IKEA STRATEGY PROPOSAL BARCELONA | MUMBAI
X IKEA BADALONA
Ikea Strategy Proposal for Barcelona and Mumbai
AUTHORS
Forum Shah is an India based Interior Designer who is currently pursuing Masters in Retail Design, Elisava. She loves the wild coast and finds her comfort in the sound of waves. Living in an International city, she enjoys the cultural exchange and discovering new places. She is well versed with English, Hindi and Gujarati(Mother tongue) and a beginner at Spanish.
forumshah95@gmail.com
Anum Wazir is a Pakistan based industrial Designer who is pursuing Post Graduate in Retail Design, Elisava. She loves the mediterranean sun, escapes from the city buzz into a quite corner with soulful music and enjoys swimming. She is well versed with Urdu and English.
anumwazir0.0@gmail.com
WHY IKEA? The authors come from cities and regions where there are no stores of IKEA and after arriving in Barcelona they experienced IKEA for the first time. It was a great opportunity to be able to provide the same to their countries having experienced IKEA closely. WHY BARCELONA? Currently pursuing Masters in Retail Design, Elisava in Barcelona both of them love the urban fabric of the city of Barcelon and wanted to explore further. They wanted to focus on the customer perception of the chosen brand and work in parallel with the needs of the city. WHY MUMBAI? The authors share a common love for the city of Mumbai in India, street food, culture and Bolywood. They were interested to dig deeper into the city’s culture to understand the positioning of the chosen brand Ikea and propose a strategy that will bring IKEA closer to the city and it’s people.
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Ikea Strategy Proposal for Barcelona and Mumbai
CONTENT
ABOUT IKEA About IKEA IKEA Values IKEA Market Segmentation IKEA Sustainability Report
01
GLOBAL VALUES Concept board
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BARCELONA Demographics Sustainability criteria Sustainability facts in Spain
51
SURVEY REPORT Data Survey Analysis IKEA Diagnosis
67
STRATEGY FOR BARCELONA Circularity Online Opportunities New Ecosystem
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INDIA Demographics Multicultural Society Traditionality
97
SURVEY Data and Analysis IKEA Swot analysis
111
MUMBAI Demographics Growing Urbanization Biggest Slum in Asia Social Opportunities
119
STRATEGY FOR MUMBAI Circularity Future Opportunities New Ecosystem
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BIBLIOGRAPHY
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Ikea Strategy Proposal for Barcelona and Mumbai
IKEA
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Ikea Strategy Proposal for Barcelona and Mumbai
First IKEA Store, Almhut, Sweden
Ingvar Kampad, Founder of IKEA
Ingvar Kamprad founded IKEA in 1943 at the age of 17, selling household goods like pens, wallets and picture frames. Småland, the landscape where he grew up, was stony and rugged. Back then, many of the inhabitants had to get by with small means, making as much as possible with next to nothing. Because of this, Smålanders are said to be thrifty and innovative, with a “no-nonsense” approach to everyday problem solving. Today IKEA is the world’s largest furniture retailer with 445 stores worldwide.
https://www.ikea.com/es/en/this-is-ikea/about-us/our-heritage-pubad29a981
IKEA
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Ikea Strategy Proposal for Barcelona and Mumbai
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Evolution of IKEA Logo
First Catalogue of IKEA
NAME
FIRST SHOWROOM
IKEA is named after the initials of founder Ingvar Kamprad, Elmtaryd, the farm on which he grew up, and Agunnaryd, the nearby village.
The prices in the first IKEA catalogue were so low that people were initially sceptical about the quality of the products, so Ingvar decided to convert an old workshop in Älmhult into a showroom where people could look at and try products before ordering.
FIRST CATALOGUE
FLATPACK IDEA
Because Älmhult, the town where IKEA was founded, is in a rather remote area of Sweden, it was difficult to reach potential customers in the bigger cities. Due to this, the IKEA catalogue was born in 1951, and Ingvar had already decided IKEA should sell good furniture at low prices.
Mail order distribution of bulky furniture was difficult and expensive, and products often got damaged. In 1956 the idea to take the legs off the LÖVET table was born, which led to the idea of selfassembly and flat packing.
https://www.ikea.com/es/en/this-is-ikea/about-us/our-heritage-pubad29a981
IKEA
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Ikea Strategy Proposal for Barcelona and Mumbai
The First IKEA Showroom
LÖVET Table now named as LÖVBACKEN.
Why are beautiful products only made for a few buyers? It must be possible to offer good design and function at low prices.” – Ingvar Kamprad
https://www.ikea.com/es/en/this-is-ikea/about-us/our-heritage-pubad29a981
BARCELONA
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Ikea Strategy Proposal for Barcelona and Mumbai
IKEA’S STORY ANIMATION
IKEA’s VISION
IKEA’s CULTURE
To create a better everyday life for the many people’, this is the IKEA vision. The vision also goes beyond home furnishing. IKEA wants to create a better everyday for all people impacted by their business.
IKEA culture reflects Swedish roots coming from Småland in southern Sweden. People living here are hardworking, down-to-earth, help each other and live in a close contact with nature around. These aspects are translated into IKEA values which form the basics of IKEA culture.
BUSINESS IDEA IKEA’s business idea is ‘to offer a wide range of welldesigned, functional home furnishing products at prices so low that as many people as possible will be able to afford them’.
https://ikea.jobs.cz/en/vision-culture-and-values/
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Ikea Strategy Proposal for Barcelona and Mumbai
IKEA KEY VALUES Different with a Meaning Togetherness Lead by Example Give and Take Responsibiliy Caring for People and Planet Cost Consciousness Renew and Improve Simplicity
https://ikea.jobs.cz/en/vision-culture-and-values/
IKEA
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Ikea Strategy Proposal for Barcelona and Mumbai
DEMOCRATIC DESIGN IKEA create products that have a beautiful design, good function, are sustainable, of good quality and are available at a low price. It is called “Democratic Design”, because IKEA believes that good home furnishing is for everyone.
https://www.ikea.com/es/en/?rooms=workspace https://www.ikea.com/es/en/this-is-ikea/about-us/vision-and-business-idea-pub9cd02291
IKEA
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Ikea Strategy Proposal for Barcelona and Mumbai
AFFORDABILITY IKEA aims to be accessible and available for all by creating good design at low prices.
https://digitalsynopsis.com/advertising/ikea-affordable-products-saudi-arabia-ogilvy/
IKEA
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Ikea Strategy Proposal for Barcelona and Mumbai
MISTELN Water Nozzle to reduce water wastage
Vegan Meat Balls
Energy efficient LED bulbs
SUSTAINABILITY IKEA believes in creating a future that is PEOPLE AND PLANET POSITIVE. IKEA focuses on economising with resources. They have been making more from less, turning waste into resources, sourcing energy and materials in a responsible way and protecting natural resources. They also support education of children, help refugees and participate in different supporting programs via IKEA Foundation and in cooperation with UNICEF.
https://www.ikea.com/es/en/this-is-ikea/about-us/were-all-in-this-together-pubc8331c51 https://ikea.jobs.cz/en/vision-culture-and-values/
IKEA
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Ikea Strategy Proposal for Barcelona and Mumbai
Sustainable cotton
Promoting Equality and diversity
“Sustainable living has to be easy, and the most natural choice.” – Malin Pettersson-Beckeman, Sustainability Communication Manager, Inter IKEA Group
https://www.ikea.com/es/en/this-is-ikea/about-us/a-sustainable-ikea-pub0b61e238
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Ikea Strategy Proposal for Barcelona and Mumbai
Type of Segmentation
Segmentation Criteria
IKEA TARGET Customer segment
Geographic
Region
Europe,America, Asia, Asutralia, Russia
Density
Urban
Gender
All Genders
Life Cycle Stage
Bachelor Stage Young, single people not living in home Newly married couples. No children Full nest (I, II, III) Married couples with Children under six, six or above, dependent children Empty Nest (I,II) Older married couples with no children living with them, retired. Solitary Nest (I,II) Labour force, Retired
Occupation
Students, Employees, Professionals
Demographic
https://www.vox.com/culture/2016/12/30/14114306/ikea-shopping
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Ikea Strategy Proposal for Barcelona and Mumbai
Ikea Target group - Millenials
Type of Segmentation
Segmentation Criteria
Behavioral
Degree of Loy- Hardcore Loyals alty Softcore Loyals Switchers
IKEA TARGET Customer segment
Benefits sorts
Cost effectiveness
Personality
Easy Going and Determined
User Status
Non-users, Potential Users, First time users and regular users
Psychographic Social Class Life style
Lower class, Working class and Middle class Resigned Struggler Mainstreamer Explorer
https://www.vox.com/culture/2016/12/30/14114306/ikea-shopping
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Ikea Strategy Proposal for Barcelona and Mumbai
Data collected from a survey by IKEA in the US showing how Millenial’s social activity translates to purchase activity KEY TAKE AWAY - The IKEA social media campaign is going to focus on 25-35 urbanites, single professionals and young families, who live in smaller city apartments and plan to move or make improvements to their space.
The Swedish furniture maker has become synonymous with that period in our lives, when we’re too poor to buy expensive investment pieces. It’s not exactly a negative thing, but there’s a sense that IKEA may be starter furniture. The brand has become a staple for this period of life, but looks to retain a relationship with this customer as they upgrade their jobs, relationships and homes. - Article by WIRED, mothly American Magazine
https://ikeasocialmediamarketingplan.wordpress.com/target-audience/
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FY 2020 IKEA HIGHLIGHTS Ikea retail sales reached EU 39.6 Billion and online retail went up to 45% higher than FY 2019
Supported communities and laid groundwork for a positive recovery from COVID-19
217,000 co-workers made it happen
2020 year edition of the IKEA catalogue marked the 70th birthday
IKEA collaborated with some of the world’s leading brands, businesses and designers- as well as refugees and social businesses
Billion in IKEA Retail Sales
Launched a collection of digital experiments with a range of design and technology studios to create a better home.
IKEA Sales Location
https://about.ikea.com/en/about-us/year-in-review
IKEA co-workers around the world
IKEA
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Ikea Strategy Proposal for Barcelona and Mumbai
Customers were offered more than 14 million spare parts Launch of a better meatball- without meat More Inclusice range to meet local needs at affordable prices New locations have opened in Moscow, Seoul, Kiev, Macau and several other cities around the world
https://about.ikea.com/en/about-us/year-in-review
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Ikea Strategy Proposal for Barcelona and Mumbai
High level Material Topics Health and well being Life at home and work impact
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Resource efficiency Climate Footprint Material use Sourcing Production Impact Logistics Impact Operations Impact Human Rights Decent work Social Impact
Key Challenges
Unsustainable consumption
IKEA
He su
Climate change
Cir Clim
Inequality
Fai
PEOPLE AND PLANET POSITIVE
Focus Areas
ealthy and ustainable living
rcular and mate Positive
ir and Equal
IKEA Commitments Inspiring and enabling people to live healthier and more sustainable lives Promoting Circular and sustainable consumption Creating a movement in society around better everyday living
Transforming into a circuar business Becoming circular positve Regenerating resouces, Protecting ecosystems and improving biodiversity
Providing and supporting decent and meaningful work across the value chain Being an inclusive business Promoting Equality
https://gbl-sc9u2-prd-cdn.azureedge.net/-/media/aboutikea/pdfs/ikea-sustainabilityreports/ikea_sustainability-report_fy20_.pdf
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Ikea Strategy Proposal for Barcelona and Mumbai
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Saving Water at Home
Home Solar, Clean Energy
Food is Precious. How to avoid Waste
Eliminate single use Plastic
How we work with chemicals
Veggie Hot Dog
Healthy and sustainable living
IKEA has a big opportunity, and responsibility, to lead the way by making healthy and sustainable living affordable, desirable and accessible for the many people. People’s interest in healthy and sustainable living has steadily increased over time, further accelerating during the COVID-19 pandemic. A global consumer study on healthy and sustainable living, completed during FY20, shows that people have a strong desire to become healthier and more sustainable, but that more affordable solutions are needed to help make this a reality.
Results from the study also show that three out of four people surveyed want to reduce their impact on the environment, and choose products that last longer. The number one action people want companies to take, according to the report, is to offer more affordable products and services that are better for both people and the environment. A significant number of meat eaters would be willing to switch to plant-based alternatives if these taste equally good and have the same price and nutritional value as meat products. The younger generations are more likely to want to make changes
https://gbl-sc9u2-prd-cdn.azureedge.net/-/media/aboutikea/pdfs/ikea-sustainabilityreports/ikea_sustainability-report_fy20_.pdf
IKEA
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Ikea Strategy Proposal for Barcelona and Mumbai
Turning Plastic waste into texttiles
From waste to renewable energy
Zero emissions for home delivery
Climate Positive
Circular Services
Greener Transportation modes
Circular and Climate Positive
Climate change, and the increasing global use of natural resources, is already impacting the IKEA business, and more importantly, the lives of people and wildlife. To become people and planet positive, IKEA must continue to further develop responsible sourcing programmes, continue to improve resource utilisation and dramatically reduce the greenhouse gas (GHG) emissions (in absolute terms, in line with the 1.5°C target), independently of how much the IKEA business grow.
https://gbl-sc9u2-prd-cdn.azureedge.net/-/media/aboutikea/pdfs/ikea-sustainabilityreports/ikea_sustainability-report_fy20_.pdf
IKEA
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Ikea Strategy Proposal for Barcelona and Mumbai
Climate Footprint at each stage of IKEA Value chain (million tonnes CO2 eq) IKEA aims to reduce Climate footprint (million tonnes CO2 eq) in absolute terms by 15% as compared to FY16
Although wood represents the largest share of material, metals have a higher climate footprint since they are more energy intensive to produce. IKEA aims to significantly increase recycled content for metals.
Circular and Climate Positive
And by transforming into a circular business, IKEA aims to create a systemic change forthe whole value chain. Materials are the biggest part of the IKEA climate footprint.
Material Foot Print v/s Material Weight
By prolonging the life of products and materials and accelerating the shift to 100% renewable energy, IKEA can reduce our climate footprint significantly. The aim is to end dependency on virgin fossil materials and fuels. In this way, IKEA will also contribute to a world of clean air and water and improved biodiversity.
https://gbl-sc9u2-prd-cdn.azureedge.net/-/media/aboutikea/pdfs/ikea-sustainabilityreports/ikea_sustainability-report_fy20_.pdf
IKEA
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Ikea Strategy Proposal for Barcelona and Mumbai
Sustainable IKEA value chain
Protecting Migrant workers
Co creating change during a crisis
Making of a truly good cup of coffee
Being an Inclusive business
Children’s rights on the agenda
Fair and Equal
2020 has been an extraordinary year, one where IKEA’s focus has been fully on protecting the health, wellbeing and livelihoods of people throughout the IKEA value chain. The COVID-19 pandemic has had a huge impact on people everywhere. Already vulnerable groups of people are being hit the hardest, which is increasing inequality. And it is IKEA’s commitment to create fairness andequality, and a better everyday life for the many people.
Projects like Responsible Wage Practices, on the Human Rights Baseline Assessment, ongoing efforts to strengthen considerations for children’s rights in the business operations are being carried out and the commitment to equality and decent work. IKEA wants to fluence this positive change through the enablers of advocacy, ccreation, partnership, entrepreneurship, innovation, and inclusiveness
https://gbl-sc9u2-prd-cdn.azureedge.net/-/media/aboutikea/pdfs/ikea-sustainabilityreports/ikea_sustainability-report_fy20_.pdf
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Ikea Strategy Proposal for Barcelona and Mumbai
End poverty in all its forms everywhere Teaming up with social entrepreneurs to reduce economic poverty, empower women and tackle social and environmental challenges in communities.
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End hunger, achieve food security and improved nutrition and promote sustainable agriculture Reducing food waste in all IKEA stores globally. Working towards a more sustainable food system, including better nutrition, better proteins, less food waste and responsible agriculture.
Ensure healthy lives and promote wellbeing for all at all ages All IKEA products and solutions to be designed with health and sustainability in mind. Establishing and supporting communities on topics related to a healthy and sustainable life at home. Taking the lead and advocating for a healthy and sustainable society. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all Ensuring access to competence and skills development, enabling people to grow and reach their full potential. Through IWAY, the IKEA supplier code of conduct, we communicate and ensure that our suppliers promote and provide work opportunities for young people. Achieve gender equality and empower all women and girls Striving to build a diverse, inclusive workplace, where everyone feels comfortable being themselves.Promoting equality, including diversity and gender equality on all levels, across all businesses, and across all IKEA markets, as well as reaching and maintaining gender-equal pay.
Ensure availability and sustainable management of water and sanitation for all Focusing on products and solutions-related, resourceefficient consumption of water. Becoming water positive.
Ensure access to affordable, reliable, sustainable and modern energy for all Focusing on products and solutions related to clean energy. Striving towards 100% renewable energy across the IKEA value chain.
Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all Providing and supporting stable, regular, and predictable employment. Ensuring that everyone in the IKEA value chain has a voice, and is engaged and empowered to play an active role in their workplace. Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation Driving innovation to use wood in smarter ways and for storing carbon for as long as possible. Aiming to transform the industry and make responsible forestry the norm.
Reduce inequality within and among countries Contributing to responsible recruitment and supporting the Employer Pays Principle.
https://gbl-sc9u2-prd-cdn.azureedge.net/-/media/aboutikea/pdfs/ikea-sustainabilityreports/ikea_sustainability-report_fy20_.pdf
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Ikea Strategy Proposal for Barcelona and Mumbai
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Make cities and human settlements inclusive, safe, resilient and sustainable Focusing on products and solutions related to clean air. Improving the share of alternative fuels in product transport.
Ensure sustainable consumption and production patterns Developing and promoting affordable, complete home furnishing solutions and knowledge, with the primary function to improve people’s everyday health, wellbeing and ability to live within the boundaries of the planet. Promoting circular and sustainable consumption. Designing every product from the very beginning to be reused, refurbished, remanufactured, and eventually recycled. Take urgent action to combat climate change and its impacts Drastically reducing greenhouse gas emissions from the IKEA value chain, while still growing the IKEA business. Storing carbon in land, plants and products. Improving environmental standards in the IKEA value chain through IWAY, the IKEA supplier code of conduct.
Conserve and sustainably use the oceans, seas and marine resources for sustainable development Leading regenerative projects to clean polluted waters and protect biodiversity, including leading projects to prevent plastic pollutants from entering waterways and oceans. All seafood should be certified by the Aquaculture Stewardship Council (ASC) and the Marine Stewardship Council (MSC). IKEA belongs to the NextWave consortium of companies dedicated to creating demand for ocean-bound plastic.
Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, halt and reverse land degradation and halt biodiversity loss Being forest positive. Sourcing from more sustainable sources. Improving environmental standards in the IKEA value chain through IWAY, the IKEA supplier code of conduct. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels Business ethics and working together to secure a responsible business in the full IKEA value chain.
Strengthen the means of implementation and revitalise the global partnership for sustainable development Driving and supporting change together with others to reach the IKEA sustainability goals.
https://gbl-sc9u2-prd-cdn.azureedge.net/-/media/aboutikea/pdfs/ikea-sustainabilityreports/ikea_sustainability-report_fy20_.pdf
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Ikea Strategy Proposal for Barcelona and Mumbai
GLOBAL VALUES
COMMUNITY
COMMITTED
COMMERCE
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Ikea Strategy Proposal for Barcelona and Mumbai
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Ikea Strategy Proposal for Barcelona and Mumbai
NEW URBANSIM
TA L
N PH YG I
N
IG ES D
RS
PE L
Y OR T A CIP
ON A
R PA
N
TI
IS A TIO
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TIO IZA
AL
SP AC ES
C LO SUSTAINABILITY AFFORDABILITY DEMOCRATIC DESIGN
DECONSTRUCTIVE RETAIL
The following terms were deduced from the conceptual board inorder to propose a new strategy in the two cities; Barcelona and Mumbai. IKEA wants to come closer to the city and it’s people. Hence, A survey was also conducted to understand the needs and customer perception of IKEA in Barcelona which is summarised in the fourth chapter.
IKEA
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Ikea Strategy Proposal for Barcelona and Mumbai
BARCELONA
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Ikea Strategy Proposal for Barcelona and Mumbai
Barcelona, the capital of Catalonia, has a population of 1,600,000 people and is at the heart of a metropolitan region of close to 2,500 km2 with nearly 5,000,000 inhabitants, representing 63.8% and 10.3%of the Catalan and Spanish population, respectively. In relation to the consolidated metropolitan agglomerations, the population voume of the metropolitan region of Barcelona is approximately 25% that of New York, while it is higher than the areas of Berlin, Montreal and Stockholm.
Age Structure
Male Population 47.8%
Female Population 52.15%
Life Expectancy
Birth Rate
https://www.barcelona.cat/internationalwelcome/sites/default/files/ DataSheet2018Web_eng_1.pdf
Mortality BARCELONA
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Ikea Strategy Proposal for Barcelona and Mumbai
The cosmopolitan, diverse and intercultural spirit of Barcelona can be seen in the fact that 18.5% of the city’s residents are foreign - the highest percentage in history - and for the first time ever, this collective exceeds 300,000 residents.
Foreign Population
With regard to access and economic infrastructures, in an area of 5 kilometres, the city offers an international airport, the port, the trade fair, Zona Franca logistics and industrial area and a logistics platform, which altogether offer huge potential as a logistics centre of the Mediterranean. Mediterranean Corridor
https://www.barcelona.cat/internationalwelcome/sites/default/files/ DataSheet2018Web_eng_1.pdf
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Ikea Strategy Proposal for Barcelona and Mumbai
In terms of environment, Barcelona’s compact, Mediterranean city model favours sustainable mobility - which represents 85% of internal journeys - and Barcelona stands out in prestigious rankings such as the Sustainable Cities Mobility Index 2017, which places it as the 21st city in the world and the 15th in Europe in this regard. Barcelona is currently a benchmark at European level for saving water. The consumption of water per inhabitant and day was 162,5 litres in 2016, which is 9% less than in 2007. Barcelona also has a relatively low per-inhabitant volume of CO2 equivalent emissions compared with other cities in the world.
https://www.barcelona.cat/internationalwelcome/sites/default/files/ DataSheet2018Web_eng_1.pdf
Water Consumption
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PLACE OF PURCHASES
TYPOLOGY OF COMMERCE OF PURCHASES
BARCELONA CONSUMER ANALYSIS Barcelona center continues to be the focus of attraction in the purchase of personal and household equipment outside the municipality of residence due to the combination of «leisure-shopping» and large-scale shopping (shopping malls, large warehouses, ...) and franchised formats. The current consumer is more demanding in service and variety, we must take into account new behaviors and types of consumption in order to adapt to their needs and demands (greater specialization, more quality, competitive in price,… ).
15.5%
of the Population buys atleast once a week ONLINE.
9.4% of catalans buy online more than once a week
97.2%
of consumers are satisfied with the service received buying online.
h»ps://ajuntament.barcelona.cat/ comerc/en https://ajuntament.barcelona.cat/ mercats/ca/noticia/enquesta-dhzabits-de-consum-i-de-compraa-laprovzncia-de-barcelona
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92% of the Barcelona citizens surveyed were satisfied with the city and the place (neighbourhood) where they live, one of the highest percentages of the 79 cities analysed. The public space, safety, public transport, cleanliness and trust in neighbours obtained relatively good results. -The Quality of Life in European Cities Eurobarometer published by the European Commission in 2016
https://www.barcelona.cat/internationalwelcome/sites/default/files/ DataSheet2018Web_eng_1.pdf
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SUSTAINABILITY CRITERIA IN SPAIN The emphasis on environmentally-friendly products, fair and ethical trade, and decent jobs in supplier companies has strong consumer support. But sustainable sourcing also draws equally strong support from the retailers themselves. Most expect such business to increase significantly in the next five years.
While the responses varied slightly from country to country, the trend is overwhelmingly positive. Not only have retailers witnessed a growth in sustainable sales, but in each country, a higher number of retai ers expect growth to continue into the next five years.
85% of retailers report increased sales of sustainable products over the past five years Drawing on information from 550 retailers across the five surveyed markets, this demonstrates promising growth. Moreover, 65% of them report an increase of more than 10%.
92% of retailers expect sales in sustainable products to increase in the next five years Retailers express optimism for high growth, with around three-quarters of these companies expecting the growth to exceed 10%.
https://www.intracen.org/uploadedFiles/intracenorg/Content/Publications/ EU%20Market%20for%20Sustainable%20Products_Report_final_low_res.pdf
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78% report an increase in recent sustainably sourced product sales,
93% expect further increases in the future.
As per the report of European Union market of sustainable sales there is an incredible rise in the sales of sustainable products in the coming five years. However sustainable sales in household and office furniture category is unexpectedly low
54% of retailers use their
own-label products to meet their sustainability commitments.
39%
of retailers sell organic products. The organic market in Spain reached €1.9 billion in 2017.
https://www.intracen.org/uploadedFiles/intracenorg/Content/Publications/ EU%20Market%20for%20Sustainable%20Products_Report_final_low_res.pdf
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SURVEY
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Ikea Strategy Proposal for Barcelona and Mumbai
Survey conducted by the authors in the city of Barcelona
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Survey conducted by the authors in the city of Barcelona
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“IKEA is perceived as an affordable brand and celebrated for a good design in Barcelona but is not considered to be sustainable.”
IKEA SURVEY ANALYSIS IKEA products are cheap for the Barcelona market. There is a strong competition that IKEA faces from the local furniture brands in the city. People prefer to customise their furniture which currently IKEA does not offer. IKEA is not completely recognised as a sustainable brand yet which can be a growing concern. Majority of the people are saturated with the large format stores of IKEA and would rather prefer to have a different experience as currently their experience only lies in the product and not in the store concept. The buying approach is still traditional for half of the population where they prefer to see the product in the store before making the purchase but is likely to change with the fast growing city life and the convenience of buying furniture online. More than half of the population use IKEA’s Delivery and assembly service inspite of the DIY culture IKEA is perceived as a Cheap and Affordable brand with a good value for money. The feasibility of assembling and maintaining and the functionality of the furniture is what IKEA is celebrated for in Barcelona’s market.
Survey conducted by the authors in the city of Barcelona
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LIMITED AND UNSATISFYING
IKEA DIAGNOSIS One of the reasons we believe is the after sales service provided by IKEA which is limted and unsatisfying. Improving the after sales service will change the perception of IKEA. There are only few pieces of furniture that can be returned back to IKEA at the moment with terms and conditions to follow. There are no engaging tutorials or demonstrations on how to take care of furniture or recycle the furniture. There are no links of donation or any methods to give away used furniture. In a city of Transit, with increasing circulating population there is a huge amount of furniture that is used for a short period of time which the customers would like to return if possible as they move to another city or head back to their countries. The residents of the city would also be interested in new ways to refurbish the furniture in order to have a long lasting relationship and IKEA can continue to extend it’s product life. Keeping all these factors in mind, We wanted to propose a new retail model of IKEA. The purpose is to educate and encourage customers into creative use and reuse of their furniture. proposing a model that is digitally and economically successful and one that addresses social and environmental issues.
https://www.ikea.com/es/en/campaigns/recycle-your-furniture-pubf66ee191
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STRATEGY
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IKEA
SELL/ REPAIR/ RESELL
RETURN/ DONATE
CUSTOMERS
REFURBISH
RECYCLE
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From Empty Trolleys to packed boxes of Used furniture
IKEA CIRCULAR STATIONS IKEA service stations that provides the following 1. Affordable Repair services 2. Return services and the product can be eventually resold or recycled by IKEA 3. Live demonstrations or workshops inorder to refurbish and take care of the furniture 4. Selling of the Spare Parts
IKEA
CUSTOMERS
Bi-directional relationship with the customers
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RETURN
REPAIR
SP
PARE PARTS
LIVE DEMONSTRATIONS
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IKEA NEW LABELS 1. Introducing new labels for the furniture that can be returned back to IKEA within the time period set by IKEA to inform customers in advance at the time of buying. 2. The same furniture can be sold again to the customers which can have second hand furniture labels and a positive cause. 3. IKEA subscription-like-model for renting and returning furniture.
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POTENTIAL IN WASTE in Spain, 56.7% of waste If the principles of the circuis dumped in landfills, while lar economy were applied, opportunities for reus43.3% is recycled or re- the ing identified and quantified used. Specifically, 13.5% is plastic packaging represent used to generate energy, at least 20% of the current 18.3% is recycled and 11.5% market. is used for composting and There is a lot of potential in digestion. Spain is below the waste that IKEA can focus average of the European Unon for creating new furniion, with an average of 52% ture and contributing to the being recycled or reused, nation’s recycled waste per8.7% points higher than in centage. IKEA can also manSpain. The remaining 48% of age to become circular and solid waste end up in landnot lead to any further addifills (in a technically inaption in the waste generated propriate way), dumped in in the country. the environment or incinerated. Of the 48% of dumped waste, 41% is disposed of in landfills, 7% ends up in land, river or marine ecosystems and 1% is incinerated.
https://www.eae.es/en/news/eae-news/433-waste-spain-recycled-or-reused-87-points-below-averageeuropean-union
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LOCAL PRODUCTION OF RECYCLED GOODS It is no doubt that IKEA has been sourcing materials from different parts of the world to reduce the manufacturing and material cost but it is time for IKEA to consider local production within the city for a circular business.
https://www.ruapapel.com/en/
With the proposed model, IKEA can collaborate with local production company that helps in waste recovery and recycling inorder to produce the new recycled furniture within the city of Barcelona, creating job opportunities and collaborating with the local partners.
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IKEA NEW ONLINE SERVICES Creating a new Relationship amongst the customers of IKEA by having an online portal where a customer can sell any of his old IKEA furniture to other customers or donate it under the IKEA online Portal.
IKEA
CUSTOMERS
CUSTOMERS
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The idea is to provide a service to donate directly to the healthcare foundations in Barcelona by collecting the furniture at the circular hub or pick up from the house and delivered directly to the foundations. The customers can also choose to directly donate to these foundations through personal means. The goal is to open a portal useful to both the parties inorder to extend the life of the furniture and rotating it within the community.
https://fundacionronald.org/casa-barcelona/ https://lacasadelsxuklis.org/
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COMMUNITY
CO-CREATION
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SUSTANA
COMMIT
CIRCULAR HUBS
AFFORDABILITY
COLLABO
LOCAL B
ABILITY
TMENT
ORATION
DEMOCRACY
COMMERCE
GREEN NEIGHBOURHOOD
SOURCING AND LOCAL PRODUCTION OF RECYCLED GOODS
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INDIA
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Gross domestic Product
https://www.indexmundi.com/india/demographics_profile.html https://geology.com/world/india-satellite-image.shtml
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Climate data of the country
https://tradingeconomics.com/india/gdp-growth-annual https://www.worldometers.info/world-population/india-population/
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DIVERSITY
FESTIVALS
Because India is so vast and is divided in so many States, languages and religions, its culture is also much diversified. Each region possess its own local holidays, festivals and cultural differences.
India is a land of festivals and fairs. Virtually celebrating each day of the year, there are more festivals celebrated in India than anywhere else in the world. Each festival pertains to different occasions, some welcome the seasons of the year, the harvest, the rains, or the full moon. Others celebrate religious occasions, the birthdays of divine beings and saints, or the advent of the New Year. A number of these festivals are common to most parts of India. However, they may be called by different names in various parts of the country or may be celebrated in a different fashion. Some of the festivals celebrated all over India are mentioned below. However, this section is still under enhancement.
LANGUAGES India is one of the country in the world where linguistic diversity is the most important. There is no official language, although Hindi – mother tongue of almost half of the population – is recognised by the government as such. English is used extensively in business and administration and has the status of a subsidiary official language. There are also 122 important languages and no less than 234 mother tongues.
http://www.iccrindia.net/culture/
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TRADITIONALITY AND INDIAN CONSUMERS Indian consumers are now favouring traditional cookware for their health benefits and sustainability. A lot of Indian homes that still have mortar and pestle in the kitchen, which not just personifies rustic charm, but helps crush ingredients, releasing essential oils and full-bodied flavours. Crushing them is far more effective than using a machine in exposing the vital flavours. It is one of the most ancient methods used in cooking that brings together a sensational product.
Consumers are becoming conscious of the importance of sustainable cookware and how it can improve their lives.Traditional practice recommends specific metals for specific purposes, for example copper for water, kansa for food, brass (with tinning) for cooking. The dish one uses transfers trace elements of the metal that is beneficial, for instance, copper-charged water transmits a certain amount of copper required by the human body. Stoneware is considered one of the healthiest material to eat from.
https://www.architecturaldigest.in/content/traditional-cookware-indian-kitchens-copperutensil/#s-cust4
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Traditional cookware consumes around 15 percent lesser fuel as they retain heat, cook evenly and faster. Secondly, most of the traditional cookware retain over 98 percent of minerals of what is being cooked in it. Thirdly, they consume lesser oil. And lastly, well-tested traditional cookware does not have harmful chemical coatings giving an authentic taste and aroma to the food cooked in them.
The Alkaline nature of clay interacts with acidity in food and neutralises it, aiding better digestion. Kansa is a mixture of 85 percent copper and 15 percent tin and as per Ayurveda, eating from kansa vessels purifies the food, improves immunity, and enhances brain function. If you prepare and drink filter coffee in brass tumblers, the alkaline content of the metal will cut out the acidity of the coffee and enhance the flavour as well as aroma of your favourite dark liquid. This is where IKEA can consder including a wide range of products in their kitchen collection to create a value of traditionality and support the local culture of the country.
https://www.architecturaldigest.in/content/traditional-cookware-indian-kitchens-copperutensil/#s-cust4
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India had it’s first IKEA store in Hyderabad and recently another store in Navi Mumbai (Outside and away from the main city of Mumbai) was opened in December 2020. We carried out a survey to understand the position of IKEA in the Indian Market and custome perception of the brand.
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SURVEY
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Ikea Strategy Proposal for Barcelona and Mumbai
Survey conducted by the authors in INDIA
Survey conducted by the authors in INDIA
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Survey conducted by the authors in INDIA
Survey conducted by the authors in INDIA
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Urban and ergonomic brand Everything under one store
Not cheap but affordable DIY Concept of IKEA Points of sale
S W O T Growing Urban Population Median age - 28.4 Positive demand in two and three tier cities Purchasing power parity
Local Carpenters Huge growing gap between rich and poor
IKEA SURVEY ANALYSIS IKEA products are not cheap but still affordable for a major segment of the society. There is a strong competition that IKEA will face from the unorganised sector of furniture retail as most of the people prefer to have majority of the furniture made through local carpenters.This is more challenging to IKEA because people prefer to customise their furniture. There are other local furniture brands selling furniture through many channels so IKEA needs to strenghten its omnichannel strategy.
Majority of the people are happy with the large format stores of IKEA however it is currrently not present everywhere and there is a positive demand in metropolitan and two and three tier cities as well for IKEA. IKEA needs to also have the delivery and assembly service at a low cost in INDIA because the concept of DIY might not work at all. IKEA is perceived as an Urban and Ergonomic brand. It offers a wide range of selection and this diversity is very well received by the people of India. The convenience to buy everything under one store, the ease of maintenance and it's finished quality of products is what makes IKEA as a brand quite unique in the Indian Market.
https://locnapps14.medium.com/ikea-india-localisation-case-study-13ebbca7a026
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Mumbai, The city that never sleeps. It is the busiest city in India that is known for its 24/7 running nature, infrastructure, population and food. Mumbai, the capital of Maharashtra is also the financial, commercial and entertainment capital of India. It’s home to a 20.5 million people and is found on the West Coast of India. The city produces about 5 % make the most India‘s GDP and is the wealthiest city in South, West and Central Asia.
https://worldpopulationreview.com/world-cities/mumbai-population
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Mumbai is the financial, commercial and the entertainment capital of India. Mumbai has the eighthhighest number of billionaires of any city in the world and Mumbai’s billionaires had the highest average wealth of any city in the world in 2008. The city houses important financial institutions and the corporate headquarters of numerous Indian companies and multinational corporations. It is also home to some of India’s premier scientific and nuclear institutes. The city is also home to Bollywood and Marathi cinema industries. Mumbai’s business opportunities attract migrants from all over India.
It is also one of the world’s top ten centres of commerce in terms of global financial flow, generating 6.16% of India’s GDP, and accounting for 25% of industrial output, 70% of maritime trade in India (Mumbai Port Trust and JNPT) 70% of capital transactions to India’s economy. MELTING POT - All migrants relocating to Mumbai for Job opportunities 42% of the population is made up of Maharashtrians (Mumbai residents) 19% account for the Gujaratis, while people from other areas of the country account for the rest of the population.
https://worldpopulationreview.com/world-cities/mumbai-population
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URBANIZATION AND GROWING MIDDLE CLASS Rapid Urbanisation in India and Growing Demand for modular and compact furniture is expected to positively impact the growth of furniture market in near future. Further, growing urbanisation in Indian States such as Gujarat, Maharashtra, Tamil Nadu and others is supporting the culture of housing societies. 95% of the furniture market is unorganised. However, the low cost furniture products offering by furniture offering by unorganised players further decrease the revenues of major market players in India.
Further, the unorganised players sell their product through local shops which decreases the cost of branded furniture. The high cost of quality and durable furniture in India is the major restraint for furniture industry. The high cost of wood and leather further increase the cost of overall product.
https://www.slideshare.net/RebinJAnselm/ikea-india-business-pricing-strategy
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BIGGEST SLUM IN ASIA - DHARAVI Dharavi is a locality in Mumbai, Maharashtra, India, considered to be one of Asia’s largest slums. Dharavi has an area of just over 2.1 square kilometres (0.81 sq mi; 520 acres) and a population of about 1,000,000. With a population density of over 277,136/km2 (717,780/ sq mi), Dharavi is one of the most densely populated areas in the world.
https://www.bbc.com/news/world-asia-india-53133843
The Dharavi slum was founded in 1884 during the British colonial era, and grew because the expulsion of factories and residents from the peninsular city centre by the colonial government and from the migration of rural Indians into urban Mumbai. For this reason, Dharavi is currently a highly diverse settlement religiously and ethnically.
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The structured congruence of the Bandra Kurla Complex to the right stands in sharp contrast to the dense conglomeration of shanties of Dharavi on the left. Picture by Johnny Miller
Mahim Park and Shanties of Dharavi Picture by Johnny Miller
Dharavi has suffered from many epidemics and other disasters, including a widespread plague in 1896 which killed over half of the population of Mumbai.Sanitation in the slums remains poor. Dharavi has been transformed from an open space to a maze of narrow alleys. While the population keeps growing, the roads and facilities remain the same.
https://www.bbc.com/news/world-asia-india-53133843
Clean drinking water is still a major problem.For every application for a new water connection, the municipal authorities make the people run from pillar to post and harass themwith numerous cumbersome procedures and at the end, since the construction is not legal, the people end up without getting any connection.The people here then opt for an illegal connection. With few public toilets and most people sharing common toilets with poor drainage, the area also faces sanitation issues.
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DHARAVI - A HIDDEN TREASURE At the heart of Dharavi are 20,000 mini-factories. Inside the beehive of Mumbai's central slum, skilled teams of small-scale manufacturers, from leather workers to garment stitchers form a shadow world that the government refuses to recognise. The slum is home to thriving leather, pottery and textile stitching businesses. It is also Mumbai's main hub of plastic recycling. While researching on various slums in Mumbai, a journalist from UK found that Dharavi stood out in terms of the talents and skills of its dwellers.She said she was impressed with the quality of handicraft skills that people in the area had. Given the right opportunity and proper guidance, they could earn a living using their skills, she said.
Dharavi, at the centre of Mumbai, is a world in itself, a treasure of skilled labourers that the outside world is largely unaware of. At the heart of Dharavi are 20,000 mini-factories. Inside the beehive of Mumbai's central slum, skilled teams of small-scale manufacturers, from leather workers to garment stitchers form a shadow world that the government refuses to recognise. The slum is home to thriving leather, pottery and textile stitching businesses. It is also Mumbai's main hub of plastic recycling.
https://www.theguardian.com/cities/2014/nov/25/dharavi-mumbai-mini-factories-slum
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Leather Stitching
Shoe making
Weave on wood
Dyeing
Pottery
Weaving
Weaving
Preparing a clay bed
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Realising the potential in a Slum like Dharavi which thrive on local crafts and also has the biggest recycling industry of mumbai, IKEA can encourage the traditions by supporting the craftsman of Dharavi. IKEA can also give Dharavi a recognition that the government refuses to give and create job opportunities, ensure circularity and showcase a strong sense of belonging in the city of Mumbai.
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STRATEGY
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Ikea Strategy Proposal for Barcelona and Mumbai
MADE IN INDIA
IKEA
TRADITION AND TRUST OF PEOPLE
DHARAVI CRAFTSMAN
LOCAL CRAFTS AND PRODUCTS
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IKEA TRADITIONAL HUBS A proposal of small format IKEA concept store located within the city of Mumbai that is closer to it’s people and acts a connceting point with the main IKEA store in NAVI Mumbai. The store showcases local crafts and culture of the city by displaying the products specially made by the craftsman of Dharavi, offers a small on demand production service at the store along with repair services. This store becomes a small traditional Hub in the city that people can go to buy small scale products, Kitchen traditional wares, opt for design consultancy services. This model aims to bring IKEA’s vision of coming closer to people more local, accessible, emotional and Engaging.
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LOCAL CRAFTSMANSHIP TRADITIONAL KITCHENWARE ON DEMAND PRODUCTION
DESIGN
CONSULTANCY
MASS PERSONALISATION
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MUMBAI’S AFFORDABLE HOUSING STRUCTURE The key lever used for transformation in mumbai realestate was the steep recalibration of sizes, with 1bhk carpet areas being reduced by almost 175 sq.ft from average size of 450-500 sq.ft carpet area previously to as low as 325 sq.ft carpet area to match affordability of buyers. Incase of 2 bhk the sizes were almost halved from 800 - 950 sq.ft carpet areas to as low as 525 sq.ft. even the 3 bhk sizes which used to be expansive with range of 1250-1500 sq.ft carpet area curtailed to as low as 850 sq.ft. This typically means average room sizes shrinking from 18x 12 sq.ft to 12 x 10.5 sq.ft. Toilet sizes which were previously 8x 6 sq.ft to as small as 5 x 4 sq.ft. Living rooms shrinking from average lavish sizes of 20 x 15 sq. ft to 15 x 11 sq.ft.
Such prudent tailoring helped developers to trim sizes of typically 1bhk and 2bhk & 3 bhk by one-third to almost half of previous average carpet sizes. This move showed a greater adaptability by the buyers who started appreciating the designs with effective & usable space planning vis-a-vis lavish spreads of rooms and utility area. One reasoning possibly apart from affordability is practicality considering majority of nuclear families in mumbai are co-working and children are occupied for school & tuition classes. Also mumbai is witnessing surge in large families splitting into nuclear families, right sizing the needs of nuclear families is supporting the demand for such affordable smaller apartments.
https://economictimes.indiatimes.com/small-biz/productline/building-materials/why-mumbaikars-prefer-small-apartments/articleshow/70567072.cms
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FUTURE OPPORTUNITIES 1. Tie ups with the Government for affordable housing schemes. 2. Mumbai affordable housing have a much tighter layout than a typical 2 or 3 bhk residences hence the furniture and design solutions needs to be coherent and cohesive to work in a restricted environment. 3. In order to cater to tight layouts, more solutions for flexible, foldable and movable furniture. 4. To create a small switch from Mass production to Mass Personalisation by creating digital enablers for people to order and customise from the comfort of their homes in a crowde city like Mumbai. 5. Ikea neds to eventually expand to two and three tier cities of India where it becomes more accessible for people and the positive demand can be fulfilled.
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SUSTANA
COMMIT
COMMUNITY
CO-CREATION
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TRADITIONAL HUBS
AFFORDABILITY
COLLABO
LOCAL B
ABILITY
TMENT
ORATION
DEMOCRACY
COMMERCE
MADE IN INDIA
DHARAVI X IKEA
BUSINESS BARCELONA MUMBAI
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BIBLIOGRAPHY
MASTER RETAIL DESIGN ELISAVA_ FALL 2021 | Anum Wazir_Pakistan and Forum Shah_India
IKEA DATA REFERENCES https://www.ikea.com/es/en/this-is-ikea/about-us/our-heritage-pubad29a981 https://ikea.jobs.cz/en/vision-culture-and-values/ https://www.ikea.com/es/en/?rooms=workspace https://www.ikea.com/es/en/this-is-ikea/about-us/vision-and-business-ideapub9cd02291 https://digitalsynopsis.com/advertising/ikea-affordable-products-saudi-arabiaogilvy/4https://www.ikea.com es/en/this-is-ikea/about-us/were-all-in-this-together-pubc8331c51 https://www.vox.com/culture/2016/12/30/14114306/ikea-shopping https://ikeasocialmediamarketingplan.wordpress.com/target-audience/ https://about.ikea.com/en/about-us/year-in-review https://gbl-sc9u2-prd-cdn.azureedge.net/-/media/aboutikea/pdfs/ikea-sustainability-reports/ikea_sustainabil ty-report_fy20_.pdf https://www.ikea.com/es/en/campaigns/recycle-your-furniture-pubf66ee191 https://locnapps14.medium.com/ikea-india-localisation-case-study13ebbca7a026 BARCELONA REFERENCES https://www.barcelona.cat/internationalwelcome/sites/default/files/ DataSheet2018Web_eng_1.pdf h»ps://ajuntament.barcelona.cat/ comerc/en https://ajuntament.barcelona.cat/ mercats/ca/noticia/enquesta-dhzabits-deconsum-i-de-compra-a-laprovzncia-de-barcelona https://www.ruapapel.com/en/ https://fundacionronald.org/casa-barcelona/ https://lacasadelsxuklis.org/ SPAIN REFERENCES https://www.intracen.org/uploadedFiles/intracenorg/Content/Publications/ EU%20Market%20for%20Sustainable%20Products_Report_final_low_res.pdf https://www.eae.es/en/news/eae-news/433-waste-spain-recycled-or-reused-87-points-below-average-european-union
INDIA DATA REFERENCES https://www.indexmundi.com/india/demographics_profile.html https://geology.com/world/india-satellite-image.shtml https://tradingeconomics.com/india/gdp-growth-annual https://www.worldometers.info/world-population/india-population/ http://www.iccrindia.net/culture/ https://www.architecturaldigest.in/content/traditional-cookware-indiankitchens-copper-utensil/#s-cust4 MUMBAI DATA REFERENCES https://worldpopulationreview.com/world-cities/mumbai-population https://www.slideshare.net/RebinJAnselm/ikea-india-business-pricingstrategy https://www.bbc.com/news/world-asia-india-53133843 https://www.theguardian.com/cities/2014/nov/25/dharavi-mumbai-minifactories-slum https://economictimes.indiatimes.com/small-biz/productline/building-materials/why-mumbaikars-prefer-small-apartments/articleshow/70567072.cms CREDITS IKEA BADALONA Carmen Malvar Director Master Retail Elisava Francisco Fraguela Director and leader research, Home furnishing & Retail Design, IKEA BADALONA
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