The company synonymous with “affordable furniture” is working hard to keep it that way.
Driving the news: For the past couple of years, IKEA has taken some of its products back to the drawing board to keep its prices down and profits up, as the company contends with the rising costs of metal, glass, wood, plastic, and shipping, per The Wall Street Journal.
- Designers found plastics could replace wood in some cabinet doors and drawers and that zinc and recycled aluminum substitutes could be deployed across products.
IKEA prices are still really low…
- IKEA packs everything flat to save on their storage and transportation costs—giving customers a steep discount in exchange for several hours of furniture assembly.
- The company chooses what it wants to sell a product for before creating it, then works together with suppliers to make sure the final product reflects that price.
Why it’s happening: We’ve reached the stage of consumerism where a 55" television, complete with the marvels of the modern age, can cost the same price as a plain ol’ dresser. To keep prices from rising higher, smart design tweaks are becoming increasingly necessary.
- “Our budget is the customer’s wallet, and their wallets are smaller than ever,” a global supply manager at IKEA’s holding company told The Wall Street Journal.
What’s next: Affordable furniture will start looking a bit different in the coming years. First up, IKEA has already re-launched its iconic Billy bookcase, which replaces the piece’s original veneer that overlays particleboard (or sawdust, if you ask critics) with paper foil.—SB