A visit to the Israeli branch of the Swedish furniture giant Ikea, 100 days after its grand opening, uncovers a complex picture. A recent sojourn into the shop at very busy shopping time - Friday noon - revealed a sight nothing like the bustling activity during the first weeks after the opening. There was no bumper-to-bumper traffic on the highway nearby, nor columns of avid customers waiting to get in, and no lines at of eager customers thronging the checkouts, having purchased everything in sight. The traffic inside the store was moderate, although far from light, and made for pleasant wandering among the aisles.
While a slight wane in enthusiasm is only to be expected, the decrease in the flow of customers may have other explanations. In its first days, one of the most striking aspects of Ikea's store near Shfayim was the great attention to detail in design and in the arrangement of the shelves.
Today, the store is less organized, with items that appear to be arranged randomly in some of the departments - a problem for a brand that aspires to raise the local consciousness in terms of design. But the most serious problem of all, conspicuous to anyone visiting Ikea, is its dwindling stock.
On a random browse among the shelves, dozens of white notes with the words "Temporarily out of stock" stuck on items can be seen. And the notes are everywhere, in all departments. In some departments, for example chairs and textiles, even the original display has shrunk.
Talia Yoeli-Shvedron, Ikea Israel's marketing manager, maintains that the reason is that they are about to renew the collection, in accordance with the store's international policy, in late August, and the store will once again be inundated with new products.
The constraint may be understandable, but a situation like this after just three months of activity makes one wonder about the choice of timing for the opening of the store. Dov Rochman, CEO of Ikea Israel, admits that the company's learning period included this aspect, too. A more convenient opening date, he says, for example in September-October 2000, would have contributed to smoother organization and better adaptation of the stock to demand. He attributes the decision to open in April to the rate of construction of the store. However, one might expect better long-range planning from a company on the scale of Ikea.
Three months after the opening, it is fairly clear that the definition of the demands of Israeli consumers and their tastes was off target. Many of Ikea's Israeli customers have similar buying patterns to its customers in North America. They like expensive, luxurious and well-designed products rather than the cheaper basic ones, a fact that was not given enough weight in the decision of how to stock the Israeli store.
It is enough to compare the Israeli Ikea catalog to its German counterpart, for example, to find a large number of excellent products unavailable to Israeli customers. Yoeli-Shvedron says that the catalogs, and in their wake the collections and selection of items in the stores, are not adapted individually to each country, but rather are determined according to groups of countries, to simplify procedures and lower prices. Israel, it turns out, shares the same catalog with Spain, Iceland and the Gulf emirates. Rochman says that this decision will also be reexamined soon.
With the relative drop in the convergence of customers on Ikea, the smiles of the management are somewhat less bright. In the first days after the opening, they said that the crush of buyers and volume of sales surprised them, too, and some foresaw "a total revolution in Israeli consumer practices in the area of furniture." Today, they may be a tad less certain that this is so, although CEO Rochman says that he is satisfied with Ikea's sales graph and has been complimented by his bosses overseas.
One of Ikea Israel's problems is the decision by the Israeli franchiser, the Co-Op Blue Square Cooperative Association, together with Ikea's international management, not to open the company's only Israeli branch on Shabbat. This is due to dictates from the coalition in the Netanya city government, as well as reflecting Co-Op's fear of a negative response on the part of religious customers who shop at its supermarket chain.
