AMERICAN PERISCOPE. An idea called Ikea

A news report appeared recently that Ikea, the Swedish furniture retailer, will be opening its first store in the country in Hyderabad. The company will source local materials and sell handicrafts and so on, apart from providing the designs and technology to get its furniture made locally.

This is indeed a welcome move, for Ikea with its global muscle can also be a global outlet for local manufacturing. An additional reason why Hyderabadis would welcome this is because Ikea may even allow people to sleep on their furniture in the stores.

Ikea stores are located in the suburbs (due to the need for space), and can cover an area of 10,000 to 20,000 square meters. By the time you wander through the halls displaying living room furniture and reach the kitchen areas, you are ready for a snack. Ikea helpfully has restaurants on its premises.

As you move on through another few thousand square meters of retail space to their bedroom furniture area, you are ready for a nap.

Being smart, Ikea has recently begun allowing shoppers in China to sleep for a while on their beds. They call it an ‘open bed policy’. Ikea’s rationale for this is that it would encourage shoppers to stay longer in the store and may result in more sales.

Unless you are the kind who does mind people trooping by as you sleep, you would recognise there is nothing new in this.

Starbucks made a name for itself when it encouraged its customers to spend more time in its store by providing free wifi, and places to sit and work. Book stores have also been doing this for a while. The comfortable chairs in Barnes & Noble and Borders stores in the US are usually occupied by professionals wanting a nice quite place to catch-up on their emails or students finishing their homework. But does all this lead to increased sales?

The coffee drinker at Starbucks may be tempted to go and get another cup after a while and perhaps a biscotti along with it — after all, you see someone eating and drinking and suddenly you feel thirsty and hungry all over again! But in the case of bookstores, coffee and snack counters made it a great place to go and spend your lunchtime and not necessarily buy stuff.

The situation got muddied further due to the looming presence of on-line retailers such as Amazon. It was great to come and sit in a Borders store and browse books but when the time came to make a decision, people were going back home and buying it cheaper on-line. On-line retailers also began adding the browsing feature so you did not have to go to the store at all!

Retail chains in India may want to pay attention to store atmospherics. Often, the aisles are so narrow that you cannot bend down and retrieve an item from the lower shelf without knocking out items from the shelf behind.

If another customer wishes to come down the same isle, one of you will have to withdraw. And if you try to hail a shop assistant for help in finding an item, you will be given a look that would clearly indicate that he or she does not appreciate being disturbed from the cosy chat in the corner.

Your only solution is to beat a hasty retreat to the kirana shop nearby and give your list to the owner who is only too eager to help. I wonder if the resistance to allowing FDI in retail in India is coming from the mom-and-pop stores or from the local badly run department stores chains.

The writer is a professor and dean of the Jindal Global Business School, Sonipat, Delhi NCR

COMMENT NOW