IKEA: Small Purchases Are Better Than None

Swedish-owned IKEA North America Inc. next month will break a holiday direct marketing campaign urging consumers to make small changes at home for a low investment.

Direct mail, free-standing newspaper inserts and the Internet will complement television and radio spots to push IKEA's Scandinavian-inspired home furnishings. Carmichael Lynch, Minneapolis, handles the $40 million to $50 million integrated marketing campaign through August 2002.

“The strategy here is simply to drive traffic to the store based on a consumer need at that time of year and really giving the right kind of message based on what the need is,” said Rich D'Amico, relationship marketing manager at IKEA, Plymouth Meeting, PA.

“With the consumer mind-set right now, people aren't sure based on what's happened recently, so some people may want to make small changes just to make themselves feel better,” D'Amico said

Headlined “Celebrate something,” the mailer is a 12-page, four-color brochure displaying 75 items. They include IKEA holiday staples such as a $6 rectangle vase, 12-piece porcelain tealight holders for $4.95 and a solid pine Husar chair with a red cushion for $69. The back page shows a six-pack of Svalka red wine glasses for $3.95.

“Everybody needs glasses at that time of year,” D'Amico said.

Plans call for one drop of 3 million mailers to loyal customers Nov. 11 and 2 million FSIs in Sunday newspapers for prospecting.

“We have a very diverse profile, anyone from young to old is our customer, so it's really hard to nail it down to one group,” D'Amico said. “We really look more at lifestyle and what people are doing in their life at this time of the year. We know people are cooking, we know that they're getting ready for gifts, we know that they're celebrating. So when we do a piece like this, we know we can be more general.”

While IKEA eschews special promotions, this year's mailer will push a Christmas tree for $20 that gives consumers a coupon for goods worth the same amount.

“We've never really done special promos,” D'Amico said. “We have one price all the time. It's a low price, and we just feature different parts of the range based on what consumers might be interested in.”

IKEA's mailer also provides the toll-free number and Web address to its home shopping division. Once consumers fill the order form online, an IKEA sales executive calls back to take credit card information.

The cost of producing the mailer is in keeping with IKEA's value proposition of simple products at affordable prices.

“This [mailed] piece … will be about 45 cents,” D'Amico said. “The average cost will be about 30 cents, because newspaper distribution brings it way down.”

On Nov. 1, the retailer will debut a microsite on ikea-usa.com that ties in with TV marketing. Three spots feature an elderly couple, a young man and two women in their late 20s. Each uses humor to emphasize how IKEA can become part of the consumer's life.

“What we hope to do online is something really creative that supports this key messaging consumers are going to see in their commercials,” D'Amico said. “So we'll probably have the commercials streamed online available on the site.”

The Internet and direct mail components will help bring more of the IKEA store to the consumer.

“What we do online and what we do with the direct marketing component of [the campaign] is really to expand the reach,” D'Amico said. “In the commercial you see products flashing very quickly at the end, but online and with the direct mail piece, we can really communicate the breadth and depth.”

IKEA sells an estimated 10,000 SKUs in each of its 15 U.S. stores. Its network covers Elizabeth, NJ; Long Island, NY; Los Angeles, San Diego and Emeryville near San Francisco; Philadelphia; Chicago; Pittsburgh; Washington, DC; and Baltimore.

The effort is primarily designed to reach consumers in that footprint.

“It's really targeted where we have our stores,” D'Amico said, “but we're on the East Coast, West Coast and Chicago, so you can say it's national, because people will travel a few hours to come to our IKEA store.”

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