By American shopping standards, the latest retailing venture about to hit Washington looks like a big gamble. When the Swedish home-furnishings store IKEA opens April 17 in Dale City, Va., it will try to turn the tables on the way Americans traditionally have shopped for furniture and accessories.
First and foremost, IKEA puts the responsibility for assembling furniture on the consumer, not the manufacturer -- a practice many Americans have been unwilling to adopt: the parts may not fit, the instructions often are unintelligible, the proper tools are not immediately at hand and, sometimes, the merchandise is flimsy.
IKEA also will offer Americans furniture that the company has continued to build according to Scandinavian specifications, a practice that means that some of the tables are taller and the beds (and the otherwise well-designed bed linens) narrower than those made by American manufacturers.
What's more, IKEA will continue to identify individual items by their Swedish names, which are hard to adjust to, much less pronounce.
The sales help will be limited. (An information desk and an impressive array of identifying tags with full product descriptions and details regarding size, colors, price and location in the warehouse are meant to take the place of extra sales staff.)
No special orders will be accepted, and there will be no in-store delivery service. Shoppers who are unable to carry their goods homes can arrange for delivery from an independent company that will have an office in the store.
On top of that, the frequent promotional sales commonly held by all American retailers will be notably absent.
But IKEA (pronounced eye-KEY-ah) is betting that this formula, which has made it one of the leading home-furnishings chains in Europe, will win big here as well.
If its experience in its first American store, which opened in June in a then-lackluster mall outside of Philadelphia, is any guide, the gamble is likely to pay off handsomely.
The Philadelphia store drew such large crowds during its special promotional opening days that IKEA employes were dispatched to nearby turnpike exits with signs urging would-be shoppers to come another day.
Today, the crowds, while not so large, still come pouring into the store at a rate of 30,000 shoppers a week -- a phenomenal number for a furniture store, industry officials say.
The reason is simple, they add. IKEA offers low prices, furniture designs that reflect up-to-the-minute European styling and a unique, well-thought-out shopping experience.
"IKEA appeals to the consumer because it offers good furnishings at a very good value," commented Wyatt Kash, editor of the National Home Center News, a trade magazine that keeps tabs on the home-furnishings industry.
"The presentation is so compelling that it makes you want to buy," Kash noted.
"They have the store arranged to let people shop for two hours -- compared to the normal 45 minutes -- before they get fed up," Kash added.
"The time is right," added Kent Larson, an expert in European retailing, who now serves as vice president for strategic planning and research for McCrory Stores.
"I've been watching European furniture over the past 10 years," Larson said. "Slowly, its functionality is being accepted here in the United States. That, coupled with the price IKEA can come in at, makes it very appealing for the younger market."
Store Displays Are Key
"Much of their merchandise is considerably pedestrian," said Kurt Barnard, editor of Barnard's Marketing Report.
"But it is presented so appealingly, displayed in a way that the customer sees in it the fulfillment of what he or she is actually looking for, that the customer buys," Barnard said.
In the United States, IKEA stores carry about half the 14,000 items normally found in the European outlets, according to Bjorn Bayley, president of IKEA's North American operations, which include eight stores in Canada.
There are a total of 71 IKEA stores around the world, most in off-the-beaten-path, low-rent locations.
Merchandise ranges from a broad selection of kitchen cabinets and components (also sized to European standards) to slouchy leather sofas in fashionable art deco colors, to run-of-the-mill-modern storage systems. The quality of the materials varies too, from solid woods to lacquered particleboard.
The furnishings offered by IKEA -- from sheets and towels, to decorative prints, to candles -- are color coordinated and in line with contemporary needs.
Almost everything needed for the home -- including the kitchen sink -- can be found.
Among the firm's prices: $28 for an unfinished solid pine end table. $56 for a wood and cane dining-room chair. $79 for a four-drawer, 34 1/2-inch dresser made of particleboard, covered with white lacquer.$180 for a pine bunk bed (mattresses are extra; the cheapest is $68). $230 for a 63-inch-diameter solid pine circular dining table.
The most expensive items in the store are the leather couches -- $1,000 for a two-seater and $1,200 for a three-seater.
IKEA's special shopping experience begins at the very entrance of the store with a playroom where children can slide and float -- literally -- in a sea of thousands of brightly colored balls while their parents shop. The room has become so popular in Philadelphia that the store has had to impose a half-hour limit for each child on busy weekends.
For children too young for the "ball room," there are free, bright red strollers conveniently parked at the entrance of the 32,000-square-foot showroom -- a showroom carefully designed to give shoppers a myriad of ideas on how to decorate their homes.
Ninety percent of the furniture has to be assembled by the customer -- even the couches, which have to have the legs screwed on.
To encourage shoppers to prolong their visits, a Swedish cafeteria (complete with Swedish chef) is strategically positioned in the middle of the showroom, selling a variety of Scandinavian delicacies at low prices: a smoked salmon or herring salad costs $3, and a shrimp salad sandwich costs less than $2.
The careful planning continues down to the check-out line, where luggage racks, tarps and twine are on display for shoppers who have bought more than they expected and don't have enough room in their car to carry all the goods home.
Customers must must pick up their purchases on their own in the self-help warehouse (unless the item is too big to handle easily in the large shopping carts provided by IKEA).
Self-help -- whether in the warehouse or in the assembly of furniture -- is the key to IKEA's pricing philosophy.
As one of its advertisements notes: "One way we're able to keep our prices so low is by asking you to bend a little."
By asking the customer to assemble the furniture -- one of the most labor-intensive parts of the manufacturing process -- IKEA is able to cut prices.
Additionally, because unbuilt furniture can be packed tightly in a box and requires a minimum amount of space, it saves warehouse and transportation costs. And having the customers pick out the box in the warehouse also reduces the costs of internal handling and expensive reloadings.'
"You can't get the same things or the same experience at other places," said Thomas Brandt, manager of the Dale City store that will be part of the Potomac Mills shopping center.
"When people come here, they are not coming for a lamp, but for an IKEA lamp -- one that includes the experience of the ball room and the restaurant," Brandt said. "It's the sort of store where customers come not to buy, but for the experience."
Yet, according to IKEA's figures, the customers do end up buying. Bayley said that at the Philadelphia store, each visitor (including the children and both parents) buys an average of about $20 to $25 of merchandise.
With 30,000 visitors a week, that means the Philadelphia store is pulling in about $600,000 every seven days.
Bayley declined to give current figures, beyond the end of IKEA's fiscal year that ended Aug. 31. But, he noted, between June and the end of August, the Philadelphia store did "just short of $8 million. We figured if we did $5 million, we'd be very happy."
That unit continues to "do 50 percent better than we had dared to hope for," he added.
Business has not been without problems, Bayley noted. Chief among them was the failure to anticipate demand and adequately stock the store.
As a result, the store initially encountered serious out-of-stock problems -- something that any retailer knows could rapidly turn off eager shoppers.
Industry officials also say that some of IKEA's beds and linens -- smaller than American sizes -- are slow-moving.
But for now, IKEA officials say they do not plan to change sizes to meet American demands.
"We'll sell what we've got," Bayley said. "If you don't want to buy, fine."
Lack of sensitivity to American shoppers and their demand for sales and service also could be a problem, noted Pauline Dora, president of Conran's, the American subsidiary of a similar but more upscale home-furnishings chain.
When Conran's came to the United States nine years ago, it wasn't in the habit of offering special sales. Nor did it provide delivery or shipping service, Dora said.
Now it does, however, because "here in this country people expect more service," she explained. Promotional sales were instituted as well.
Without them, "people might not go to Conran's because they will think it is not a bargain," she said.
Nonetheless, Dora said she thought IKEA "would work out well," especially considering its billion-dollar size.
The name IKEA is an acronym for the 43-year-old company's founder, Ingvar Kamprad, and the farm and village where he grew up in Sweden: Elmtaryd, Agunnaryd.
Kamprad began the company much like a peddler, traveling around the area selling a wide assortment of goods such as Christmas magazines, plants and flower seeds.
Mail Orders Began in '47
In 1947, Kamprad began a mail-order operation and, according to company literature, advertised "among other items the sensational ballpoint pen."
Three years later, the first furniture and home-decorating items were introduced, with a showroom following in 1953.
Today, the company has grown into 71 showroom and warehouses, with annual sales of $1 billion. Company officials decline to disclose how profitable the company is.
Even though IKEA designs and constructs its products, it doesn't own or operate any factories. Instead, after designing the furniture, it looks around for a manufacturing source.
Sometimes it asks a single manufacturer to make an entire piece of furniture; other times it has several companies -- perhaps in several countries -- make different parts for a single piece of furniture.
Overall, this helps the company cope with the fluctuations in the monetary market because it is not vulnerable to devaluations in a single currency, store officials said.
In designing its furniture, the company follows one of the nine philosophical points set out by Kamprad: "It will be as simple and straightforward as we are ourselves . . . . It will express an easier, more natural way of living and have a youthful touch for the young-at-heart of all ages." Profit 'a Wonderful Word'
Another of Kamprad's nine principles:
"Profit is a wonderful word."
IKEA has been eying the United States for many years, but had been unable to seriously consider it until recently because the company still was trying to meet the demands created by its expansion in Europe.
"We're finally here -- at least in a small part," Bayley said. Based on its experience to date, that "small part" will grow considerably.
Although store officials had not planned to open more showrooms until they had two up and running, Bayley acknowledged that the chain is actively looking for new sites on the East Coast, between Boston and Washington.
"We plan to open one to three stores a year," Bayley said.
Beyond that, Bayley said IKEA will relocate its North American headquarters from Vancouver, Canada, to the eastern seaboard of the United States. "This is where the action will be," he said.