Hyderabad: IKEA has taken fresh steps to be more affordable for its customers in India to enable them to buy its home furnishing products. As part of the company’s commitment to the Indian market, it is launching a long-term strategic action called New Lower Prices Initiative wherein prices will be lowered for some part of its product range. The initiative will be live starting August 27 without an end date.
The retailer says that this initiative is not a short-term discounting activity but part of the company’s overall business proposition to be able to offer home furnishing products with good quality, functionality, design and sustainability at affordable prices.
Sharing about the new initiative, Kavitha Krishnarao, country commercial manager, IKEA India, told Telangana Today, “Affordability is something that we are constantly looking for at IKEA and is part of the core ethos of the company. The idea is to look at keeping the prices low yet offer high quality products. We are also looking at optimising supply chain and how to achieve economies of scale looking at large volumes that are coming to us. Local sourcing has also been an integral part of our strategy in keeping the prices affordable.”
“IKEA has taken several such measures in the past as well, much before the pandemic times. For instance, the Hyderabad store has made available home accessory products under Rs 100-200 range. We have later tried to expand this to certain home furniture products, offering them under Rs 3,000-5,000 range. We are extending the same concept of affordability through our latest move New Lower Prices Initiative, where we are reducing the price of products,” she added.
India is facing the fallout of the pandemic and there is an economic challenge. All the surveys are pointing to the fact that discretionary spending is going to be cut. IKEA therefore believes that lower prices will certainly support consumers in these tough times and had always been looking at various methods to bring affordable home furnishing solutions.
“As a retailer, we have always catered to very diverse customer segments. We have a wide range of products at different price points for each functionality. The new initiative required us to pick high volume products. IKEA has been offering core solutions for areas such as living room, bedroom and kitchen, and the idea is to make New Lower Prices Initiative applicable to all the areas,” Kavitha informed.
The entire value chain is important for IKEA. While customers are key for retail business, suppliers are also important. The New Lower Prices Initiative is going to be a win-win for all. IKEA is going to choose designs of products whose components can be further optimised to ensure economies of scale that will support and suit mass production from suppliers. IKEA is also going to look at suitable distribution models that will help in keeping the prices low. When supplier costs are going to get reduced, it will make it possible to pass on the benefit to customers.
New Lower Price products will be available for purchase at IKEA India website across Hyderabad, Mumbai and Pune and IKEA Hyderabad store. Even the upcoming stores in India will also extend this. Globally, this concept is also underway in the US and certain markets of Europe.
The new initiative suits products that are selling well. IKEA is expecting that there could be high demand for home furniture products in the wake of increasing work from home numbers. The company which has been catering to the B2B segment thinks this segment will also be benefited by the initiative across office, residential and co-working spaces.
Unlike the impact of pandemic on retail in general, Kavitha said, IKEA’s inventory management system has helped it manage the stock efficiently in a way that suppliers send products only after orders are placed, leaving no room for stocks to pile up.
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