IKEA Sales Tree Simulator

INSTRUCTIONS ON HOW TO WORK WITH THE IKEA SALES TREE SIMULATOR
BY INTER IKEA SYSTEMS B.V. 2008
HOW TO WORK WITH

THE IKEA SALES TREE
SIMULATOR
Contents
Introduction to the IKEA sales tree simulator ........................................... 2
Step 1: Adjust your settings in Microsoft Excel......................................... 6
Step 2: Start your IKEA sales tree simulator............................................ 7
Step 3: IKEA sales tree In the store .................................................... 10
Step 4: IKEA sales tree In the market (PMA)........................................ 12
Step 5: Comparing current and future year ........................................... 14
Step 6: Special features ...................................................................... 15
Step 7: Saving your simulation ............................................................ 15
Inter IKEA Systems B.V. 2008
IKEA SALES TREE SIMULATOR
Introduction to the IKEA sales tree simulator

Welcome to the IKEA sales tree simulator!
The IKEA sales tree simulator is developed by Inter IKEA Systems B.V.,
supported with input and tests carried out by many IKEA colleagues from all
over the world.
If you have any questions, remarks or additions, please contact
IKEA.sales.tree@Inter-IKEA.com.
The IKEA sales tree simulator is a simplified calculation model that shows how
different factors influence sales. It gives you an overview that helps you
identifying the best opportunities for increasing sales.
The IKEA sales tree simulator enables you to simulate the development of your
IKEA sales tree for a future year by entering your planned or estimated figures,
as well as it allows you to compare your future versus your current IKEA sales
tree.
On the following pages you will find a short introduction to the IKEA sales tree
simulator and a step-by-step guide about how to work with it.
The IKEA sales tree In the store:
The IKEA sales tree In the market (PMA):
The IKEA sales tree creates a thread running between the stores total sales
and the many people living in its Primary Market Area (PMA).
The In the store part shows you how efficiently the store converts visitors into
customers and how much each customer spends during each visit.
The In the market (PMA) part shows you how efficiently the store attracts
people in the PMA to visit and how often they come.
One of the strengths of the IKEA sales tree is that there is a clear separation
between information collected inside the IKEA store and information collected
outside the IKEA store. This distinction helps make it clear whether your
challenges need an inside focus, an outside focus, or a combination of both.
The IKEA sales tree In the store:

Remember that you can increase the total sales either by:
Increasing the number of transactions.
And/or by:
Increasing the average value of each transaction (the average check).
Components for increasing the number of transactions are:
To increase the total visits.
To increase the conversion rate.
To increase the total visits you can increase the number of people who visit
your IKEA store and/or increase their visiting frequency.
To increase the number of individuals who visit your IKEA store you can
increase the number of new visitors (= increase penetration).
The components for increasing the average check (average value of each
transaction) are:
To convince each customer to buy more products (increasing the average

number of items per check).
And/or:
To sell more higher-priced products (convincing more customers to buy

products higher up the price and quality ladder).
Keep in mind: Each possibility is more powerful if the other components are
maintained (or increased). In other words, increasing the number of
transactions while your average check is falling could actually result in lower or
unchanged sales. Attracting more visitors might not produce higher sales if the
conversion rate declines. And so on.
The IKEA sales tree In the market (PMA):

The IKEA sales tree In the market (PMA) shows you how the number of
visitors, the size of the population in your PMA and the penetration rate in
your PMA are linked together.
Based on your estimates of the demographic development, on your estimates
of the percentage of visitors coming from within the PMA and on your inputs
from the In the store part, you will be able to calculate your future IKEA share
of individuals in the PMA.
Step 1: Adjust your settings in Microsoft Excel

The IKEA sales tree simulator is made for the usual IKEA IT settings: Windows
XP and MS Office 2002 or MS Office 2003.
In order to ensure that you have the correct settings and will be able to use all
the features that the IKEA sales tree simulator provides please do the
following:
Open Microsoft Excel. Click Tools, Macro, Security
You then get the following window up on your screen. Click security level
Medium and then OK.
Step 2: Start your IKEA sales tree simulator

When you open the IKEA sales tree simulator you will get a security warning.
Please choose Enable Marcos.
Then an input window pops up where you are asked to enter:
the name of your store or country;
the year of your current IKEA sales tree;
your name.
The text you enter here will be added to the header and footer of your
document automatically. Additionally, the name of the worksheet will contain
the name of store or country.
The field name of store or country will not allow more than 20 characters to
be entered. Some characters like the * or the / may not be used you will
get a notice in such cases.
Two worksheets, one additional toolbar.

Your document contains two worksheets: one is for the IKEA sales tree In the
store and the other for the IKEA sales tree In the market (PMA).
On each worksheet you have both the current and the future IKEA sales tree.
Below the IKEA sales trees you have a table and a graph so you can compare
the current and future results.
To work with the IKEA sales tree simulator, at the top of the document there is
an additional toolbar:
<Change header> the first button on this toolbar allows you to change
the header and footer of your IKEA sales tree simulator and the names of the
worksheets.
The other buttons of this additional toolbar will be explained in the following
chapters of the instructions.
Entering numbers into the IKEA sales tree simulator.

Please be aware that the language settings on your computer influence
whether your decimal separator is a , (comma) or a . (dot).
So, please use the appropriate character when you enter your data.
In order to ensure a correct interpretation in each language setting:
Use the decimal separator from the alphanumeric part of the keyboard
(see picture below).
Do not type a separator for the thousands since your IKEA sales tree
simulator automatically contains a separator that is in line with your
language settings.
Use the , or the . (depending on the language settings on your computer)

as decimal separator from this part of your keyboard.
Step 3: IKEA sales tree In the store

You start by entering the data of your current years IKEA sales tree In the
store. Click on the button <Data/store current> to open an input window
that allows you to enter this data.
The data you enter into the input fields will automatically be placed into your
current years IKEA sales tree In the store.
Please note that you only have to insert data into left part of the window (into
the input fields). The data on the right side is calculated by the system
(calculated fields).
One time, you can choose what to enter: You can either enter the average
number of items per check or the average price of items per check. If you
check one of the two respective fields, it will be enabled and the other one will
be calculated automatically.
10
To continue, click on the button <Data store/future> to open an input

window where you enter the data for your future years IKEA sales tree In the
store:
You will notice that there is already data in the input fields. This data is taken
from your current years IKEA sales tree and is the starting point for your
simulation.
The data you enter here will automatically be placed into your future years
IKEA sales tree In the store.
Once again you can choose to enter either the average number of items per
check or the average price of items per check. If you check one of the two
respective fields, it will be enabled and the other one will be calculated
automatically.
11
Step 4: IKEA sales tree In the market (PMA)

By clicking on the button <Data/market current> you open an input window
that allows you to enter the data for your current years IKEA sales tree In the
market (PMA):
In order to calculate the penetration rate (IKEA share of individuals in the

PMA) more precisely you are asked to enter the figure for those visitors coming
from outside your PMA. If for example 15% of all your visitors come from
outside your PMA you enter 15 into this field; the remaining 85% of your
visitors are then the base for calculating your penetration rate in the PMA.
The data you enter into the input fields will automatically update your current
years IKEA sales tree In the market (PMA).
12
Then you click on the button <Data market/future> to open an input

window where you enter the data for your future years IKEA sales tree In the
market (PMA):
You will notice that there is already data in the input fields. This is the data
from your current years IKEA sales tree and is the starting point for your
simulation.
13
Step 5: Comparing current and future year

On each worksheet you always see the current and future years IKEA sales
trees on one page.
On the same worksheet there are a table and a graph below the IKEA sales
trees; here the values of the two different years are compared and the index is
shown.
Comparison IKEA sales tree in the store
In the store
2009
2011
28,469,000
33,045,466
116.08
Number of transactions
337,714
379,833
112.47
Total visits
818,751
904,364
110.46
41.2%
42.0%
101.82
292,411
301,455
103.09
2.80
3.00
107.14
96.0%
97.0%
101.04
First time visitors
4.0%
3.0%
75.00
Average check
84.30
87.00
103.20
7.50
7.60
101.33
11.24
11.45
101.87
Total sales
Conversion rate
Individuals who visited the
IKEA store
Visiting frequency
Existing visitors
Average number of items per

check
Average price of item per check
Index
Comparison IKEA sales tree in the store - Index

0
20
40
60
80
100
120
140
Total sales
Number of transactions
Total visits
Conversion rate
Individuals who visited the IKEA store
Visiting frequency
Existing visitors
First time visitors
Average check
Average number of items per check
Average price of item per check
14
Step 6: Special features

By clicking on the button <Add_tree> you create a new pair of worksheets:
one worksheet for In the store and one for In the market (PMA).
This allows you to create additional simulations for your future IKEA sales tree.
However, the data of the current years IKEA sales trees always is the same in
each of the additional worksheets.
With the button <Del_tree> you will delete the pair of worksheets that you
are actually working with. You will not be able to undo this action!
The file does not allow deleting the first pair of sheets.
The button <Export_GIFcurrent> directly creates a GIF of the current years
IKEA sales tree of the worksheet which is open (store or market). It will be
saved in the folder on your PC where the IKEA sales tree simulator Excel file is
placed.
A GIF is an image format that can be used within most programmes such as
MS Word, PowerPoint etc.; e.g., you can use the GIF for your marketing plan
or in a PowerPoint presentation.
Similarly, the button <Export_GIFfuture> creates a GIF of the future years
IKEA sales tree of the worksheet which is open (store or market). Also this file
will be placed in the folder where the IKEA sales tree simulator Excel file is
placed.
Step 7: Saving your simulation

Once you have completed the simulation of your IKEA sales tree you simply
save it on your PC by clicking on <File> and then <Save as>.
Whenever you want to continue working with your IKEA sales tree simulator
you open this file again.
15

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INSTRUCTIONS ON HOW TO WORK WITH THE IKEA SALES TREE SIMULATOR

BY INTER IKEA SYSTEMS B.V. 2008

HOW TO WORK WITH

Inter IKEA Systems B.V. 2008