Introduction of IKEA IKEA is a privately held, international home products retailer that sells flat pack furniture, accessories, and bathroom and kitchen items in their retail stores around the world. The company, which pioneered flat-pack design furniture at affordable prices, is now the world’s largest furniture retailer.  IKEA was founded in 1943. Currently, the company is owned by a Dutch-registered foundation that is believed to be controlled by the Kamprad family.
IKEA is an acronym comprising the initials of the founder’s name (Ingvar Kamprad), the farm where he grew up (Elmtaryd), and his home parish (Agunnaryd, in Smaland, South Sweden).  INGKA Holding B.V. is the parent company for all IKEA Group companies, including the industrial group Swedwood, which commissions the manufacturing of IKEA furniture from any manufacturer worldwide (outsourcing), the sales companies that run IKEA stores, as well as purchasing and supply functions, and IKEA of Sweden, which is responsible for the design and development of products in the IKEA range.
INGKA Holding B.V., owned by Stichting INGKA Foundation, a non-profit foundation registered in Leiden, Netherlands, owns the logistics centre europe in Dortmund, Germany. Inter IKEA Systems B.V., based in the Netherlands, holds the IKEA concept and trademark and has franchising agreements with all IKEA stores worldwide. The biggest franchisee of Inter IKEA Systems B.V. is the IKEA Group.
On the other hand, Inter IKEA Systems B.V is owned by Inter IKEA Holding S.A., which is registered in Luxembourg and part of Inter IKEA Holding registered in the Netherlands Antilles. The ownership details of these holding companies have not been disclosed.
In 1975, Jardine Pacific acquired the established Hong Kong-based Ikea business that was later acquired by The Dairy Farm Company Ltd along with Ikea (Taiwan) in 2002, leading to new opportunities for business growth.
Combining the extensive experience and expertise of The Dairy Farm Company Ltd with our own impressive track record, IKEA is positioned for a brighter future. As a leading player in the market for home furnishing and lifestyle products, we currently operate three stores in Hong Kong, covering a total retail area of 210,000 sq. ft. These stores showcase a wide range of functional items designed at exceptionally low prices. Our ability to purchase in bulk allows us to offer even greater savings to our customers. While this website provides only a glimpse of our exciting product range, our stores offer so much more. Visit us for inspiration and give your home a transformation!
In terms of retail visual merchandising, many principles align with advertising, graphic design, and interior design. The primary goal is to create an enticing and cohesive environment that attracts attention and drives sales by maintaining a clean store with ample lighting while displaying items in well-organized groupings.
Visual merchandising goes beyond surface-level aesthetics and considers the thoughts, emotions, and reactions of customers towards the created environment. Below are twelve tips for retail visual merchandising:
Take It Outside: If weather permits and permission allows, showcase merchandise outside the store to generate excitement and create a buzz.
Identify Everything: Customers are often in a hurry, so use signage to identify departments and categories to help them find what they need and encourage additional purchases.
Set The Mood With Your Windows: Store windows provide valuable merchandising space. Utilize them to convey the mood of an event or sale that aligns with what customers desire to feel after making a purchase – be it excitement, romance, or serenity.
Embrace All The Senses: Effective merchandising should appeal to more than just the eyes. Consider how your store sounds, smells, and even feels. Ensure that the music, scents, and overall environment align with the displays you create.
You can stimulate the senses indirectly by using visuals. For instance, arranging a set of red bowls and spoons alongside a display of tomato soup can make mouths water! Additionally, utilize your displays to demonstrate how the products will appear in a customer’s home. For instance, if you are selling jewelry, present it in a gift box, accompanied by some remaining curls of ribbon… or showcase neatly hanging rows of pans. Numerous customers struggle to imagine how merchandise will look ‘in action’ – when they see a pan inside a box, they simply see a pan inside a box.
Transform a fake stovetop into a potential romantic dinner for two by placing a pan and adding cheerful checkered potholder, wineglasses, and cookbooks. To make it easy for customers to find what they’re looking for, organize your store in a logical manner. Arrange merchandise into ‘groupings’ within categories based on similar color, type, price, or size. Additionally, consider grouping items based on lifestyle.
Display merchandise from various categories that have a common theme, showcased in a setting that matches the theme. For instance, in an office supply store, a display can depict the workspace of a tech-savvy expert by combining a modern steel and glass desk with state-of-the-art computer accessories. Alternatively, it can recreate a traditional CEO suite with a sturdy walnut desk adorned with antique green glass lamps and a blotter. 8. Utilize spotlight lighting to attract customers, just like moths are drawn to a flame!
You don’t have to spend a fortune on dramatic lighting; strategically placed spotlights can highlight important merchandise. Utilize spotlights both inside and outside your store. Additionally, it’s crucial to regularly update your displays to keep them fresh and exciting. What may have been an impressive display initially can become mundane if it remains the same week after week. To prevent boring customers, consider changing your displays seasonally or even weekly. Lastly, make use of color in your displays.
Plan your displays around a dominant color that stands out and grabs the customer’s attention. Consider using a different color for each season, or even every week. For example, if you chose yellow as your central color this season, opt for purple or blue next time, rather than red or orange. It’s important to integrate movement into your displays to further attract attention. If you have any items that move, such as clocks, toys, or music boxes, make sure they are on display and functioning for customers to see. If your merchandise is more stationary, consider incorporating motion into the store with items like a mobile or fan.
Remember the Rule of Three Whenever you create a display, work in sets of three. If you’re arranging merchandise by height, have a tall, taller, tallest. If something is squat and round, have a fat, fatter, fastest. You can even group by price: good, better, best displays works surprisingly well.
Category Management is a retailing concept in which the range of products sold by a retailer is broken down into discrete groups of similar or related products; these groups are known as product categories (examples of grocery categories might be: tinned fish, washing detergent, toothpastes).
Each category operates as a “mini business” within its own boundaries, complete with its own turnover and profitability objectives and strategies. The implementation of Category Management in a business often changes the dynamics between retailers and suppliers. Rather than a traditional adversarial relationship, the focus shifts towards collaboration, information sharing, data exchange, and working together to grow the business. Supplier negotiations now revolve around the impact on overall category turnover, rather than solely focusing on individual product sales.
Suppliers are required, often mandated, to only propose new product introductions, planograms, or promotional activities if they are expected to benefit the overall category’s turnover and profit and be advantageous to shoppers in that category. This concept originated in Grocery (Mass merchandising) retailing but has extended to other sectors like DIY, Cash and Carry, Pharmacy/Drugstore, and Book retailing. Definition of Category Management | Rationale for Category Management | Definition of a Category | The Category Management 8 Step Process | Category Captains | Governmental concerns about Category Management | Category Management Association | See also | References Definition of Category Management
Category Management is a concept that is commonly understood among industry professionals, although its precise definition remains elusive. There are three widely accepted definitions in the mainstream:
Category Management involves treating product categories as independent business units and tailoring them to meet the needs of customers on a store-by-store basis, with the goal of satisfying consumer and shopper demands (Nielsen).
It is also described as the strategic management of product groups through trade partnerships, aiming to maximize sales and profit by fulfilling consumer and shopper needs (Institute of Grocery Distribution).
Another definition characterizes it as a marketing strategy in which a comprehensive range of products, rather than individual products or brands, are managed as a strategic business unit (SBU) (Business Dictionary).
The Nielsen definition, published in 1992, was ahead of its time. Customizing product offerings on a store by store basis is now considered micromarketing and not necessary for Category Management. However, most grocery retailers will segment stores by size and select product assortments accordingly. Wal*Mart’s Store of the Community in North America is an example where product offerings are tailored to specific stores. One key reason for the introduction of Category Management was the retailers’ desire for suppliers to add value to their business rather than just the supplier’s own.
The implementation of Category Management brought about a new condition in a category where brands A and B exist. This condition involved ensuring that any actions taken, such as promotions, introduction of new products, revamped planograms, and Point of Sale advertising, were advantageous to both the retailer and the shopper in the store. Another reason for implementing Category Management was the recognition that there was a limit to the profit obtained through price negotiations, with potentially more profit to be gained by enhancing overall sales volume.
A third reason for collaborating with the supplier is to leverage their expertise in the market and delegate a significant workload in developing the category to them. The Nielsen definition of a category, which is widely used in the industry, states that products within the same category should fulfill a similar consumer need or be inter-related/substitutable. Additionally, the products should be logistically manageable in store, taking into account factors like temperature requirements.
However, in practical retailing situations, where demographic or marketing considerations are prioritized, this definition does not fully explain how the process typically functions.
The Category Management 8 Step Process
The diagram on the right illustrates the eight steps, which are as follows:
1. Define the Category (i.e., determine what products are included/excluded).
2. Define the category’s role within the retailer.
3. Evaluate the current performance.
4. Establish objectives and targets for the category.
5. Formulate an overall strategy.
6. Develop specific tactics.
7. Implement the plan.
8. The eighth step entails reviewing and brings us back to step 1.
The 8-step process has been criticized for being too unwieldy and time-consuming in today’s fast-moving sales environment. In one survey, only 9% of supplier companies stated they used the full 8-step process. However, the current industry trend is for supplier companies to use the standard process as a basis to develop their own streamlined processes tailored to their products. Market research company Nielsen has a similar 5-step process: Reviewing the Category, Targeting consumers, Planning merchandising, Implementing strategy, and Evaluating results. It is common for a supplier to be nominated as a Category Captain by the retailer.
The Category Captain is responsible for maintaining close and regular contact with the retailer and investing time, effort, and sometimes money into developing the category within the retailer. As a result, the supplier gains a stronger influence with the retailer. The Category Captain is typically the supplier with the highest sales in the category. Traditionally, this role has been given to a brand supplier, but recently it has also been given to private label suppliers who are particularly savvy. In order to effectively perform this role, the supplier may be given access to more data-sharing, such as a retailer’s internal sales database like Walmart’s Retail Link. Furthermore, there are governmental concerns regarding Category Management.
Many governments have expressed concerns about collaboration between suppliers and retailers leading to potential breaches of antitrust laws, specifically regarding price fixing. The UK Competition Commission has emphasized the issue of market distortion and has taken action against milk price-fixing in Britain.  In 2004, the Category Management Association (CMA) was established as a professional association with members from various strategic insights and planning functions. It serves as a platform for connecting category management professionals globally, providing resources and best practices, and offering certification programs based on industry standards.