Why don’t businesses learn from each other?
I’m a huge fan of Ikea. Not because I particularly like their furniture but because I really admire the business model they’ve created. I’m also an admirer of McDonalds – again, not because I particularly like their food.
In the case of Ikea there’s a lot to admire in their business model and I often find myself wondering why other businesses haven’t copied some of their better ideas.
For example, where else can you get free childcare while you browse the store or get a coffee? What other furniture store sells cheap ice-cream and hot dogs on the way out? For that matter, what other furniture store sells food at all? Ikea sells a lot of food – €1.2 billion in 2011. Not bad for a FURNITURE STORE!
They sell food because the founder, Ingvar Kamprad, noticed all the way back in 1960 that shoppers were leaving his store without buying anything because they were hungry.
As a parent of three young children, having a place where my wife and I can shop, have the kids looked after (for 40 minutes) and get access to low cost food is an amazing bonus. And while you’re enjoying the benefits of the cheap food in the restaurant you’re surrounded by Ikea furniture with the tags on so you know where to find it in the store should you decide the wing backed chair you’re sitting in would look great in your recently decorated lounge.
Let’s also not overlook how great the bargain basement area is too. Imagine other companies selling off their damaged goods like that – it’s the part of Ikea I like the most. Can I find a bargain piece of furniture?
If you look at Ikea’s competitors, brands such as Homebase, B&Q, DFS, etc you have to wonder why they haven’t implemented some of the same concepts.
A couple of years ago, Helen and I wanted to buy a new sofa so we all traipsed down to DFS (because there was a sale on apparently) and spent the entire time there chasing our young girls who couldn’t resist the urge to sit on every piece of furniture and hide behind the sofas. If they had a small creche in the corner of their huge showroom where we could have left the girls just for a few minutes would have been a massive help for us while we browsed the store.
B&Q in Culverhouse Cross here in Cardiff has a small cafe at the rear of the store. It’s hidden behind the electric sockets and the aisle where they sell buckets and mops – you know, the least popular part of the store!! If you’ve ever accidentally come across it you’ll find it to be a fairly typical British cafe selling rubbish coffee and traditional snacks like bacon butties and cake.
Now, imagine if they moved it to the front of the store and actually made it a nice place to eat and drink? So as you’re leaving the store you drop in for a quick coffee (made with real coffee) and a cheap ice-cream for the kids to thank them for being well behaved around the store.
The reason why Ikea sells cheap ice-cream after the checkout is because a lot of research went into the emotional state of customers as they shopped in their stores and Ikea discovered that picking the furniture from the warehouse and buying it was the point where their customer’s emotional state dropped so they thought, why not reward them by giving them cheap ice-cream on the way out! It works too.
McDonalds have overhauled their business model recently. Mainly in response to the competition like 5 Guys but also because there has been a shift in consumer habits recently. We’re moving towards a do-it-yourself model of shopping. We’re becoming used to self-service checkouts and using technology in our shopping. Look at the growth of the self-service tills and the scanners we can now use in Tesco.
When I walk into a McDonalds now it’s still recognisable as the cheap food restaurant it’s always been but now I can order my food from a screen and have it delivered to my table. I can even order it in advance in some stores.
For the kids they now have tablets they can play on and other entertainment to distract the kids for even just a few minutes. The seats have changed too. I remember as a kid visiting McDonalds and sitting on hard plastic chairs. Now they’re padded and there’s a variety of types to choose from.
But even with all these changes, the main focus of McDonalds has always been convenience and low cost – things that all parents will appreciate and it’s what Ikea and McDonalds have in common.
The point of all this is that a huge amount of thought has gone into the needs of the consumer rather than the needs of the business. How often in our own businesses do we consider the needs of our customers last after the needs of ourselves? We think about how we can sell to our clients rather than how our clients can buy from us.
It’s time to take a leaf out of the really successful businesses around us and start to put our customers needs first because when you get the balance right between their needs and your business needs the potential is huge!
Perhaps we should all start selling meatballs in reception?