IKEA has been a story of inspiration and vision since its launch back in 1943. A huge Empire and grandeur – All of it all began with one simple idea. Make furniture the best quality it can be, at the cheapest price and convenient to transport. Ingvar Kamprad, the founder of IKEA, always wanted people around the world to be able to buy beautiful furniture and home furnishings, at an affordable cost, and this desire became his mission. A born innovator, he brought IKEA through the decades — always with one eye on the future and turning it into the world’s largest furniture retailer.
Upon launching IKEA as a business, Kamprad immediately began experimenting with furniture design, assembly, advertising, and store layouts. And he never stopped. Many traditional retailers have been closing their doors, either as a result of lagging behind as digital took over or from disruption by a young and nimble start-up. IKEA, on the other hand, has remained a constant force in the world of retail.
The IKEA effect; name IKEA is derived from Kamprad’s initials (IK) plus the first letters of Elmtaryd and Agunnaryd, the farm and village where he grew up.
Early Days and Idea of restaurant
At the beginning of its operation, the young Kamprad engaged in the trade of different things. However, the biggest demand was for a pen. At the beginning of the 1940s, they were a novelty even in Sweden. Kamprad ordered 500 pens from Paris. To attract prospective customers to the presentation of the store, the young entrepreneur promised a free cup of coffee and a bun to everyone who would come. Imagine his surprise when this modest event attracted more than a thousand people! The first presentation of the day was about to become the last one. Nevertheless, everyone got a cup of coffee and a bun.
The idea of opening a fast food restaurant in each store looked great for the owner of IKEA. The time was passing by, and each IKEA store got a fast food restaurant.
The idea … Furniture is Not a Luxury, But Necessity
Kamprad realized that furniture was luxury for most people due to the high cost. In 1948, he came up with a fresh idea, and he decided to get himself into the trade of furniture. Interestingly, it turned out to be the primary source of profit for IKEA.
After finding places where he could buy the cheapest furniture, Ingvar agreed with fine upholstery manufacturers. He assembled the components and sold the furniture at nominal rates against the competitors who sold the same items at a sky-high rate.
In the early 50’s he bought an old small factory in Sweden, which let him put on a production flow even cheaper furniture for his stores. On similar lines, IKEA laid the future strategy of the company and purchased furniture components in those countries where they are cheaper.
The first IKEA furniture showroom was opened in 1953 in Älmhult, Sweden. The USP of IKEA’s showroom was that visitors could see and touch IKEA home furnishings before purchasing them. Five years later a new 6,700 square meter store was opened which was like what we see today under huge IKEA signboard. Initially, the traditional company’s colors were red and white. Later, the IKEA network got painted in yellow and blue, the national colors of Sweden.
There are two key attributes to IKEA’s success.
Continuous INNOVATION while never losing sight of the GOAL. Since day one.
An obvious conclusion for brand success in today’s markets — but much harder to put into practice as a business is scaled to become No.1 worldwide in its industry.
Ingvar Kamprad – Founder, IKEA
IKEA’s goal:
‘To create a better everyday life for the many people’
Always wanting to keep IKEA accessible for the many, Kamprad believed furniture really didn’t have to cost the earth:
“To design a desk which may cost $1,000 is easy for a furniture designer, but to design a functional and good desk which shall cost $50 can only be done by the very best. Expensive solutions to all kinds of problems are often signs of mediocrity.” — Ingvar Kamprad
The Number Game
As of November 2018, there are 424 IKEA stores operating in 52 countries.
In the fiscal year 2018, IKEA sold products worth $44.6 billion
The IKEA website contains about 12,000 products and is the closest representation of the entire IKEA range.
There were over 2.1 billion visitors to IKEA’s websites in the year from September 2015 to August 2016.
