Ikea is doing its part to combat the cost of living with a very particular ad that started publishing in the United Arab Emirates, but that goes for everyone. The Swedish giant launched its print campaign in which it shows that, from 2020 to the present day, a large number of furniture have kept their prices unchanged, something that other competing chains have not been able to achieve.
This is the first time that the Stockholm and Hamburg branches have launched an advertising campaign together. “Inflation made [product name] even more affordable,” can be seen in the ads that appeared in newspapers in the UAE. Ikea is an iconic client that stands for affordability as well as great communication. We are excited to launch this media-neutral campaign that talks about a relevant global topic in a way only Ikea can do,” stated Tobias Ahrens, global chief creative officer of Ikea.
IKEA Try to Maintain Its Prices Steady Amidst the Crisis
According to Retail Week, in October 2022, it was reported that the homeware store had significantly increased its prices by 80% compared to 2021. The reason behind this hike was due to the growing manufacturing costs, leading to products such as the JOKKMOKK dining table and chairs to be priced at £179 in the UK, up from £99. But, some other popular products stood the same as previous years. Some items might be, so to say, resistant to inflation.
“We want to showcase the efforts we make to ensure that our products remain accessible to everyone and make a better everyday life for more of the many people,” Carla Klumpenaar, general manager of marketing, communication, home furnishings and retail design at Al-Futtaim Ikea in UAE, Qatar, Egypt and Oman said.
In an intrepid movement, the Ikea stores in India announced price cuts as high as 39% in some popular products, in order to attract new costumers and to gain the fidelity of old shoppers. It’s particularly unusual for the Swedish furniture giant to lower bring down prices in its products. In fact, the business model revolves around selling low-priced products, so affordable already that they’re in the low limit of the starting to lose money.
The IKEA Tricks to Keep Prices Low
Now, these are the ways Ikea uses to keep the prices of its products low and competitive. Ikea controls all aspects of the production process, from design to manufacturing and distribution. This allows them to keep costs down and transpose the savings on to their customers.
On the other hand, the Nordic design is simple, with simple and delicate lines, which makes its furniture functional and simplistic in manufacture. In addition to this, the manufacturing model starts from producing gigantic quantities, to lower production and distribution costs. On the other hand, the fact that the furniture is sold disassembled in boxes means that assembly costs do not have to be charged on the final value of each product.
The flat packing is easy to transport and store, so the amount of freights and storing facilities stay smaller than other companies. Another cost cut that works great on Ikea and that have been copied by global-scale brands and companies.
And least but not last, the company uses a wide range of low-cost materials that are sturdy and time-resistant, including engineered wood, which is cheaper and more sustainable than traditional hardwoods. That’s how Ikea deals with inflation.
