The Swedes were not shocked–surprised, but not shocked.
Market research had indicated that the new IKEA Chicago store in Schaumburg would be a success, but they started with what they described as very low sales projections.
“We did it more for tactical reasons,” said Jan Kjellman, president of IKEA North America.
Kjellman wanted to build into those projections some room for celebration. He wanted to be able to revel just a little with his co-workers (as employees are called in IKEA’s democratic corporate culture) over just how well the store did its first year after it opened in November 1998. After all, this was Swedish-based IKEA’s first venture into Midwestern America.
But when the low-ball $60 million sales projection rocketed to more than double that number, co-workers here did some back-patting and then quickly got back to work.
“Our sales are exceeding our space,” said Kerri Molinaro, store manager, who has the interesting problem of trying to figure out how to service some 60,000 visitors (as customers are called) a week and a demand for products that has forced her to lease temporary warehouse space in Elk Grove Village and Chicago as plans for an addition get under way.
Yes, that mammoth, octagonal-shaped building, painted blue and yellow (the colors of the Swedish flag) will be adding even more girth. At 415,000 square feet, which makes Schaumburg the largest of IKEA’s 20 North American stores and the third largest in the company’s 153-store, worldwide chain, it is not big enough.
“We need to hold more in the building, because we’re selling more,” explains Molinaro. up through the three levels.
A one-story, 50,000-square-foot addition to the north end of the building will do it, according to Molinaro and architect Andrew Koglin, principal of the Chicago-based Otis Koglin Wilson firm and one of the original architects of the building. Plans have been submitted to the Village of Schaumburg for review. Construction is scheduled to start in April and continue through the fall, although the project won’t be complete until early 2001. The store will remain open.
Because business has been so good here, Kjellman doesn’t rule out another IKEA store for the Chicago area and confirms that site scouts are already looking.
Of course, IKEA’s success is Schaumburg’s good fortune. Sales tax is the village’s primary source of revenue, and Village Manager Ken Fritz confirms that, given the current numbers, IKEA Chicago will be pumping some $1.8 million a year into the coffers.
There is nothing traditional about IKEA in the world of home furnishings retailing, though.
Good design at great prices, as it bills itself. And huge selections–everything from soup ladles to sofas and frozen Swedish meatballs. They are IKEA’s main mantras–the same mantras that guided a young entrepreneur named Ingvar Kamprad to draw upon the vast number of furniture factories and skilled craftsmen in his native southern Sweden and open the first IKEA furniture store there in 1958.
IKEA surveyed cars in its Schaumburg lot one weekend and found license plates from 23 states, representing all of the Midwest and as far away as Maryland, New York and Colorado.
“If people are coming through (the Chicago metropolitan area), it’s almost as if they stop here,” said Molinaro, who lauds the building’s fortunate and very visible siting just west of the highly traveled exchange for Interstate Highways 90 and 290 and Illinois Highway 53.
But there are plenty of recently enlightened Midwestern folks too.
“I never heard of the place before,” said Lavelle Johnson of Maywood, who “discovered” IKEA through a store catalog that was sent to his home. Johnson and his wife, who are getting ready to buy a house, made the trek to IKEA for the first time in December–and got hooked.
“We came four times within six days. We wanted to see it all,” said Johnson.
A lot of shoppers fit that profile.
John and Tara Schroeder of Rockford, who are in the process of building a house, dropped off the kids at school one recent Monday morning and drove to IKEA for a full day of “checking this place out,” said John Schroeder, notebook in hand.
Linnea Stofchick, who was in town recently from Portland, Maine, visiting relatives, came to IKEA with her cousins simply because they were all “curious.”
IKEA officials like to tout this notion that the store is a “destination.” And they have the facts to prove it. According to a recent customer survey, the average IKEA shopper spends a little more than three hours in the store, which is incredible for a place that deals in furniture. They may take in lunch or dinner in the third-floor, cafeteria-style, Swedish restaurant. And they may drop off the kids in the second-floor ball room, which is staffed with IKEA personnel and enough plastic balls to keep youngsters occupied.
Kids are a big deal at IKEA.
From the start, Ingvar Kamprad singled out families and children as a primary focus of the company. All IKEA stores do a lot to nurture that image and that business. Besides the ball room, there are play areas in the children’s department and in the return and home delivery areas on the first level to keep anxious tots busy.
The attention has paid off. Sales in Schaumburg’s children’s department, which includes everything from toys to furniture, has averaged an impressive 6 percent of the store’s sales, according to Molinaro.
Maria Tsagaris of Mt. Prospect is just the kind of mom-shopper that IKEA loves.
“I just come here to bum around,” said Tsagaris, who is accompanied by her 9-month-old son, Michael, and who comes here about once a month.
She also has bought. “I got his entire crib set here for under $1,000. It’s just such a great bargain.”
Tim and Beth Koesser of Barrington were looking at bunk beds for their two daughters–but also got caught up in the displays.
“They have nice ideas about a lot of little things that you can pick up,” said Tim Koesser. “Wooden hangers, wooden toys . . .”
The little things bring sizable business to IKEA. The Schaumburg store sells $300,000 a month in candles, according to Molinaro, who calls it one of the most surprising sales statistics. A torchiere lamp that sells for $9.95 flies off the shelves; the Schaumburg store sells 1,500 a week.
Those little things also ensure IKEA a broad range of customers–from seniors who only want a few accessories to spruce up the house to college students with limited funds but big hopes for style.
Perhaps David Reinwald, a 20-year-old college junior who hails from Buffalo Grove and who had his hands on a nifty little desk lamp and shade–a combination he proudly put together–sums up best the appeal of IKEA: “They’ve got good stuff and good prices.”
