able to travel to the more rural locations of the typical IKEA retail store, low to middle income families who may not be able to visit due to household commitments in the day time, and young urban professionals who may not be able to visit the store during standard store opening hours. In the business-to-business context, IKEA’s e-commerce website targets mainly small to medium businesses from restaurants to hotels looking for multiple cheap and chic furnishing products, where it is more convenient to get the products delivered straight to the business, than to self-transport the goods.
Value Proposition
It is clear that IKEA’s value proposition is based around selling quality, stylish, innovative but low cost furnishing products. Their unbeatable low price is
IKEA, the Swedish home furnishing retailer specialising in affordable flat pack furniture is known as the world’s largest retailer of well-designed, inexpensive and functional furniture and products for the home. IKEA opened its first furniture showroom in Sweden in 1953, and now has over 345 stores in 26 countries worldwide. As the importance of online presence grows, IKEA has also launched over 13 successful e-commerce websites in many parts of Europe, UK and the US. It is undeniable that a core reasoning for their continued success is due to their unique business and e-commerce model and solid core values, which will be discussed further in this report.
IKEA’s E-business Model
IKEA’s Target Audience
IKEA’s vision is to offer ‘a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.’ Because of their cost focus, they have a very broad target audience of anybody with a price preference, appealing to both business-to-consumer and business-to-business categories. IKEA itself has described its target market as ‘‘young people of all ages’’ (Martenson 1987,p.15) including students who may not be able to travel to the more rural locations of the typical IKEA retail store, low to middle income families who may not be able to visit due to household commitments in the day time, and young urban professionals who may not be able to visit the store during standard store opening hours. In the business-to-business context, IKEA’s e-commerce website targets mainly small to medium businesses from restaurants to hotels looking for multiple cheap and chic furnishing products, where it is more convenient to get the products delivered straight to the business, than to self-transport the goods.
Value Proposition
It is clear that IKEA’s value proposition is based around selling quality, stylish, innovative but low cost furnishing products. Their unbeatable low price is