What causes Ikea’s success? Is it the experience? The low prices or the flatpack system that allows anyone to easily buy the furniture and assemble it?
I’m not going to lie. I’m an Ikea fan. Both as a consumer and a designer, I follow Ikea’s success. I want to understand what it is that makes it such a powerful brand.
So in today’s post, we’re going to analyze Ikea’s brand to discern what makes it such an impactful brand.
We will start with some core information, examine the key factors that contribute to establishing Ikea’s success, and lastly, the cost of being in the retail industry.
How it all started
Ikea, founded in Sweden in 1943, it’s an acronym that stands for Ingvar Kamprad – the founder – and Elmtaryd Aggunaryd, the farm, and village where he grew up.
It was only in 1948 that the company started to sell furniture.
In 1950, the first Ikea catalog was born. In 1953 the company embraces flat packs, and seven years later, the first Ikea restaurant is open to the public.
By the beginning of the next decade, the company was already ahead of its competitors. However, it was only in the 70s that Ikea expanded outside Scandinavia and opened stores in Switzerland and Germany.
The rest, as it goes, is history. Ikea is now present in 38 countries with over 430 stores.
Key factors that make it a success worldwide
In my opinion, there are several reasons why Ikea managed to evolve from one small Swedish company into a multi-billion worldwide company.
Nevertheless, let’s focus our attention on the strongest factors.
Emphasis on Ikea’s culture
One of the main reasons for success is that it became almost like a movement, rather than a mere provider. It starts from inside the company, and it reflects on the customer’s experience.
Other than naming products in Swedish and cultivating Swiss traditions, Ikea is quite effective at implementing shared beliefs internally.
Even before being hired, employees are infused with the company’s culture to evaluate how well they might fit.
And the truth is, it works. They get excited to be working for the company which increases their productivity and work progression, and that translates into customers’ satisfaction and profitability.
Additionally, another reason why there’s a sense of equal opportunity inside Ikea is that everyone has to start on the ground floor before moving up. As such, the hierarchy is horizontal, making the company appear to be equally inclusive to all employees.
Design accessible and personalized to all
One of the biggest appeals to this brand is the instant shopping gratification. It provides costumers the feeling of owning something beautiful that doesn’t cost a lot. It also leads them to spend more than they intended.
Rather than telling how to use the products, Ikea provides familiarity while, at the same time, encouraging uniqueness. This generated a sort of DIY trend and an endless visibility.
Think about it, how many Ikea hacks and customization projects have you seen all over the internet?
Constant reinforcement of brand awareness
To spread Ikea’s awareness, the company created two of the most simple – yet effective – assets a consumer might need: a product’s catalog and a bag to carry all of them home.
These two items are probably the major assets of the brand. In fact, that shopping bag remains one of the most sold Ikea products to date, and the catalog – along with the Bible and the Coran – is one of the largest printed publications in the world.
So, even though you may have bought the bag once, you will probably end up using it more often, displaying one of the company’s most recognizable symbols. So you’re becoming a brand ambassador, ether you realize it or not. By carrying the bag, you’re claiming you’re a customer, and you implicitly remind others that they should be as well.
Constant improvement of customer experiences
There’s a certain pretentious that occurs once companies get a certain level of experience and profit. They start assuming that they know everything about their industry and buyers. That’s also when they lose ground. Ikea, apparently, doesn’t want to make that mistake.
They were one of the first retail companies that realized that customers need a break from shopping to regain some energy. And by providing such a break, they manage to increase satisfaction and subconsciously sell even more products.
Glassware, dishware, beverages, and even the paper tray advertises additional products that we didn’t notice until we went for a bite.
Other than the restaurant, the cafeteria, and the most recent As-Is aisle, Ikea is currently studying new possibilities for stores’ experience.
Rather than the blue box buildings, showrooms, Pop-Up stores, and small planning stores might become a new way for costumers to connect with the brand.
Market research and adaptation
In the beginning, the concept of self-service and self-assembly was very strange to European markets outside Sweden.
But it was not only an adaptation to consumers but also vice-versa.
Before entering a new market, Ikea studies it for many years, by conducting home visitings and studying local culture and customs.
With that information, it develops personas and designs solutions that correspond to real market challenges.
By being constant yet adaptable, Ikea conquers new ground and pleases everyone.
High-value partnerships with manufacturers, brands, and communication agencies
Being a retailer company whose value is to provide furniture at an affordable price point, also has its disadvantages. There’s a battle between keeping a lower production cost and innovating.
Ikea has managed to achieve both by working with artists that attract new segments of consumers, and by finding manufacturers and local partners.
For instance, Billy’s bookcase is produced by a manufacturer outside of Ikea, reducing costs, and Ikea’s advertising agency differs from country to country, to be more relatable.
Lastly, one of the reasons that make Ikea’s success is the impression that, as a brand, it partakes in the same concerns as to its costumers.
By introducing second-hand furniture and a vegetarian meatball, the company is reinforcing the idea that it shares its costumers’ views on the world.
The cost of Ikea’s success
With Ikea’s success comes a dose of great responsibility and some negative outtakes as well. The environment and society’s behaviour are the most affected.
Impact on the environment
Ikea is responsible for taking 1% of the total wood supply in the world, roughly 17 million trees each year.
The company has recognized it and has announced the commitment to use 100% renewable and/or recycled materials by 2030.
As of this moment, in 2020, they have already launched a collection using waste plastic recovered from the Mediterranean and presented some sustainable alternative materials. Let’s hope they will continue to move forward and deliver what they promise.
Impact on society
Besides being considered the fast-fashion of home furniture, Ikea is the 10th large retailer food company in the world.
Their famous Swiss dishes conquered worldwide fans due to their price, a success usually reserved for fast food companies.
In 2013, there was a scandal in Europe regarding a batch of meatballs that contained horse meat.
Local managers acted quickly, but consumers weren’t happy. Everyone assumed that they knew what they were eating and that, despite the price, the quality was high.
Additionally, since 2010, eight children’s died by asphyxiating with products from MALM’s collection. This sparked the conversation about whether buying furniture from retailers such as Ikea is safe or if the lowest price means cheap and poor quality materials.
The company had to pull several products from the market, publicly admit that the MALM dresser could be dangerous, and, of course, compensate the families for their losses.
Nowadays, they print an additional step – on the furniture – that requires dressers, consoles, stands, and cabinets to be secured to the hall.
This is another example of how companies, Ikea in particular, needs to be conscious and own up to their mistakes. Consumers will hold them accountable, regardless of how big and that perception can undermine the brand’s reputation.