Commentary & Analysis
What Can IKEA Teach us about Mail and Fulfillment?
By WhatTheyThink Staff
Published: November 23, 2005
November 23, 2005 -- Swedish retailer IKEA , according to Business Week, "is a global cult brand; a state of mind that revolves around contemporary design, low prices, wacky promotions, and an enthusiasm that few institutions in or out of business can muster." So what does it have to teach printers diversifying into mail and fulfillment services? IKEA's success can be measured in part by the company's 226 stores in 33 countries, sales from which rose 15 percent to $17.7 billion for the fiscal year ended August 31st. Looking ahead, IKEA plans to add 19 of its 300,000 square foot, distinctively blue and yellow buildings worldwide over the next year. Practices to emulate Business practices that distinguish IKEA from other retailers, and which printers should emulate, are constant cost-cutting measures, efficient warehousing practices and outstanding contemporary design. Furniture and other items are modern and stylish. Even successful products are continually refined to reduce production and warehousing costs. BW reports the retail price of IKEA's Klippan sofa has dropped 40 percent since 1999, currently selling for around $250, and will drop to $202 next year. To date, IKEA has sold 1.5 million Klippans worldwide. Continuous process improvements may save your customers money and also directly affect your bottom line The connection between a retailer's and a printer's cost cutting and process improvement practices makes sense. After all, continuous process improvements may save your customers money and also directly affect your bottom line. But, you ask, how do contemporary designs relate to printing, mail and fulfillment? Each IKEA store carries 7,000 items, discontinuing one-third of them every year (but not the Swedish meatballs). By continually refreshing the product line, they give customers more reasons to return. Similarly, your digital presses as well as ink jet and laser printers enable you to customize your customers' printed pieces. Coupled with variable data printing techniques, your mailing and fulfillment operations will enable clients to target marketing programs to the needs of prospects and customers. By enabling your clients to frequently refresh their printed materials, you give them more reasons to stay--and grow--with you. IKEA researches new product ideas and cost-cutting concepts for months before the items reach the showroom floor. Designers go to customers' homes to understand how they use the items and then adapt Swedish designs to local preferences. You, too, must collaborate with the client to understand how the intended recipient will use the printed piece. While you may not visit the end user, that knowledge allows you to produce not simply what the client asks but to also offer suggestions based on your technology that will improve response rates. Whether contemporary furniture or meatballs interest you, walk the store with your operations hat on Go to your nearest IKEA, even if it means taking a six-hour drive just as some of its most loyal customers do. Whether contemporary furniture or meatballs interest you, walk the store with your operations hat on. Note how a marked path leads customers past all of the display showrooms, with space to stop and look without blocking other customers, to the warehouse and check out. Check out the warehouse layout and especially notice how product packaging minimizes freight costs while enabling the customer to cart it home easily. I guarantee that after every visit to IKEA you will come away with numerous ideas on how to improve your production facility and product offerings. Online version of the