IKEA Digital

Part
01
of two
Part
01

SWOT - IKEA

OVERVIEW

IKEA is a company that is synonymous with building prefabricated furniture and Swedish food. The stores are always massive warehouses that have furniture set up and arranged so that customers can see what the products could look like in their homes. The company has long been known for their unique furniture and has made a place for themselves in many countries retail market.

FINDINGS

STRENGTHS

One of IKEA's major strengths lies in affordability of their products and constant innovation. Innovation is a regular driver of IKEA's business, and they pride themselves on their ability to keep up with the times. Another strength of IKEA is that they have created a focus on sustainable products. One example of this is that all the cotton IKEA uses is from sustainable sources. In 2016, 61% of the wood that IKEA used came from sustainable sources, and their goal is to have 100% come from sustainable sources by 2020. In their 2017 annual report, IKEA mentions throughout the report that one of their primary goals is to create not just a viable business, but a sustainable product line and economy as well.

IKEA is also frequently on the forefront equal rights for all. In March 2018 they reported on the women in their company, and these were some statistics they mentioned:
-49% of their company leaders are women,
-the work with artisans across India to empower them through their craft,
-the IKEA Foundation gave a 3.5 million euro grant to PRADAN so that they can help women in India find their voices, and
-they also work in 12 other countries social enterprises (both first world and third world countries alike).
IKEA's strengths, in general, seem to lie in listening to what their customers want and the trends in what customers are looking for in products. Financially the company did quite well last year, and their revenue grew by 1.7%. This amounted to total revenue of 36.3 billion euros, and retail sales accounted for 34.1 billion of the total. Another strength of IKEA is that they are continually re-evaluating themselves through customer service and yearly reports detailing not just their successes but also their weaknesses and how they will work on them.

WEAKNESSES

IKEA has operations all over the world in as many as 30 different countries. Each country has its own rules and regulations which won't always line up with other country's rules and regulations. This can cause issues in which products can be sold in which nations and can increase the cost of manufacturing. The increase in price can be from creating products that are only sold in specific markets or having to change things about their products to fit the country they are to be sold in.
There have been a few moments of bad press lately for IKEA which doesn't help their overall bottom line. Among the issues were corruption in Russia, environmental issues and an all-male catalog that was released in Israel that appeared to make fun of orthodox Jews. Problems with negative press and scaling their business to fit other countries are among the most prominent weaknesses that IKEA faces.

OPPORTUNITIES

IKEA has not yet expanded their stores to Africa, but they do have operations there. While some countries in Africa would not be suitable due to low-income issues, countries like South Africa could work well for IKEA. Also, countries, where the income is low but not so small as to be poverty level, would likely appreciate IKEA due to the affordability. Among the countries that might benefit from this is India where IKEA has operations. Another reason to move into countries like India could also be that India has a high population and many people would be looking for unique or new ways to store their items.
IKEA has somewhat recently stepped into the sustainability trend, but for the most part, their success is in cotton. Expanding their sustainability to more products and areas of the company could increase customers likelihood to shop. Advertising their sustainability can also help to generate more growth because it is something customers are looking for. Some customers may be more willing to travel and spend a little more for a product that will last and is made from sustainable means. Another thing that IKEA should advertise more is what they do to help women and people in low-income countries. IKEA does fantastic work giving jobs to people that struggle to find them. The tasks also frequently involve crafting or using skills from the person's culture to create products for IKEA. They also encourage their staff to help better the world around them, and this can be seen the support some of their workers have given others in stressful situations. IKEA does terrific work in the areas of sustainability and equality and being more forward about this could not only help sales but the overall company image as well.

THREATS

If you go on the internet, you will see all kinds of ways to DIY just about anything. This is the most significant threat to IKEA because customers that think they can build a better lasting and cheaper product themselves. This DIY trend takes away customers that otherwise might have shopped at IKEA. One of IKEA's hallmarks is that you can build the furniture yourself with prefabricated parts, and the DIY trend cuts into part of their brand image.
Countries laws don't always remain the same and as the rules change IKEA must change with them. Some of these laws can involve higher taxes on imported materials which could raise the price of goods at IKEA. As the prices go up, customers are less likely to buy the products which will cause IKEA's revenue to go down. If people have the choice between a more expensive and lasting product and a cheaper product that will last a little while customers are going to go for the more affordable option. If IKEA can keep itself competitive and maintain their affordability, they will remain successful.
Another threat related to the increasing cost of IKEA products is the increasing cost sustainable materials. While sustainable materials are better, in the long run, they are more expensive to procure and use. This causes the cost of products to increase to cover the heightened price in materials. So while there is an opportunity in creating more sustainable products, there is a fine line between opportunity and a threat involving the cost of the product to the customer.

CONCLUSION

IKEA's strengths lie in their innovation and listening to what their customers want, one of these being more sustainable products. Their weaknesses fall into negative images issues that have happened in different markets and problems maintaining cost while creating sustainability. Their opportunities include creating more sustainable materials and products and their threats are the possible increased cost of products to do changing laws.
Part
02
of two
Part
02

IKEA - Digital Advertising

The following are five examples of recent digital advertising for IKEA: the app IKEA Place, the ‘Lion Man’ advertisement from the UK, the app Matcher’s Keepers, the most recent installment of the ‘Where Life Happens’ advertising campaign from Sweden, the Back to School Campaign from 2017, the “Bring Life into Your Room” advertisement from Belgium. All examples have been released within the last nine months. We will take a closer look at the examples below.

IKEA PLACE
IKEA Place is an augmented reality (AR) app that was released in September of 2017. The app was made available in the Apple store, and only worked for users of iOS 11.

IKEA Place was designed to allow users to experiment and share interior designs they created, using products that were 3D and true to scale. The app uses your phone’s camera to scan a room, and then lets you decorate the room with IKEA furniture. This allows the users to try various styles, products and colors in a true-to-life setting that’s easy and accessible. The app has such a high degree of realism that users can detect the textures of fabrics used and how the play of light in a room effects design choices.

More than 2,000 IKEA products were available to use in the app at the time of release, focusing on larger pieces of furniture, such as sofas.

LION MAN
The ‘Lion Man’ advertisement from July 2017 is part of Ikea’s Wonderful Everyday advertising campaign. The ad features a man in a lion relaxing, reading and watching television in a beautifully designed room. The man is later revealed to be taking a break from his child’s birthday party. The theme of the commercial seems to be that stressful situations can be handled with proper rest and relaxation.

The campaign was designed by the agency Mother London, a long-time collaborator with IKEA.

WHERE LIFE HAPPENS
In October of 2017 the Where Life Happens campaign brought consumers a touching look at a man in modern Sweden visiting his mother in a nursing home. The man lovingly wraps a gift for his mother who sits sadly in a nursing home. When the son arrives, he dances with her, recalling her to life. The gift he gives her is a photograph, in an IKEA frame, showing her when she was young. The action is set to a melancholy version of “Let’s Dance” by David Bowie.

Some of the themes in this quite relatable commercial deal with aging (and coping with a parent’s aging), love and sentimentality.
The advertisement was created by the Akestam Holst Agency and was directed by Martin Werner.

BACK TO SCHOOL CAMPAIGN
Ikea partnered with MEC to bring a portion of it’s 2017 Back to School campaign in a specially formatted advertisement on Snapchat, targeted to millennials. Snapchat has previously been thought of as difficult outlet to use, as it’s more of app to use amongst a group of friends, rather than a larger audience base.

The commercial features Superfruit, a web comedy duo, who envision what their dorm rooms would have looked like, had they attended college, and choices they would make while living in their dorm rooms. Snapchat users can play along by selecting taste and action choices at the bottom of the screen. Viewers are invited to click through the link at the end of the video to see even more choices from IKEA.

The video was not only a paid advertisement, but the members of Superfruit also posted the video to their accounts.

BRING LIFE INTO YOUR LIVINGROOM
Following the 2018 Winter Olympics, IKEA released an advertisement in Belgium featuring a couple skating, in their socks, through their beautifully decorated living room to a sentimental French song. The ad points out the different products throughout the apartment which can be purchased at IKEA.

The couple are actually former figure skaters, and their sock skating is quite graceful. Here again we see a sentimental portrait of aging, just as we again see the touch of humor as the couple skates in their socks.

The commercial was directed by Joe Vanhoutteghem for the agency DDB Brussels.

CONCLUSION:
IKEA has brought their digital advertising to multiple platforms within the last several months including Snapchat, an AR app, and videos designed to be played on digital platforms. The advertising relies on themes such as sentimentality, aging, humor and love.

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