Ikea: ‘Sales reduce trust’

The holiday season is traditionally a time of unprecedented mark-down activity as retailers fall over one another to attract gift shoppers and bargain hunters with lower and lower prices.But at least one major retailer refuses to engage in the annual discounting...

The holiday season is traditionally a time of unprecedented mark-down activity as retailers fall over one another to attract gift shoppers and bargain hunters with lower and lower prices.

But at least one major retailer refuses to engage in the annual discounting game.

Ola Lindell, marketing manager for Ikea, says the Swedish-based retailer does not allow the temptation of short-term sales increases to divert it from the task of building brand equity.

Holiday products

Lindell says that, as is its custom, Ikea will sell a variety of holiday season products over the 1992 Christmas season, largely in the category of decorating items for the home.

And it will run discounts on products through its Family Club program.

But he says the company will not follow the practice of most Canadian retailers and discount large portions of its stock to attract pre- and post-Christmas bargain-hunters.

Lindell says he has difficulty understanding how retailers hope to gain the trust of consumers when, every year, they raise their prices leading up to Christmas and then announce deep-discount sales immediately afterwards.

Pre-Christmas period

In recent years, in fact, the traditional post-Christmas, or Boxing Day, sales have begun running in the pre-Christmas period.

Asks Lindell: ‘How could I trust them [retailers] if I’m in one day, and they have a price, and then I’m in another day, and they have another price?

‘We don’t believe in that way of acting,’ he says. ‘We want to build trust with the market.

‘For us, the range and the product are the heroes. That is the way we work, together with good prices.

‘When you work the other way around, price is the only incentive for the relationship between the customer and the retailer. I don’t think that’s right.’