retail news in context, analysis with attitude

Fast Company has a story about Swedish retailer Ikea, for years seen as a “dependable big blue box giant” that didn’t make headlines but also didn’t innovate much outside its lane - while it may have been recognizable and dependable, it also saw a nearly 40 percent drop in profits between 2017 and 2018, which pointed to the need for change.

“Gone are the days of making a day-trip out of the city and to the big box store, with plans to get everything in a one-shop stop, Swedish meatballs and hot dog lunch included,” Fast Company writes. “The outdated draw of big-box convenience has been trumped by the speed and ease of online shopping, and the retail game has gotten more competitive as a result … Ikea’s product line has long catered to small, urban living spaces; the scale and location of its physical stores have not. Next year, Ikea plans to roll out 30 new Ikea stores in urban markets–including one in Manhattan. This transformation has already begun in London and Warsaw.”

At the same time, the story says, “It’s no secret that Ikea’s online shopping experience is in dire need of improvement. Other big retailers, like Target, are in the same boat. Ikea’s struggles to master digital platforms reflect larger shifts in the mass retail sector, and all of the top players recognize the investments they’ll need to make to stay in the game.”

And, Ikea is trying to rethink its approach to design - again, because the market is forcing it to: “In the age of Amazon and social media - where every consumer desire can be planted and satisfied with a series of clicks - originally crafted, handmade designs are the new luxury: an artful antidote to the serialized, industrially produced cookie-cutter items and startup goods that are likely to end up in everyone’s homes. The resurgence of ceramics among makers and independent product and furniture designers—as well as the high-end collectibles art market—is no fluke.”
KC's View:
It doesn’t matter how iconic you are. If you begin to think of yourself that way, the long decline has begun.

I always remember what Norman Mayne of Dorothy Lane Markets - a company often referred to as being both iconic and legendary - once told me. That's all very nice, he said, but "legendary is what we were yesterday. Today we have to earn it all over again.”

There’s also the great line from Jack Welch: ““If change is happening on the outside faster than on the inside, the end is in sight.”