Ikea Malaysia Merchandise Innovativeness

Merchandise Innovativeness

Within the context of merchandise innovation, IKEA Damansara innovated the do-it-yourself affordable method of aligning their merchandise. Although, this method is not durable, it can be used instantly and customized changes can be implemented according to customer tastes and changing trends (Lutz, 2015) According to Berman & Evans (2013); there are a number of factors that determine the degree of IKEA’s merchandising innovativeness. According to Shoulberg (2015), IKEA Malaysia’s target market is focused towards an audience that prefers innovation in merchandise and price-affordability, and this coincides appropriately with their do-it-yourself method of assembling the furniture themselves for a much cheaper price.

Furthermore, IKEA is the first entrant (Bermans & Evans, 2013) in the Malaysian retailing industry establishing its retailing image by providing simplistic Swedish designed price competitive products, thus reaping first mover retailing advantages as stated below (Shepherd, 2015).

Since the retail store deals in a saturated market such as furniture and food items, Damansara IKEA is compelled to innovate, to the changing consumer demands on a constant basis. (Jhen, 2010).To innovate its merchandise according to horizontal customer fashion trends (Bermans & Evans, 2013), IKEA Malaysia has functional teams and innovative designers that research on customer insights to engage in a quickly responsive manner (Bermans & Evans, 2013),  with innovative products. (Sennefelt, 2016). Lastly, an interview with store personnel (Ahmed, 2016) revealed that it has been evident that IKEA’s length of sales-life are short (Bermans & Evans, 2013), thereby pushing IKEA to innovate its merchandise constantly to cater to consumers changing demands over shorter periods of time

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Figure 4.1: Long Queues prove shorter length of sales

According to IKEA Malaysia (IKEA, 2016) , the merchandising assortment strategy is largely dependent on their target market because the middle and high-end items are catered towards the middle and upper-income shoppers; since this constitutes a majority of Malaysia’s population, hence  IKEA’s merchandising assortment strategy to provide a wide category of products together with a deep assortment of product line due to its one stop shopping experience in a huge selling establishment. (Zentes, 2012). This is further reinstated by the fact that IKEA Malaysia’s merchandise assortment size according to Ahmed (2016) and Ikea (2016) ranges up to 6000 in-store products approximately; constituted out of 21 product categories ranging from furniture, baby products, safety equipment etc. and numerous product varieties on the basis of color, designs and style.