strange business model
- Thread starter d2xpeter
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Depending on his preferences he would be either deeply disappointed or switch the punishment approach.
And ladies does not necessarily mean no balls :bsmilie:
I still don't get the explanation.
How will an online shopping increase cost of business?
Besides setting up an e comnerce site with payment options, there is little extra cost incurred. In fact, in long term, it will reduce cost and increase buying traffic to ikea.
In an online system, ikea can offer online purchase for purchase items as a package. They can offer more points for ikea members.
The physical store only has so much space for max number of walk in. Any more walk in customers, its not benefiting ikea.
So having an additional online shopping, ikea can have more revenue generated than just walk in customers purchases.
The delivery contractor are out sourced. No additional cost to ikea. in fact, it's more profit to the contractor due to online shopping purchases.
For first sight perhaps, but don't forget that consumer expectations are not the same today and from an outsider's perspective I would think that customer service would be the largest source of costs. I can't remember if I mentioned this earlier but viewing things at a physical shop is very different from looking at it online. I would probably agree with you that it is a clear choice for a certain sort of item - small, light things for which postage is simple and there are no worries of delivery damage issues (e.g. makeup or even handphones). For furniture it's not exactly the same cup of tea. You can look at Forty Two since that's an example that has been mentioned - they offer a 7 day money back guarantee if the customer is unsatisfied with what they received. Of course it's optional for a company to practice such but who would venture to purchase with as much confidence if there was no such policy? There's all kinds of new problems that open up (especially for a furniture shop) - you will have people claiming that the item was not as described/photographed, it is not what they want, etc. And this is after they may have assembled it.
What's IKEA's return policy now? 90 days and only if the package is unassembled. Having a physical store ensures that customers cannot say that they didn't know what the item would be like assembled. I can see why an online shop really doesn't fit in with their philosophy of selling unassembled furniture and producing packages that are easy to self-assemble. They would probably have to rope in a lot more manpower to entertain an increased volume of customer complaints, either absorb the costs of returns via delivery contractor OR incur the wrath of unhappy customers who will proceed to declare that they will never buy from IKEA again, and if they give in to customers' demands of being unhappy with the half-assembled item, either choose to discard the half-baked outcome or disassemble, repack, etc. This will also require more storage space, depending on how quickly they can turn over the returned items. Does that sound simple? Not to me. The result will have to be an increase in their prices (which makes them less attractive to consumers in general) to maintain the same level of profits.
I'm also not sure if people these days in Singapore will be happy to click on furniture icons to buy things. There seems to be a greater focus on aesthetics and feel within one's home than the previous generations these days, so I feel that there's also a tendency to want to look at the physical piece of furniture (or be able to return it if they aren't happy, FortyTwo style at least), just from a local context.
Anyways, that's just my view.
On another note, it's interesting to note that IKEA started off as a mail order catalogue company (see history here).
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Please have a look at the costs of setting up and maintaining a shopping portal that serves millions of page visits. You don't get this for a few hundred bucks a months. Besides this, ordering online is something legally different from walking into a shop, paying at the cashier and having some third party delivery guy pushing the stuff up the lift to your place. Don't overly simplify, pay attention to the details.
Just because something is technically possible that does not mean that it makes business sense. IKEA has occupied a niche in the market with their portfolio, their philosophy, mall style and other elements like self assembly: young families who want to have a home (the first one) and not paying a fortune. It must be simple and flexible in many ways. Exactly this is what IKEA is doing: keeping furniture shopping simple. The global success proves them right.
If you have different preferences then this is your prerogative. Just don't expect or demand that every shop out there must follow your ideas. Or would you seriously ask a stall owner in a food court about an ordering portal and home delivery?
Coming from a background of e-commerce I can tell you this: Online sales is not as simple as it seems. it is also not as low cost as it seems. Besides the inherent costs of technology/servers, manpower to develop and maintain online sales sites, there are also a lot of support required in the backend, customer support, issue resolution, and the biggest piece is fulfillment. Never underestimate fulfillment, as online shoppers will expect delivery. Just having the workflow to put orders together and deliver them is nothing less of a daunting task. And due to differences in regional laws, online stores will have to be regional as well, and the same goes for logistics and fulfillment. Especially so when the items sold can range from small items to huge custom order items.
Even sites like fourty two operate very different from IKEA, where most products are sourced or dropped shipped, and not manufactured in house.
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you are right.
that is exactly what i think so too, bro.
I would certainly not hesitate to purchase even more! Could be triple of those i made. LOL
For first sight perhaps, but don't forget that consumer expectations are not the same today and from an outsider's perspective I would think that customer service would be the largest source of costs. I can't remember if I mentioned this earlier but viewing things at a physical shop is very different from looking at it online. I would probably agree with you that it is a clear choice for a certain sort of item - small, light things for which postage is simple and there are no worries of delivery damage issues (e.g. makeup or even handphones). For furniture it's not exactly the same cup of tea. You can look at Forty Two since that's an example that has been mentioned - they offer a 7 day money back guarantee if the customer is unsatisfied with what they received. Of course it's optional for a company to practice such but who would venture to purchase with as much confidence if there was no such policy? There's all kinds of new problems that open up (especially for a furniture shop) - you will have people claiming that the item was not as described/photographed, it is not what they want, etc. And this is after they may have assembled it.
What's IKEA's return policy now? 90 days and only if the package is unassembled. Having a physical store ensures that customers cannot say that they didn't know what the item would be like assembled. I can see why an online shop really doesn't fit in with their philosophy of selling unassembled furniture and producing packages that are easy to self-assemble. They would probably have to rope in a lot more manpower to entertain an increased volume of customer complaints, either absorb the costs of returns via delivery contractor OR incur the wrath of unhappy customers who will proceed to declare that they will never buy from IKEA again, and if they give in to customers' demands of being unhappy with the half-assembled item, either choose to discard the half-baked outcome or disassemble, repack, etc. This will also require more storage space, depending on how quickly they can turn over the returned items. Does that sound simple? Not to me. The result will have to be an increase in their prices (which makes them less attractive to consumers in general) to maintain the same level of profits.
I'm also not sure if people these days in Singapore will be happy to click on furniture icons to buy things. There seems to be a greater focus on aesthetics and feel within one's home than the previous generations these days, so I feel that there's also a tendency to want to look at the physical piece of furniture (or be able to return it if they aren't happy, FortyTwo style at least), just from a local context.
Anyways, that's just my view.
On another note, it's interesting to note that IKEA started off as a mail order catalogue company (see history here).
i am certainly a very unhappy customer now!
You still dont get the point.
You still can visit their store, view the setup there for those items you have in mind. If you like it, you would hv the flexibility of ordering it online for big quantity and bulky things and get it delivered to you WITHOUT you going to the store and laboriously moving things yourself.
Previously, i had a house furnishing designed by IKEA and it was such an enjoyable experience. We just go to the store design section, told them our concept, they did the design, we reviewed, and then they did everything, and even provide a renovation contractor who did the assembly/installation, plumbing and electrical.
This service FOC if the furniture purchase amount >5000, which is easily reached. Just that day i hv already spent about 1300 on those items that i lugged at the store.
I should seriously consider this option for my the other house. But wonder if they still hv this service.
Sion
Senior Member
Sion
Senior Member
You are suppose to try out their bed before you left :bsmilie:
You cannot do this at the online store :bsmilie:
And how is IKEA going to handle the refund policy? By giving visiting customers a code to identify themselves as having visited the store and viewed a certain item? Obviously didn't bother reading my post. :bsmilie:
And of course there are many other points that I could make here, but since you don't bother reading, I won't bother typing. :bsmilie:
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You are suppose to try out their bed before you left :bsmilie:
You cannot do this at the online store :bsmilie:
LOL. Ya, that is one thing i like about IKEA.
But i also want the flexibility of ordering online leh.
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Until the local franchisee adopts that, I think the next best thing you can do is to make a shopping list and use a concierge service ;p
E.g. http://www.wheregottime.com/
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