IKEA Inside Best Buy: Genius Partnership or Expensive Mistake | Fast Five Shorts
IKEA is opening mini showrooms inside select Best Buy stores, focusing on kitchen and laundry products with IKEA designers on-site. Sponsored by the A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Infios, and Quorso.
Chris and Anne disagree on whether this partnership makes sense - is it smart space utilization or an over-engineered branding exercise?
For the full episode head here: youtu.be/wKzV_5mqg64
Topics: IKEA Best Buy partnership, retail partnerships, home goods, appliances
#IKEA #BestBuy #partnership #retail #homegoods #appliances
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Transcript
IKEA is planning to open mini showrooms inside of Best Buys.
Speaker A:According to the Star Tribune and our friend Carson Hartzog, the Swedish home goods giant will feature kitchen and laundry products inside mini showrooms at select Best Buy locations.
Speaker A:And the store in stores will also feature Best Buy appliances.
Speaker A:The first 10 shops will launch in Florida and Texas, and the new locations will be staffed by IKEA designers and will offer consultation services.
Speaker A:The first locations will open in the fall.
Speaker A:Two stores will also serve as IKEA fulfillment centers, allowing customers of the home superstore to pick up their orders from a participating Best Buy location.
Speaker A:And are you buying or selling the idea of shopping IKEA inside of a Best Buy?
Speaker B:Mm.
Speaker B:I'm buying the Pilot, Chris.
Speaker B:I don't know if this is going to work.
Speaker A:Buying the pilot.
Speaker A:What does that mean?
Speaker A:Buying the.
Speaker B:I'm buying.
Speaker B:I'm buying.
Speaker B:If I were at Best Buy making the decision, I would definitely do this pilot with ikea.
Speaker B:It's big.
Speaker B:Name it.
Speaker B:I think this, along with their marketplace announcement with Miracle yesterday were absolutely necessary things that Best Buy needs to do to stay relevant right now to today's consumer.
Speaker B:But back to the IKEA pilot.
Speaker B:You know, I love this for the kitchen component.
Speaker B:I want to know where else you can go when you're remodeling your kitchen.
Speaker B:Where else can you go to get all of your appliances and a good range of prices on appliances from like early basic appliances all the way up to your high quality appliances in one place and get the cabinets and get the whole thing planned like Home Depot.
Speaker A:And Lowe's for that though.
Speaker B:And I thought you could go to Home Depots and Lowe's, but you don't have the selection and the trend and the design there that IKEA brings.
Speaker B:So yes, you could go to Home Depot on those, but I really do think that Best Buy is a good place where you can get both things.
Speaker B:Home Depot and Lowe's, there's like a couple of options.
Speaker B:It's not like new fresh, especially if you want a modern like you're appealing to this younger consumer that knows Ikea that is more comfortable going with an IKEA cabinet set to outfit my kitchen.
Speaker B:Like, that's, that's something that I would do.
Speaker B:Are, is the boomer generation going to do that?
Speaker B:No, they're going to go to Home Depot and they're going to go to Lowe's to do that.
Speaker B:But I really think that that's where, if I'm, if I'm really playing the odds that Best Buy is going to stay this relevant retailer I think this is a worthwhile test.
Speaker B:I have a little bit of a harder time buying this in the laundry category because I don't know many friends of mine that are like, I am dying to show you my new laundry room remodel.
Speaker B:I think the kitchen could be really clutch because I think that's an area where people are really starting to invest, and especially right now with where the economy is, I think this is like a good, high, low option for people looking to redo their kitchens.
Speaker B:But you are definitely not in agreement.
Speaker B:I can tell by.
Speaker A:Wow.
Speaker A:No, I think you're overestimating the amount of product and.
Speaker A:And design IKEA can showcase in a small shop and shop inside of a Best Buy, too, at least from the pictures I'm looking at.
Speaker B:Oh, yeah.
Speaker B:I don't.
Speaker B:I'm not saying that they're going to be able to do that all in the store, but I think that from a person, from the perspective of being able to, like, sit down with an IKEA advisor and be like, you could do these cabinets in green, in navy and whatever, like, I think that that could be a better experience.
Speaker B:But what.
Speaker B:What am I missing?
Speaker A:Just go to IKEA to begin with is my point.
Speaker A:But, I mean, I mean, here's what I think you're missing.
Speaker A:I think, with all due respect to Rob Olsen, ikea, who I've met, and I like him a lot, he's a good dude, too.
Speaker A:And all of our friends over at Best Buy, I.
Speaker A:You're right.
Speaker A:I just don't like this idea at all.
Speaker A:I get it on paper.
Speaker A:I mean, it.
Speaker A:It sounds smart on paper.
Speaker A:Like, Best Store.
Speaker A:Best Buy stores are probably larger than they need to be at this point, given all the electronics categories, the video games categories that are all moving online.
Speaker A:IKEA has tried to get a smaller store concept off the ground.
Speaker A:They haven't been able to have success with that here in the United States.
Speaker A:Appliances and home furnishings kind of go together.
Speaker A:So let's partner up.
Speaker A:Yay.
Speaker A:But it's.
Speaker A:That's not going to work because it isn't the core experience of why I go to ikea.
Speaker A:You kind of just said it.
Speaker A:There's.
Speaker A:I need to get a lot of stuff done.
Speaker A:I need help.
Speaker A:I need to do that so I can get it all done at one time when I go to ikea.
Speaker A:In fact, this setup probably induces more friction for me, and I'm going to ultimately end up back in Ikea anyway, to your point, I mean, you kind of said that in what you said.
Speaker A:So.
Speaker A:So net.
Speaker A:Net it feels like a very expensive over engineered branding exercise to me.
Speaker A:At best, when money could be better spent just getting people to interact with Ikea, either online or, or actually in IKEA stores.
Speaker A:So.
Speaker A:So I mean, Best Buy, I don't think Best Buy has that much to lose on this, but Ikea, it seems like a waste of time for me.
Speaker B:Oh man, I don't think so.
Speaker B:I think, I think, I think the IKEA trip has changed considerably in terms, especially in the kitchen category.
Speaker B:I do, I mean anecdotally from people that, who I have friends of mine and people who have recently remodeled their houses.
Speaker B:Like, I'm surprised at the number of people who are like, these are, these cabinets are from ikea.
Speaker B:We did this whole kitchen because our budget was X and appliances cost more because of tariffs and all the other things cost more like the, the construction costs more.
Speaker B:This is a way to save money.
Speaker B:And so I think for this specific category, it is a one stop shop.
Speaker B:And, and we'll see how it plays out.
Speaker B:I'm excited to continue to follow it.
Speaker A:Interesting.
Speaker A:Yeah, we'll agree to disagree on this one.
Speaker A:I.
