How Ikea Became Successful?
It’s not surprising to see how commonly present IKEA furniture is in most, if not all households. This Swedish-origin Dutch-headquartered multinational conglomerate has been one of the world’s largest furniture retailer since 2008, taking pride with it’s “cheap and chic” designs and the “Do It Yourself” aspect of their furniture as the founder devised a concept for a store full of functional furniture that’s easily accessible and to build.
However, not all multinational conglomerates become successful instantaneously. the story of how the founder built IKEA into one of the world’s best known brands is a rags to riches story for the ages.
The Humble Beginnings of Ingvar Kamprad
Ingvar Kamprad was born on a farm in rural Sweden in 1926 and started his first ever business when he was only five years old. Young Ingvar would buy huge bulks of matchbooks, selling them individually. By the age of ten, he was already selling pencils, seeds for flowers, Christmas tree ornaments and pens. He also worked and studied hard despite his dyslexia with his father inspiring him by paying in cash for doing well in school, using that money to jumpstart IKEA in 1943, only being 17 years old at the time.
Five years before selling actual furniture, the first IKEA sold small household products such as wallets, pens and picture frames. The name IKEA that Ingvar had come up with was actually an acronym consisting his initials Ingvar Kamprad followed by Elmtaryd as the E and lastly, the family farm he grew up on and Agunnaryd which is his home village. In 1945, he used milk trucks to deliver his products while in 1947, he started to sell furniture made by local manufacturers. Kamprad made the mail order catalog an integral part of IKEA’s business identity from the start as his area of Sweden was quite remote and rural however, reaching patrons in larger cities had been proven difficult especially in the 1940s and 50s.
The First Catalogue Of IKEA
The IKEA's first success was Ingvar's launch of the first iconic IKEA catalog in 1951, people were quite doubtful about the condition of the furniture due to the fact that the bewilderingly low prices. With this in mind, Kamprad rented an old workshop into a display area to showcase his furnishings. A few years later, Kamprad solved the problem of the expenditure of shipping larger amenities when he took the legs of a coffee table so it could be packed flat. From that point on, many products as possible use this method of compression to save both customers and IKEA their money to pack items.
Despite this success, Kamprad's manufacturers began boycotting IKEA due to his low prices by 1955 which Kamprad solved by bringing production and design in-house. His concept was complete selling his own designed, showcased, and flat-packed furniture all in-house. Kamprad believed that everyone should be able to afford stylish, modern furniture which was the driving idea behind IKEA.
IKEA’s Worldwide Conquest
The IKEA brand was an instant success, particularly for kitchenware and children's furniture, and soon more IKEA stores outside were launched with the first few being opened in Norway in 1963 and Denmark in 1969. In such a short amount of time, there were already ten IKEA depots in five European countries giving an astounding total of 1,500 people working jobs.
With its first store outside of Scandinavia opened, it was only a matter of time before IKEA’s expansion became a worldwide spread. Over the next decade, IKEAs were popping up worldwide in countries like Japan, Australia and Canada with Germany being IKEA’s biggest market with 53 stores, followed by the US with 51. Today there are 433 IKEA stores in 38 countries.
IKEA’s Unique Experience
The global success of IKEA can be directly associated to the fact that it has implemented a low-cost structure in its operations. Through this strategy, IKEA maintains a sustainable business because it seeks to uphold its principle of ‘low cost’ products.
Another factor to consider IKEA’s success is the do-it-yourself approach which has generated a different and unique experience to furniture-shopping. It has also created a safe environment where young, cost-conscious customers won’t be bothered by salespersons who work on commission and have the choice to choose among different options.
IKEA: Art? Furniture? Or Both?
One aspect of IKEA's attractiveness is how the stores feel like you're in an art gallery showcase instead of a normal home department store. With the rise of popularity in E-shopping, patrons need more incentives to come to stores physically.
IKEA tries to combat this through its elaborate showrooms and cafeterias making quite a novel experience destination for patrons. IKEA's showrooms may also help clients to draw inspiration to how to design their interiors such as bedrooms or living rooms.
And with that, Ingvar Kamprad's innovative mind and strive for success may inspire future entrepreneurs especially with Ingvar's rags to riches story. His ability to be versatile and accommodate his target demographic shows how important it is to have this essential skill in the globalized world.