Wednesday 7 December 2016

Swede smell of success: how IKEA plans to nail Southsiders

We may be 'over-shopped', but a click 'n' collect store is sure to woo customers

Published 22/05/2016 | 02:30

Flying the flag: Amanda Kelly from Dublin celebrates the opening of the IKEA store in Ballymun in 2009.
Flying the flag: Amanda Kelly from Dublin celebrates the opening of the IKEA store in Ballymun in 2009.
Flat-pack: IKEA is planning a second Dublin store in Carrickmines.

As Ireland's flat-pack king, Jonathan Treacy can knock together one of IKEA's iconic 'Billy' bookcases in just 20 minutes.

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With news that the home furnishing giant is set to open its second store here this summer, now he's hoping to assemble a few more.

Eight years ago, just before the Swedish juggernaut opened its doors on Dublin's northside, the dad-of-four, along with his brother Ken, quit his sales job to set up his own furniture assembly business.

Today, as the company prepares to launch its first Order and Collection Point this side of the Irish Sea, he gets phone calls from homeowners throughout the land wrestling with its infamously convoluted instruction leaflets.

"To be honest, IKEA stuff is really quite simple to assemble," tells Jonathan of Flatpack.ie. "You just take it out of the box, drill the bits together and put it up. Some people just have a mental block about it or they had a bad experience and they don't want to go there again, which is understandable. I suppose we just take the pain out of it.

"If you said to me 10 years ago that this is what I'd be doing, I'd have laughed at you," he adds. "I wasn't even handy with my hands. I was working in sales, but I wanted to start up my own business, so this is the idea I came upon and now I suppose I'd be [an] expert in it."

Soon to bookend the busy M50 motorway, the Scandinavian sensation this week revealed plans for its latest Irish outlet in Carrickmines retail park, just over 30km away from its flagship Ballymena store.

Despite being 20 times smaller than the D11 labyrinth, bosses outlined how the new 'click and collect' concept in the capital aims to make its products "more accessible to many more people".

As 'Kallax' shelves and 'Malm' drawers pop up in homes across the country, retail consultant Eddie Shanahan revealed he's not surprised by the Viking invasion.

"Obviously they've been testing the market here for a while and one store is not enough," he says. "So they're responding to the demand and offering people on that side of the city, and that stream of people from the south of the country, an opportunity to shop there.

"I think that's probably a sensible response because where once customers were loyal to stores, now stores have to be loyal to customers.

"Click and collect online has been well established so I think people who are familiar with the product will find that a very useful service," he believes. "There are probably very few houses in the country now that don't have a piece from there in their inventory."

Indeed, while the brand may be going south, business certainly isn't.

Operating a single store in the Republic, last year IKEA Ireland's pretax profits almost doubled to €13.2m as sales soared by 17pc.

Globally in 2015, the group's 330 stores spanning 28 countries were visited 771 million times, while its website clocked up 1.9 billion clicks.

After hammering out a 10-year lease agreement worth an estimated €6m with Irish property group IPUT, now recruitment is under way for 30 staff to join its newest Dublin branch, bringing the number of people employed by the company here to almost 500.

"Value for money is not just about price," explains Shanahan about the flat-pack favourite. "It's about environment, selection, service - and, to be fair to them, I think they do all of those reasonably well.

"You're not being asked to pay market prices for junk; you're being asked to pay lower-to-mid-market prices for reasonable quality. And despite the fact that we all like to joke about IKEA, it's actually quite easy to assemble.

"For people going out there, it's a day out, and I think they established that very, very early on," he continues.

"There's children's entertainment, there's a cafe and then there's a whole selection of seasonal furniture. They've thought it through from start to finish."

Elsewhere in Las Vegas this week, excited customers queued for up to 48 hours to get a glimpse inside the retailer's brand new 351,000 sq ft offering, and try to nab a free sofa.

Camping out in the sweltering Nevada heat, twenty-something Alex Kramer even described perusing the aisles at IKEA as "bucket list" stuff.

He told ReviewJournal.com: "It's not just a couch, it's also like a bucket list experience thing I want to do so I can say I slept outside a store for two nights in a tent with random strangers, and then I'll have a couch to prove that I did it."

Billed as a "planning studio" for bigger buys such as kitchens and wardrobes, at 15,000 square-feet, the Carrickmines unit is unlikely to elicit quite the same level of hysteria when it opens in The Park soon.

Although fans of the megachain are sure to be happy to hear they'll be able to buy smaller IKEA bestsellers, including its beloved meatballs, on the spot in the store.

Previously launched in the UK last year, there are already two Order and Collection Points in Aberdeen and Norwich, with another on the way to London.

While the collection fee for the Irish branch has yet to be confirmed, it's expected to be in line with the British rate of between £3.75 (€4.88) and £15 (€19.51), depending on the size of the parcel.

As consumers "move from laptop to phone to shop seamlessly", Eddie Shanahan welcomed the multichannel format to Ireland - but warned that even soft furnishings can be a hard sell.

"It's probably true to say that Ireland is still on the verge of being over-shopped," he argues. "We have more shops than we really need. Some of the chains don't need to be in every village in Ireland and they're suffering because of it.

"[At the same time], people shouldn't say, 'Oh, there's IKEA, they're going to close all the shops now and go online'. They're not and it would be foolish for retailers to do that because it's not easy to create an experience online like it is in shops.

"You can't smell Chanel No.5 online and you can't sit in the best sofa online, so the interplay between the two is important."

Starting from €50 for delivery and €30 for assembly, Flatpack's Jonathan Treacy - who operates within a 100km radius of Dublin - is expecting to be flat out this summer, anyway.

"We go down to Naas and Newbridge and up to Drogheda, places like that," he says. "A lot of my customers would assume that you can buy IKEA stuff online [already]. But you still have to go out to the store to collect it, bring it home and assemble it.

"The new shop may affect my delivery business for a while, but I'd [fore]see a big surge in the assembly side of the business. Why would you want to spend a Saturday afternoon assembling stuff when you can get somebody in and they'll have it done in two hours?"

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