Ikea’s forward-thinking strategy made it the top furniture seller in the world. It also changed retail forever, analyst Warren Shoulberg writes on industry website The Robin Report. “There is perhaps no other retailer on the planet that has moved its basic model into so many places with so much success,” Shoulberg writes.
The furniture store has an impressive 298 stores in 26 countries, selling $36 billion a year.
Here are a few crucial aspects to Ikea’s success.
1. Solving the worst part of buying furniture.
Before Ikea existed, people saw furniture as an investment for the next 20 years. This resulted in a lot of anxiety and indecision, according to Shoulberg.
“They created products that were nicely designed, if not particularly durable, that were intended to be used immediately… and disposed of when they wore out or, more likely, when the user had moved on to a different taste level or purchasing strata,” he writes. “It’s a seminal change in the home business and one that conventional furniture stores are still trying to come to grips with.”
2. Hitting the right demographic.
Ikea resonates with young people, according to Shoulberg. The products are clean, with a simple aesthetic and “whimsical” names. Ikea is also known for paying workers a living wage and being transparent about the production process.
“They have Gen Y written all over them,” he says.
3. Not expensive, but not too cheap.
Ikea’s price point is perfect, according to Shoulberg. While prices are cheaper at deep discounters like Aldi, shoppers feel they are getting a good value at Ikea. Still, Ikea is much cheaper than competitors like West Elm and Bed, Bath & Beyond.
4. Stores are a destination.
As e-commerce becomes more popular, shoppers need incentive to come into stores. With its elaborate showroom and cafeteria, Ikea has become a unique destination for shoppers. While many retailers enter shopping centers hoping for traffic, Ikea is a standalone store that shoppers seek out with a specific goal in mind.
Whether your yearly visit brings you to the brink of self-smothering in a giant bin of throw pillows, or you’re a superfan with an unquenchable taste for their STILL INLAGD (marinated herring with onions and carrots), it’s hard to escape IKEA’s global influence. From the insane scale of their wood consumption to the fact that its name is actually just an acronym meaningful only to its eccentric founder, we rounded up 12 things you probably didn’t know about IKEA.
1. Its mega-rich founder is a penny pincher.
Founder Ingvar Kamprad is one of the richest people on earth (his net worth was estimated at $42.6 billion in 2012). However, he maintains a very simple lifestyle: he lives in a modest home in Sweden, insists on flying economy while trekking the world to visit new stores, stays in inexpensive hotels, and has even been known to replace bottles from their minibars with cheaper, locally purchased ones.
2. Products are named rather than numbered because Mr. Kamprad is dyslexic.
It was simply a matter of necessity to keep things easier. And their crazy names follow an elaborate system: beds take Norwegian place names, sofas are named after Swedish towns, kitchen tables are Finnish geographic points of interest, chairs are male first names, glasses and cups are given adjectives, etc. How do you like dem applen?
3. IKEA isn’t a word, but an acronym dreamed up by the founder.
The letters Ingvar Kamprad (his name), Elmtaryd (the farm he grew up on), and Agunnaryd (his Swedish hometown).
4. They’re the 3rd largest consumer of wood on the planet.
Just behind Home Depot and Lowe’s, IKEA uses a staggering 1% of the world’s wood per year.
5. Surprisingly, China isn’t home to their largest store.
The largest — a 600,000 square foot behemoth — is actually in Sweden. China can claim the next four biggest, though.
6. They’re more popular than Jesus.
Each year more copies of the catalog are printed than of the Bible. It’s been in existence since 1951 and takes up nearly 70% of the marketing budget.
7. They embraced LGBT equality early on.
In 1994 they aired the first-ever major national TV ad to feature a gay couple, putting it in good company with other groundbreaking cultish institutions.
8. They have a dark past.
In 2012, the company admitted and apologized to knowingly benefitting from forced labor in the seventies and eighties. While they currently keep much closer watch on their partners’ facilities, during that period some of its suppliers were using East German political prisoners to fashion their flatpack furniture kits. Low prices: not always worth it, people.
9. They sell entire houses.
While they’ve been known for the whole flatpack furniture thing for a loooong time (the first item — a leaf-shaped table called the LOVET — debuted in 1956), they’re now selling entire prefab homes. They’re sort of boxy and only currently available in parts of Europe, but hey, no Allen wrench-assembly required!
10. Their beds are serious babymakers.
In a testament to their popularity, an estimated one out of every ten Europeans are conceived in an IKEA bed. It’s one in five if you’re British, as stats show each household there owns nearly two of their mattresses.
11. Their food sales are massive.
With annual sales of approximately $2 billion, their food side of the biz is roughly the size of Panera or Arby’s. In 2012 they sold 150 million of their signature meatballs — that’s roughly 4,200 metric tons of meat, people.
12. They’re well on their way to global domination.
They boast stores in 41 countries, employ 120,000 people, and are visited annually by 522 million people. That’s a visit for 1 in 14 people on the planet. Wild.