Reissue: Costco, then Ikea: What could be the next megastore and why do we care?

New Zealanders will finally get to experience the labyrinth that is an IKEA store from December 4.

The new Sylvia Park site in Auckland is one of the company’s largest in the Southern Hemisphere – about the size of three rugby fields.

There’ll be thousands of products available online and in store, and yes, they will be serving up their famous Swedish meatballs in a 426-seat cafeteria.

So, why do we get so excited about international brands setting up on our shores? And, is there enough appetite for IKEA to succeed where others haven’t?

Today on The Front Page, Quantum Jump CEO and marketing expert Ben Goodale is with us to explain the hype around one of the world’s leading retailers coming to our shores.

Follow The Front Page on iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.

You can read more about this and other stories in the New Zealand Herald, online at nzherald.co.nz, or tune in to news bulletins across the NZME network.

Host: Chelsea Daniels
Editor/Producer: Richard Martin
Producer: Jane Yee

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:19):
Kyota at Chelsea Daniels here, host of the Front Page.
We're taking away breakover summer, but to help build the gap,
we're re issuing some of our most significant episodes of
twenty twenty five on behalf of the Front Page team.
Thanks for listening and we look forward to being back
with you on January twelfth, twenty twenty six. Kyota, I'm

(00:44):
Chelsea Daniels and this is the Front Page, a daily podcast.

Speaker 2 (00:48):
Presented by the New Zealand Herald.

Speaker 1 (00:54):
Kiwis will finally get to experience the labyrinth that is
an Ikea store from December fourth. The New Sylvia Parks
site in Auckland is one of the company's largest in
the Southern Hemisphere, about the size of three rugby fields.
There'll be thousands of products available online and in store,

(01:16):
and yes, they will be serving up their famous Swedish
meatballs in a four hundred and twenty six seat cafeteria.
So why do we get so excited about international brands
setting up on our shores.

Speaker 2 (01:31):
And is there enough appetite for Ikea.

Speaker 1 (01:34):
And their meatballs to succeed where others haven't? Today on
the Front Page, Quantum Jump, CEO and marketing expert Ben
Gooddal is with us to explain the hype around one
of the world's leading retailers. First off, Ben, what is

(01:56):
the significance of Ikea finally coming to New Zealand.

Speaker 3 (02:01):
I mean, I think there's a number of factors here.
It is a major, major retail brand globally and one
of Sweden's great exports. I think to a certain extent,
the sheer fact that so many Kiwis already have Ica
products in their homes, which they may be brought from
overseas or people are given to them, or they've bordered in.

(02:22):
And so it's a brand that almost feels like it's
been here for a while anyway, but but but actually
planting itself. And it's very grounding for an international brand
like that to arrive in New Zealand, not unlike Costcow
a couple of years ago. I think we go, Wow,
you know, we're finally there as a nation. We've got

(02:43):
an ike We've a Costco, We've got Nah and m
Sephora Victoria's Secret out of the airport. You know, brands
which are you know, living in a country and far
flung in the furthest away part of the world. In fact,
I've read today that we are the Ikea store in
Auckland will be the servist away from Sweden store that

(03:04):
they have. You know, it can be something when when
these brands turn up and they've got to us.

Speaker 2 (03:12):
In terms of Ikea.

Speaker 1 (03:14):
What makes it like I suppose the international juggernaut that
it is is.

Speaker 3 (03:20):
Firstly, I mean, the product is amazing, you know, it's there.
They're they're innovative, They're they're they're sustainable or as sustainable
as you can be within with any category like that,
and they're pushing to be more sustainable forever. They their
focus on design is is fundamental to their success, you know.

(03:41):
Be I mean I remember as a as as as
you know, probably not long after a left stool, going
to be opening of a first Ikea in London and
queuing up that day to get in, and I didn't
even really know what Ikea was something to do on
a on a Sunday, but but being bowled over by
by the design, you know, the that simple Swedish aesthetic

(04:06):
and you know it really it's not just furniture. Albeit
I also have cursed and I once foolishly brought a
foot on from Ikea, and I'm sure. If any anyone
watching this, imagine, you know, flat pack assembling of futon
in a time where I did not own a power drool,
so I had to hand handstrew it every last True,

(04:29):
it was the I have blisters and I was not
a happy person. But the futon was sensational.

Speaker 2 (04:37):
Well that's part of the fun of it, isn't it.
The flat pack?

Speaker 1 (04:41):
I mean I say fun in quotation marks because I
personally don't think it's fun.

Speaker 2 (04:45):
But in terms of I mean you mentioned London in
the What Where When? What would that have been?

Speaker 3 (04:50):
That was nineteen eighty eight? Yeah?

Speaker 2 (04:52):
Was it the same kind of huge sensation?

Speaker 1 (04:57):
It was even then than it is now because in
the eighties you didn't have social media or the Internet
and things like that.

Speaker 3 (05:03):
Yeah, it's funny. I was reflecting on that the other day.
I mean, it's almost I don't know I remember it.
I don't know why I was there. I don't know
how I knew it was going on. Maybe there was
an advert in the Evening Standard. It wasn't far from
my flat, but it I remember going to work it
the next day and wherever people were talking about it,

(05:24):
and so I guess it was. It must have been
on the news. It must have been on the radio.
Maybe there was a piece of it in the Standard
in the morning when people are getting on the tube
with their newspaper. But you're right. I mean, I think
it's funny now that having lived now with social media
for ten fifteen years, we almost forgotten how did these

(05:46):
things get shared and amplified and so on before all
that happened. But I guess we just found other ways.
I mean, apartment the meals, people talk to each other
about it.

Speaker 1 (05:54):
Do you think Ikea will have to adapt to the
key We market or is Ikea just Ikea?

Speaker 3 (06:01):
Well, I think initially, I mean they are just Ikea
their product range. They're not going to develop products just
for this market and all. You know, I'm not quite
sure what products we were uniquely we would uniquely need.
I mean, we're a lot different rest of the world. However,
they have done a lot of groundwork, which they've talked

(06:23):
about some of their media relations around going into Kiwi
homes and understanding what how key Wes use products, what
they need. I think probably understanding things like how key
We use their garages, as you know, as well as
their outdoors and so on. So I think probably it
will be more they'll show up with the ranging because

(06:45):
they they'll have a vast array of ranges, but not
everything will be as appropriate in Autland as it might
be in Tokyo or New York or whatever. So I think, yeah,
we'll get a profile which will be developed deemed appropriate
based on those insights.

Speaker 2 (07:04):
What do you make of the main freight partnership?

Speaker 1 (07:06):
Is that something quite unique for those who don't know
they're going to be doing this main freight to home
service and the offer will take heavier items into people's
homes if that was their preferred option. That's quite revolutionary
because I always fret when I buy something or a
piece of furniture thinking am I going to fit it
into my car?

Speaker 2 (07:26):
Or am I going to be able to carry this
up my drive? So that's quite a unique.

Speaker 1 (07:31):
Having a main freight, you know, a couple of them
actually lug it into.

Speaker 2 (07:35):
Your house is quite special.

Speaker 3 (07:37):
I think, yeah, well they are operating distribution in some
other markets, especially where they don't have those stores. I mean,
it's certainly a very smart, strong play for this market.
You know, suddenly you know they've only got one store,
but it's almost like have they got twenty nine stores,

(07:58):
and we're also living in an evolved age of e commerce.
People's happiness buying or line ever since Covid was a
bit of a game changer for online buying in New Zealand,
which is has always been a little bit behind the
rest of the Western world in terms of uptake on
e commerce. But it kind of makes sense for Ikea,

(08:21):
especially once people have some familiarity with products. You know,
if you're if you're living down country and your your
friend is it shows you, shows you their food on
which they're really delighted with, and you go, well, I'll
have one of those, you know you if you just
order one, then you can pick it up from your
main freight delivery, so it's all to have it delivered
into the house. So I think it's going to allow

(08:42):
their distribution to be really powerful, and for other brands
that are in that in that especially about heavier furniture offering,
it's it's going to put some pressure on them.

Speaker 4 (09:00):
Your opening is also going to allow many New Ylanders
for once again experience the love of Swedish meatballs that
they remember from visiting Ikea stores overseas. I think all
of us who have lived overseas and I did so
for some time. Are very familiar where you put an
itinerary together for your key. We friends and family coming
to visit you, and they say that very lovely.

Speaker 3 (09:19):
But can we go to Ikea support and.

Speaker 4 (09:22):
Whether it's in Chicago or London, where I was for
some time, and say that looks great, but let's get
to the Ika quickly please.

Speaker 1 (09:30):
The only reason I can think of for Ikea that
that mate would perhaps not make it work so well
here is that because there's been an absence in the
market of Ikea for so long. The likes of Kmart
and the warehouse have their own flat pack furniture, obviously
not to the scale of as Ikea, but people have

(09:50):
gotten you know, cupboards and bookshelves and desks and things
like that already.

Speaker 2 (09:54):
Do you think that IKEA's products will hit.

Speaker 1 (09:57):
As hard as it would have without those competitives, or
do you think Kmart and the warehouse and the like
should just give up? Now?

Speaker 3 (10:05):
Oh? No, I mean I think it's not always. I mean,
first of all, I mean the people like to have choice,
and you're going to have loyal shoppers that cam loyal
shoppers at the warehouse. Ike is going to come in
and it won't be for everyone, and I think in
a way probably, I mean, it'll be interesting in those
retailers have been doing research on what might happen once

(10:27):
I here in market and how does it maybe reshape
their ranging? You know, they may go down a price
pointing strategy or you know, if there's resistance to flat pack,
do do they have less? You know, maybe not quite
so flat pack not more ready to go? And also

(10:48):
I mean fundamentally is for business they're in. I mean,
I think provided they can they can see an appropriate
ROI they'll you know that they'll stick at it, but
they probably need to. It may make them think about
the ranging and what you know, because they may find
they get really disrupted in some areas but maybe less
so in others.

Speaker 1 (11:09):
Can you show some examples of perhaps international brands that
we've gotten quite excited about and that have actually thrived
in New Zealand? Of course I'm thinking initially straight off
the back, Costco for example, that was huge when I came.
I went to Costco on the second weekend that it
was open, and I regret it. It was terrifying.

Speaker 3 (11:30):
Yeah. Well, actually I went to the opening day you
can tell I'm a bit of an opening day junkie.
And I went round and it was, Yes, it was
quite quite the thing. I mean, the cues, the crowds,
that raphic, the trap for traffic was I deliberately part
of the little way away and I walked in. I
decided I didn't want to get stuck in the car park.

(11:52):
I think part of the big thing was with the
sheer bars, the smiles on people's faces, the cues for
the for the one dollar hot dogs, and and I
think just the you know Costo like II here, it's
a scale thing. You know, it's big, and you know
very much. You know, a retail, a retail cathedral, and

(12:14):
so yeah, babe, I mean certainly in Costco is just
hasn't got quieter. You know, Like the queues, especially at
weekends are arch quite incredible, although they do pretty well
at pumping people through, but yeah, anytime you want to
go over, you're going to see it's going to be
pretty busy. And the queue for their hot roast chickens
and things as never seems to diminish. They just get

(12:35):
wiped out. So I mean, yeah, they've done well. I mean,
some others have found a little bit harder. I think,
you know, Sephora has found a little bit harder. Obviously.
You know, the top Shop brand came into New Zealand
although it wasn't it wasn't directly owned by top Shop itself,
so it was through a local partnership, so it didn't
have the same financial dynamics that it would be have

(12:59):
been the actual brand owner coming in in terms of margin.
So I think they found a bit tougher because they
opened up at a magnificent site on Queen Street and
it was a really lovely store, and foot traffic to
it looked pretty good. But I think just getting those
most margin aspects of your overhease too high, it's just
very hard in retail. And you know, we've had other
brands here, I mean, you know, Laura Ashley, Body Shotpp

(13:22):
and so on. It's still have kind of come and gone,
but they've they've also been having challenges. You know, some
retail brands go through challenges globally anyway, just as as
trends change. I mean, the retail chain it's it's not
quite on the same level as I here, but the
ones we are really killing it over here. Time in
his chemist Warehouse and you know they they've really tapped

(13:43):
into something that you know, we didn't really have that
large scale, low cost chemist pharmacy offering and all those
brands before. And you know they I mean I just
saw yesterday is a new one going up to down
the road and go wow. They I mean, they're they're
they're just going gamebusters.

Speaker 2 (14:04):
Yeah, They're popping up everywhere, aren't they.

Speaker 1 (14:06):
I mean, if you could waive a magic wand and
have an overseas retailer come here tomorrow, or really look
at New Zealand as.

Speaker 2 (14:14):
A really good option, what would it be?

Speaker 1 (14:17):
I know what my couple are, so I've been advocating
for Audi to come here for a long time. They've
just grown roots in Australia. And then another one that
I was thinking of the other day, would would we
would we like a Walmart or something here?

Speaker 3 (14:36):
Well, in a way, the warehouses are Walmart, so I
think I mean, who knows, maybe the Walmart could buy
the warehouse and then that would that that would be
interesting the an Audi, Yeah, I mean the the I mean,
obviously it's maybe strange. A whole other podcast conversation would be,

(14:57):
you know, the whole supermarket thing and yeah, you know,
and but but you know, oldie, you know, to come in,
it's it's just such a you know, one of your
other questions before is you know, we are a very
small market for which is why I hear of taking
their time to come here. They have been richer solutions before,
all richer market options to go into. So so it's

(15:19):
when people do come here, it's because they've worked out
or they think they've worked out how to make money.
I mean brands. For me selfishly, it's I'm quite passionate
about some overseas apparel brands. So there's one particular favorite
of mine is an Italian brand called Boggy and it's
it's a men's web brand, so you know, basically you

(15:39):
can buy it online. They they ship out of Australia,
but if you actually want to go to a store,
you usually have to be in Italy. The chances of
from companies in a rather slim. But then you know,
maybe moving back and be said for some other some
other things, in the old days, I would have said
I would have loved to have had a Virgin megastore
here because that was a place I spent an awful

(16:00):
lot of time in the n the eighties and nineties.
But as you know, music and entertainment shopping is chat.

Speaker 2 (16:08):
When we used to have records and CDs, records.

Speaker 3 (16:12):
And CDs and Virgin Megastore was like the ultimate place,
Bad and Tower Records of the ultimate places. But they
don't really insist the same way now, so it's not
quite the same call.

Speaker 1 (16:22):
What would convince someone like another one over in Adelaide's
just got a couple of TK Max's and a unique cloth.
And there's another Japanese brand that we were talking about before.

Speaker 2 (16:36):
I think it's Mooji.

Speaker 1 (16:37):
What would make you know one of those brands actually
look at New Zealand?

Speaker 2 (16:42):
What do we have to do.

Speaker 3 (16:45):
Well? It may partly be seeing some of these other
international operators succeeding. So I mean Costo, I don't know
whether IQ have been IQ have been coming for years,
and I don't know whether Costo actually getting in and
breaking ground and building is helped. If ikea similar confidence

(17:06):
to come into market, it probably I mean for them,
it's probably seen what is the economic situation, what what
is working or thriving in New Zealand And? And identifying market gaps?
You know, what isn't being said I think that's you know,
come back to Chemist Warehouse. Why they've done well is
there was nothing like it in market, and you know,
the the established retailers of day to day pharmacy goods

(17:30):
were we're doing in a in a much more traditional way.
So they've come in discounted, but also the arranging is
very very different, you know. I mean another brand that
would be really interesting over here is Primark, which is
you know, again fast fashion, super cheap. You know, it's
you can you can get kitched out for so little

(17:52):
and they and they their stores are massive over in
particular the UK and multi floor pretty much pick up
whatever you want. I would have thought the Prime RK
would kill over here. Actually it would if if they
come back to point why would they come here? They
would just had to establish that there was a market
gap that wasn't being served well by the existing insisting players.

Speaker 2 (18:16):
Thanks for joining us, Ben.

Speaker 3 (18:18):
You're welcome. It's pleasure.

Speaker 1 (18:22):
That's it for this episode of the Front Page. You
can read more about today's stories and extensive news coverage
at enzidherld.

Speaker 2 (18:30):
Dot co dot nz.

Speaker 1 (18:32):
The Front Page is produced by Jane Ye and Richard Martin,
who is also our editor I'm Chelsea Daniels. Subscribe to
the front page on iHeartRadio or wherever you get your podcasts,
and tune in on Monday for another look behind the headlines.