‘It was a disaster of biblical proportions’: Former Ikea employee warns of small-format plan

AS IKEA plans an aggressive push into small-format stores and online shopping, a former employee explains why he thinks it will be a disaster.

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OPINION

OH IKEA, how we love to hate / hate to love you!

Ikea has announced its intention to take on the likes of Harvey Norman, Super Amart and Fantastic Furniture with an aggressive growth strategy, and I have a few concerns.

Firstly, let me declare my past association: I was an Ikea employee for an eight-year period in the ‘80s and ‘90s. I loved them before they moved to Australia. For a long time my apartment looked like an extension of the Ikea showroom ... okay, it still does.

Even now I read their press releases with great interest, expecting to be bedazzled by some new innovation or strategy. But their latest announcement just reminds us that the more things change, the more they stay the same.

News.com.au this week published details of Ikea country manager David Hood’s vision for the future of “small format pick-up stores, online shopping and home delivery”. Kudos David for this long-overdue foray into the world of e-commerce!

But at the same time, I recall the last time Ikea went down this same path — albeit a very limited attempt. Back in my day with the retailer, Ikea used the ‘small format store’ expansion method as a way to expedite growth with — well — let’s be kind and say ‘limited success’.

Many Sydneysiders will remember the mid-sized Gordon and Moore Park stores, both of which were logistic nightmares. Few will remember the Lutwyche venture in Brisbane, variously rebranded during its brief existence as a ‘small footprint’, ‘concept’ and ‘designer’ store.

Lutwyche was not only a logistic and financial catastrophe — it was also a PR disaster of biblical proportions. And that’s what worries me about the latest strategy. Endless streams of customers arrived expecting to shop in an Ikea store, only to be confronted with a shopfront carrying barely 5 per cent of the range, being advised (at this far-too-late stage) of the other 95 per cent being available ‘online’.

Of course, it was the store staff who bore the brunt of it. Angry and irate customers were a daily occurrence.

How will it be any different this time? How will customer expectations be effectively managed? How will the message be conveyed so that the customer knows they are driving for up to an hour to see only a small percentage of the range?

On the whole, it’s an excellent growth strategy which is long overdue, and David and the Ikea team deserve to be wished every success. But who really wants to visit an Ikea store displaying a small percentage of the range? No thanks. I’ll drive the extra distance to get the full customer experience. And the meatballs.

@eric_r_elliott