PUT THE ‘FUN’ IN FURNITURE - JOURNEY OF IKEA

Story of the DIY Billionaire who redefined the world of furniture!

I am pretty sure that we all know IKEA for many reasons like its megastores, affordable furniture and now its food section too! But little do we know about how it all started. Let’s have a look

Back in 1926, a boy named Ingvar was born in a small village of south Sweden with turbulent financial family background. From a very young age, he looked at things from a different perspective, and like a true businessperson, he converted every threat into an opportunity. He believed that customers get attracted by cheap prices, hence bought items in bulk and sold them directly to customers at cheap rates and made a profit. Back in the days when there was a paucity of light, he started selling matchboxes. During his days in boarding school, he sold stationery items that were most handy for students. Despite being dyslexic Ingvar came out as a prolific student and stood first in his class. As a token of appreciation, his father gifted him some money which allowed him to redefine the furniture industry forever, by opening IKEA

We bet you can’t guess its full form!

A typical IKEA store is approximately 3,00,000 square feet equivalent to 5 football fields!

IKEA stands for Ingvar Kamprad Elmtaryd Agunnaryd, his name and that of his village. He even chose blue and yellow in IKEA’s logo, the color of Sweden’s flag to show his love for his country. Undoubtedly Ingvar never forgot his roots!

IKEA started with selling items like pens, wallets, jewelry, etc., and later converted into a mail-order sales business. But soon Ingvar realized that these items weren’t enough to sustain, and added furniture. So the story goes like this, during the 1950s Ingvar noticed that the catalog manager was having a tough time loading a heavy, long-legged table into his car, and the manager out of frustration knocked off the legs of the table- that is when Ingvar came up with a brilliant concept of the self-assembling of products, which makes shipping and packaging easier, and helps in reducing the cost of logistics and making profits! This enhanced IKEA’s design team, as well as they, came up with innovative yet aesthetic design, which became the very philosophy and USP of the company.

“Our idea is to serve everybody, including people with little money.”-Ingvar Kamprad founder of IKEA

Ingvar’s ideology was quite straightforward. He felt that everyone does not have a surplus bank balance but that should not stop them from having good quality furniture even if it’s a small-sized house. 

Let’s have a look at how Ikea managed to reach where it is today-

IKEA’S BUSINESS MODEL AND USP –

1. IKEA IS AN NGO: This minimizes tax and disclosure and handsomely rewards the founding Kamprad family and makes IKEA immune to a takeover
2. DO-IT-YOURSELF: The most unique feature which benefits both the company and its customers. Undoubtedly, they take cost savings to the next level!
3. ECONOMIES OF SCALE DUE TO BULK PRODUCTION: The best way to maximize profit is to minimize the cost of production and IKEA does that brilliantly
4. “FLAT-PACK” PACKAGING: Carrying furniture could not have been made more convenient. This simply eliminates the cost of shipping
5. STORE EXPERIENCE: IKEA stores are like a maze and so carefully designed that customers will end up buying more than they wanted to, also they make sure that the store experience is surreal!
6. ENTRY INTO FOOD INDUSTRY: Simply the best way of customer retention and it has been noticed that 30% of its customers come just to eat.

Today IKEA has 445 stores worldwide with 2,20,00 employees. The store approximately offers 9,500 varieties of products and the company’s valuation in 2020 is 11.7 billion euros.

Written By

-Aditi Agarwal