Twenty six years ago, March 1990, I was driving into beautiful downtown Burbank, California. It was a typical perfect seventy five degree winter day that my mid-western friends don’t want to hear about. As I took the freeway off ramp I noticed cars backed up on every surface street, police waving traffic to side streets and I thought, oh, damn, another big earthquake.
I maneuvered my way around the traffic mess and got to my early morning sales call. No earthquake, just a giant store opening with thousands of people standing for hours just to get inside. No, it wasn’t a Trump rally. It was the grand opening of a store I never heard of in 1990.
When I drove away on S. San Fernando Boulevard this is the store in Burbank with the strange name that still attracts thousands of people a day through their front doors.
I made a point to check out the giant Swedish home furnishings store my next time in Burbank. I thought it was both weird and wonderful. Cool looking, cheap looking, nice looking, all fit the various furniture items.
I walked through their arrowed-maze wondering if I would ever see my family again. I’m not good at mazes. Here’s the typical store layout:
It didn’t take me long to also figure out these folks were geniuses. Everything they made was packaged in flat, fit in the car, cardboard boxes. Of course Some Assembly Required. That’s a turn-off to my skill sets. I can’t pound a nail in straight or saw a board on a line. However IKEA is a promoter of Allen-wrench assembly. Okay. Not bad.
Since it takes about as long as a Safari to see everything, they have a Swedish restaurant to enjoy Swedish meatballs, Swedish waffles, Smoked Swedish Salmon and lots of other goodies. In the summertime for every adult meal purchased one can get two free children’s meals. Yes they have a Kale salad for you people who just won’t stop it.
Over the years I have watched this most profitable company slowly expand around the globe. Ten years ago they built a 2 million square foot distribution center on 80 acres of land just south of Bakersfield. Being my new neighbor I started reading more about their philosophy, manufacturing facilities, and new retail outlets. There are now five IKEA stores in Southern California and Burbank is still the closest to Bakersfield.
Unlike Wal-Mart or Target they sell only their own brands. Their main thought process is volume. They sell one BILLY bookcase every ten seconds.
When they expand they send study groups into people’s homes, do detailed demographic lifestyle studies and take their time. Unlike Target, who thinks they can plant their bullseye anywhere and make money, IKEA takes months and sometimes years to be the right fit for each market. Target had to pull all of their stores out of Canada because they didn’t understand Canada.
Last year IKEA opened their first store in South Korea. It was SIX years in the planning stage. Six years! The store is 624,000 square feet or 3X the size of a Wal-Mart Supercenter. They designed special kitchens to accommodate kimchi refrigerators used in typical Korean homes. IKEA did their homework and stocked metal chopsticks which are preferred in Korea. Every item, some 10,000, was made to fit the Korean marketplace.
Eight of its ten biggest stores are in China so they have figured that marketplace out correctly.
A few years back the management team noticed a large volume of their vases were being sold in America and they couldn’t figure it out. When they checked they found that Americans were buying vases. Why would one American shoppe buy six or eight vases at a time? We thought they were water glasses. Unlike most countries we like ice in our water glasses and their vases were perfect. We never bought their regular European water glasses.
About the time in 1990 I was wondering around the Burbank IKEA the management team in Sweden was thinking they should pull out of America. If they didn’t even know our water drinking preference what did they know? Instead of pulling back they decided to institute an acute study-team for every market. That’s why it took six years before they opened their Korean store. Now they are ready to invest $2 billion dollars in India over the next ten years opening ten stores.
I mentioned earlier I’m not an “Assembly Required” kind of guy. With IKEA assembly really is just an Allen wrench. Their management team has an internal name for every item that takes too long to assemble. It’s called a “Husband Killer.” That’s a company I love.