NOTE: This article references the concept presented in an earlier blog post: The Basic Concept
We use the concept developed in the earlier part of this blog page to determine how 2 retailers within the same industry positions PSS (product, system and space) differently in order to distinguish themselves and relate to its target market audience.
IKEA's Retail Approach
Ikea maintains its low-cost quality furniture leadership by tightly integrating and optimizing its entire value chain. In Ikea, products are designed according to its 5 key dimensions (cost, quality, form, function & sustainability). It is usually constructed as modular systems - except for standalone furniture piece. The retail space then takes the product and applies it to spaces that simulates target market real life space use situation. With its target customers mainly being budget conscious and younger family startups, Ikea take the generational challenge to the tasks - e.g. space driven constraint, sustainability, quality products, time starved family, etc. It is then obvious that the retail focus of Ikea has to be around comfort and limited space use. It extends this concept by offering add-on functional products (i.e. wall shelves, storage hooks) that allow customer to continuously improve space use. Ikea's retail operation successfully wraps the space around disparate products to showcase effective space use - thereby creating a sense of relevance and shortens the retail purchase decision.
Minotti's Retail Approach
Minotti has a very different retail approach compared to Ikea. According to Renato Minotti, their designers considers how people live and work around a sofa. More than just a place to sit, the sofa can be a productive setting. The armrest can replace the side table and the back hold a reading lamp. Minotti explained, "With its technology, you can either lift the arms and the back. It (sectional sofas) can even host 20 people here and you can have a party. You can combine it many ways to fit in the room. You can put your feet up or use it as a side table. " Minotti creates collections (e.g. a table, sofa, armchair or carpet) where by the fabric and other elements speak the same design language. This intensely product-as-system focused approach meant that the entire space is warped around the product. With the target luxury segments, Minotti is driven to push the single product value proposition p to the roof - hence, a product driven retail space approach. The space itself is meant too accentuate Minotti's furniture piece, thereby making the retail strategy a product-centric strategy.
Ikea's Retail Space display approach compared to Minotti's
Ikea's Probable Target Customer Systems Decision Path
Ikea's customer will likely be concerned with space or affordable furniture piece or a combination of both. Their visit to Ikea's showroom will set them on a space organization exploration path. In which they will discover how to create comfort and a sense of organization - despite ever diminishing space, using Ikea's products and systems.
Minotti's Probable Target Customer Systems Decision Path
Minotti's customer is most likely aesthetic driven (the premium and classy look and feel). With its retail space designed to amplify the value perception of its product, a customer would very likely leave the showroom feeling inspired. An emotionally charged customer will likely keep this positive sensation and ensure that the design of their room space is in sync or conforms to the needs of its product piece or vice versa. Financials are usually not the major concern of Minotti's client base.
Other Space Use Strategy
Gillian Drakefort, Ikea Country Retail Manager, UK have noted that the online business in UK now makes up 10% of overall sales. The retail sales have had 5% increase in visitors over the past year. She claims that the cyberspace approach by Ikea has created complimentary outcomes in its retail operations. Ikea (depending on region) allows online purchase. Ikea have recently strengthened its cyberspace dominance by allowing customer to use the mobile app as a tool for augmenting furniture pieces in their desired room in real time.
For Minotti, everything it does is about amplifying the brand experience to its customer. It does not sell products online and would prefer a more controlled physical retail experience. In recent years, it has experimented with digital medias such as online catalogue over the more premium experience offered in Apple's Ipads. Its digital expansion is carefully curated as not to erode the brand value and dilute its retail store experience. The other interesting cyberspace approach by Minotti is how it approaches the System of Intelligence needs of its high-end clients. For this, they actually allow designers and architects to download and use its CAD models - true to its target market client needs. In the public or commercial space, it even host or co-host private launch events. The events are usually for target groups such as actors, architects, art collectors, fashionistas, business leaders, etc.
Space Shifting Customers
Retailers needs ensure that their target clients are not in the mode of space shifting whilst visiting any of the space that they are operating in. To do so, the retail formats needs to have the systemic feature and format that attracts and keeps them engaged.
Minotti & Ikea Challenges with R.3.M.A.G.I.C.S
IoT allows the passive and structural assets to become active assets. However, this activation requires careful planning and brand alignment. Since Ikea stands for "affordable contemporary design household goods", Ikea should focus on using the R.3.M.A.G.I.C.S to:
Using a combination of StAF and R3MAGICS, this blog post provides architecture analysis of the trend and major players in the retail market. R.3.M.A.G.I.C.S is short for Robotics, 3D Printing, Mobility, Analytics, Gamification, IoT, Cloud and Social platform. It encapsulates the key elements that will change the social-economic fabric in the coming years. StAF is short for Strategy-driven Architecture Framework.