Furniture titan IKEA is combating rising input costs with sleek redesigns of some of the company’s signature products.
With inflation driving up the price of shipping costs and construction materials like metal, wood, glass, and plastics, IKEA has had to get innovative with its product designs in order to trim costs, maintain profitability, and remain appealing to budget-conscious consumers, reported The Wall Street Journal (WSJ).
The goal of the product redesigns is to ensure competitive pricing with all IKEA-branded future in ways that do not overly impact the company’s balance sheet or alienate customers, according to Susanne Waidzunas, global supply manager at Inter IKEA Holding BV, the parent company of the Älmhult, Sweden-based furniture giant.
“Our budget is the customer’s wallet, and their wallets are smaller than ever,” said Waidzunas, per the WSJ.
One of IKEA’s flagship products receiving this cost-effective overhaul is the brand’s Billy bookcase, which product manager Jesper Samuelsson calls the “heart of IKEA.” The Billy bookcase is the company’s top-selling product globally, averaging one sale every five seconds, according to Samuelsson, the WSJ reported.
The company is able to achieve such a robust sales figure thanks to the brand’s nearly 9,500 products across 450 stores in 62 countries. However, due to inflation-induced price increases, IKEA is targeting revised cost savings between 25% and 30% for the Billy bookcase, according to Samuelsson.
Some of IKEA’s innovative cost-cutting measures introduced to the products have been to replace wood veneer with paper foil, replace metal nails with plastic fasteners, introduce cheaper and lighter plastics, as well as substitute recycled aluminum for zinc.
While product quality is ultimately being lowered, these design changes are unlikely to dissuade shoppers from buying IKEA-brand products, according to Tom Higgs, a lecturer at London’s Brunel University and an experienced furniture designer.
“IKEA’s customers are looking for affordable, replaceable and convenient furniture,” Higgs said, noting that shoppers are not necessarily focused on the furniture’s overall quality, the WSJ reported.
Some of the company’s other furniture products that have also been redesigned include IKEA’s Flintan swivel chairs, its Säbövik bed, and its Rönninge table, among others. Despite efforts to cut costs, IKEA is still exploring other ways to boost profitability, including a $2.2 billion investment in new U.S.-based stores, as reported by The Dallas Express.