When you step into an IKEA store, you’re not just entering a furniture exhibition, but rather a wonderfully staged psychological marvel. From selling $50 billion worth of products annually to serving millions of Swedish meatballs: IKEA is not just a furniture giant, but a cultural phenomenon.
However, behind this charmingly decorated façade lies an astonishing history filled with unparalleled triumphs, innovation, and controversies. It all began with a child born into a humble farmer’s family.
Tragic first steps
At the end of the 19th century, the German aristocrat Achim Kamprad, defying the strict rules of society, married a woman from the lower class – Francisca. Rejected by his family due to this decision, Achim moved with his wife to a small Swedish village and bought 450 acres to start a new life.
But unexpectedly, fate subjected him to a cruel test. Financial difficulties and rejections from local banks plunged Achim into deep despair. He eventually took his own life. Pregnant Francisca was left alone, forced to fight for survival with her children.
Francisca, a resilient and determined woman, transformed the farm into a thriving business. Her hard work and dedication became the cornerstone of the Kamprad legacy.
Many years later, in 1926, her grandson, Ingvar Kamprad, was born. Ingvar, who grew up on this farm, began to demonstrate entrepreneurial abilities from childhood. He tried to make a profit by selling matchboxes, New Year’s greeting cards, and lingonberries (northern berries). His grandmother always encouraged and supported him. Young Ingvar reinvested every penny he earned, laying the foundation for a business that could become IKEA in the future.
The birth of IKEA
At just 17 years old, Ingvar Kamprad officially launched IKEA. Initially, he sold small household items through a mail order system. The name IKEA was formed by combining the initials of his name and surname (Ingvar Kamprad), his family farm (Elmtaryd), and the name of a nearby village (Agunnaryd).
Unable to open a store, Ingvar worked from a shed, earning income by sending catalogs to customers and delivering inexpensive everyday items. In 1948, a turning point occurred when IKEA entered the furniture market. This decision was inspired by the development of housing construction in Sweden after World War II.
IKEA distinguished itself by purchasing furniture from local manufacturers and giving products memorable names. Innovative approaches in design and distribution quickly gained attention and laid the foundation for the company’s rapid growth.
Swedish furniture wars
The 1950s marked a turning point for IKEA, but this growth didn’t come without challenges. As IKEA’s affordable and modern furniture gained popularity, it sent shockwaves through Sweden’s traditional furniture industry.
This situation was particularly unsettling for the major players dominating the market. They perceived IKEA’s low-price strategy as a direct threat to their supremacy, and consequently, the Swedish National Association of Furniture Retailers united to restrict IKEA’s operations and push it out of the market.
Swedish furniture fairs were at the heart of this battle. These events provided furniture manufacturers with a crucial platform to showcase their products. While most competitors simply displayed brochures and samples at fairs, Ingvar Kamprad took it a step further – he brought entire furniture sets and sold them at low prices right at the fair. This approach drew crowds and further solidified IKEA’s advantage over its competitors.
The competition intensified. Initially, selling at fairs was completely banned, and later, even displaying product prices was prohibited. In response to these obstacles, Ingvar organized independent furniture fairs in major Swedish cities. As a result, customers began flocking to IKEA en masse.
This “cat-and-mouse game” portrayed IKEA as the “victim,” and the public expressed sympathy, strengthening their trust in the brand. Ingvar’s perseverance frustrated his competitors. They compared Ingvar to a hydra – “if you cut off its head, two more grow in its place.”
Fatal ultimatum and turn to Poland
However, realizing they couldn’t completely push IKEA out of the market, furniture sellers dealt the most severe blow. They issued an ultimatum to suppliers:
“If you partner with IKEA, you will lose the right to work with us.”
This brought IKEA to the brink of crisis. Suppliers massively severed ties with IKEA out of fear, and Ingvar found himself in a difficult situation.
But he once again demonstrated his unparalleled ingenuity. IKEA made rapid strategic changes to survive:
• To support loyal suppliers, he offered them faster payments and more favorable terms, which fostered a deep sense of loyalty.
• The biggest turn was towards Poland. He established timber supply and production processes there.
This move removed IKEA from the control of competitors in Sweden and, at the same time, allowed for a sharp reduction in production costs. It was this stage that laid the foundation for the company’s global supply system.
Rebirth
The Swedish furniture wars were started to destroy IKEA, but instead, they transformed it into an even stronger and more innovative company. Ingvar later called this crisis a “hidden blessing.” Because it was precisely these challenges that forced IKEA to differentiate itself, find new paths, and continue to grow.
By the late 1950s, IKEA had become not just a simple furniture retailer, but a movement ready to transform the entire industry.
Sometimes innovations are born in the most unexpected circumstances. One of IKEA’s biggest breakthroughs came about due to a minor logistical problem.
One day, after a photoshoot, when one of the employees was preparing to return a table to the warehouse, he noticed that it took up a huge amount of space in its assembled state. He simply voiced his thought:
“Why don’t we remove the legs?”
This simple suggestion became an idea that radically changed IKEA’s entire business model: flat-pack furniture.
Flat Pack Furniture
Although the concept of flat-pack furniture seems very simple, it has radically changed the furniture industry. IKEA significantly reduced the product volume by disassembling furniture and packaging it into small pieces. This made storage and transportation processes more efficient.
“IKEA Effect”
However, flat-pack furniture was not just a means of saving costs. It also created an unexpected psychological effect – which scientists later called the “IKEA effect.”
Since customers assembled their furniture themselves, the process enhanced their sense of satisfaction and ownership. Studies have shown that people value things they create more than those made by others.
The process of assembling furniture became not a laborious task for people, but a source of personal achievement and pride. Thus, IKEA transformed the conventional sales process into a game-like experience, strengthening the connection between the customer and the brand.
Now people began to perceive IKEA not as a regular store, but as a brand that engages them in the process and gives them a sense of ownership.
By the 1960s, IKEA had already become a star in Sweden, but Ingvar Kamprad’s goals were even bigger. After the company’s first stores were successful, Ingvar realized that IKEA wasn’t just selling furniture, but was creating an entire experience.
Thus, he began designing IKEA stores in a way that would not only maximize sales but also encourage customers to return again and again. This approach marked the beginning of IKEA’s transformation into a global retail giant.
At the heart of IKEA’s strategy was its unique store structure. It was a purposefully designed customer journey, resembling a labyrinth that guided buyers to move in one direction.
Ingvar realized that the more time spent in the store, the more likely customers were to make unplanned purchases.
– First step: as soon as customers enter the store, they are directed to walk along a circular path.
– Each turn: reveals new rooms and furniture solutions, which inspires the buyer.
– Hidden trap: customers are tempted to make unplanned purchases, as every corner evokes new ideas and a desire to buy.
The huge area of the stores and the single entrance-exit design were also deliberately planned to encourage customers to stay in the store longer.
IKEA deliberately positioned its lighting, visual appeal, and store design in such a way that customers were compelled to walk slower, examine more products, and, as a result, make more purchases. Research shows that the majority of purchases at IKEA are unplanned – which confirms the effectiveness of this strategy.
Ingvar Kamprad, observing customer behavior, noticed a sharp decrease in the flow of people in stores after lunchtime. To address this issue, he decided to open restaurants inside the stores.
This approach completely blurred the boundaries between retail and the hospitality industry. IKEA is no longer just a store, but has become a place where customers come to spend time.
Ingvar’s Legacy
Ingvar Kamprad died in 2018, leaving behind a vast empire spanning more than 450 stores and over 50 countries.
Despite his personal wealth, Ingvar led a modest life – he drove an old Volvo and consistently flew economy class. His idea for IKEA to “create a better everyday life for the many people” continues to inspire the company’s global operations today.
Today, IKEA is not just a furniture brand:
– A cultural phenomenon;
– A school of innovation;
– A vivid example of the power of resilience and endurance.
Prepared by Zukhrakhon Mansurova
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