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What retail is hired to do: Apple vs. IKEA
[Quote]:
“Within five years after discount retailing pioneer Korvette’s opened its first store in 1957, over a dozen copycat discounters had emerged. In contrast, the giant discount furniture retailer IKEA has never been copied. The company has been slowly rolling its stores out across the world for [close to 50] years; and yet nobody has copied IKEA.
Why would this be? It’s not trade secrets or patents. Any competitor can walk through its stores, reverse engineer its products and copy its catalog. It can’t be that there is no money to be made: its owner Ingvar Kamprad is the third richest person in the world. And yet nobody has copied IKEA.
Our sense is that the other furniture retailers have followed the positioning paradigm and defined their business in terms of product and customer categories, which are readily copied. Levitz Furniture, for example, sells low-cost furniture to low income people. Ethan Allen sells colonial furniture to wealthy people.
IKEA, in contrast, has organized its business around a job to be done: “I need to furnish my apartment (or this room) today.” When this realization occurs to people anywhere in the developed world, the word IKEA pops into their minds. IKEA is organized and integrated in a completely different way than any other furniture retailer in order to do this job as well as possible.”
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At IKEA, the job to be done is claimed to be “I need to furnish my apartment (or this room) today.” At Apple retail stores, it’s “to be a place to discover [unfamiliar products like the iPhone and iPad], to learn about them before they are purchased, and learn how to get the most out of them after they’re purchased.”
It strikes me that one of these is not like the other, in particular, the customer’s need being filled in the Apple retail store isn’t mentioned. Discovering what an iPad is or does isn’t a basic need the way furnishing your home is.
There are two angles that don’t come up in the article: 1. IKEA has many strengths, but I’d bet if you asked customers, the #1 they’d mention is price, or quality-for-price in particular, and the #2 might be the breadth of the product range.
Which leads to #2: IKEA strikes me to a large degree as a highly optimized supply-chain. I bet it’s hard to replicate what they do without having their scale. Say, where have we been hearing that recently? Oh yeah, Apple…
They didn’t define the Apple “job to be done”, except implicitly by suggestion that all other phone/computer/tablet builders are following “define their business in terms of product and customer categories”, which Apple apparently, just like IKEA, does not. Yes, it breaks down when you try to analyze what the Apple “job to be done” is in minute detail, but the overarching point that Apple is doing things differently, just like IKEA, is worth learning some lessons form.
Dediu puts out a lot of interesting stuff, but if you ask me, this isn’t it. “Hey look, two retailers that are unusually successful in their respective markets, and what a surprise, they do unusual things!”
Duh.
IKEA has developed the retail idea of throwaway style. Like that Spanish clothing store Zara. Their styles change radically and often. Their stuff is cheap enough to change frequently, good enough to keep for a long time if you are broke. A lot of money goes into the Stichting INKGA foundation which is basically about design.