Wednesday, May 15, 2013

IKEA: WHEN COST-CUTTING CAN BACKFIRE


I, like so many other people around the world, have a love affair with IKEA and their innovative products at good prices. Trimming costs in manufacturing has been an essential element in this, but lately I have noted that their cost-cutting is showing up in the shopping experience itself --  and that is a big mistake.

It used to be fun to go to my local IKEA and just look around and eat or have a latte, but the cafe' where you could get a very good latte has been removed. At the restaurant where the food used to quite good, there is no longer the same variety and the quality is down. This is no doubt a way to cut costs. But the cost-cutting has gone too far when you no longer feel inspired to go there. Self-defeating certainly for IKEA if people do not turn up. 

No more hand-made latte at my local IKEA.

IKEA introduced customers to a self-check system claiming that would be faster, but since they have reduced check out personnel generally, this is no longer a faster way. You still have to wait a very long time sometimes. Last month, a customer who desperately looked for someone to ask something, asked two women who loaded plastic shopping bags if they could help. "We do not work here" they said. By this they meant, that they worked for a subcontractor to load the bags and knew no more than that. Sure, this is a way of saving money for IKEA, but what impression does it give to customers?

Another ways IKEA cuts costs is to move production of items like napkins to a country that produces them in the cheapest possible way. That is how IKEA keep prices low and we benefit from it. Napkins and candles, that is what people often load up on at IKEA, and so do I. But the six packages of white napkins I bought two months ago emitted a sharp chemical smell. And it did not go away after the package had been opened. I looked at the country of manufacturing and noted that they were no longer made in Sweden. I wondered why no one had discovered that the napkins had a chemical smell ? Was their quality control at fault? Maybe this was a glitch, but what I discovered when I complained about this, was not very nice.

When I visited the kitchen department at IKEA, I told two young women who worked there about it and they quickly told me that it was no use telling them, they had no influence with the company as what they said did not matter much. It was much better to make the complaint in  a computer on the floor. This is a sad state of affairs, if people working at IKEA feel that way and cannot get their voices heard. I  decided to write to IKEA via their "contact" on their website. I got an immediate response on April 18, confirming receipt of the complaint and that they would respond no later that April 24 at 18.30 (6 PM). That seemed like a long time but hoped for an early reply.

On April 24 at !8.29, I got an email saying that their handling of claims took longer than usual and that they would when they had "dealt with my case". Oh, I thought, IKEA is contacting the factory and investigating the matter so they can give me a good reply with an explanation why the napkins had a strong smell of chemicals. That is maybe better than just offering compensation.

The days went and i heard nothing. On May, 10 I finally heard from IKEA again. This was 22 days later, more than three weeks!  I was eager to hear what their investigation had resulted in. With such a delay I expected an interesting response.

What had they done? Nothing. 
Did they apologize for the 22 day delay in responding?  No. 
Did they offer any compensation for the smelly napkins? No. 
Had they investigated my problem No.
So what did they say? 

They wondered if I still had the wrappers. They wanted a code of the wrapper indicating the time of production. That question could of course have been asked 22 days ago.
When i pointed out the lack of an apology for the three week delay and no offer of compensation, they offered me compensation for the price of four packages of napkins instead of the six I had bought. I suppose that saved them the value of two packages. Still cost-cutting, apparently. Considering the extremely bad handling of the complaint, and that they had a chance of making a larger gesture, they missed out big. Customer service at its absolute worst!

I still have a warm place in my heart for IKEA, but i do not like what I have experienced lately. They are on probation now. The napkin story and its many phases may seem small but raise a serious question about customer service. IKEA and its misplaced cost-cutting policies are not serving IKEA or it's customers well. 


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