The brand that is IKEA
Yesterday it was announced that IKEA founder Ingvar Kamprad had passed away, aged 91.
He was an exceptional entrepreneur, who in the 1930’s started by selling matches to neighbours aged just five. He went on to establish IKEA that now has over 400 stores worldwide, and was an active board member in the business up to 2013.
The IKEA effect was truly revolutionary on a number of fronts, and much has been written about the pioneering of self-service flat pack furniture. This offers savings in terms of production, shipping, storage and delivery. Customers take advantage of the lower costs in return for selecting their own items from the warehouse and assembling them at home.
This is the efficient and functional aspect of the IKEA experience. However what has made it easy for people to accept “hunting” about in the warehouse isn’t just price. Instead IKEA as a brand has successfully engaged with people on a number of levels. These include:
As part of the brand, IKEA expertly celebrate their Swedish roots and this is a key part of the shopping experience. It gives the brand a valuable point of interest that manifests itself in many ways including the use of blue and yellow, the product names, the food offer. This allows the brand to stay close to its Scandinavian mindset, and gives customers across the world the opportunity to shop Swedish style.
It becomes an experience, and the retailer puts this to good use in visual imagery, in particular the way in which it shows families living their IKEA life.
This is reinforced in store where the highly detailed room sets invite you to imagine yourself living there. This is a very powerful way to promote your product offer as it gives customers ideas and even aspirations for their own homes. Of course it also elegantly encourages additional spend.
In a business that sells everything from teaspoons to complete kitchens, and everything in between, IKEA manages to provide ranges that appeal to a wide range of tastes. It makes good use of new products to keep interest in the brand, and at the same time IKEA regulars will be familiar with their core ranges.
When they arrived in the UK it was a breath of fresh air in terms of wide-scale affordable products that were modern, many with interesting design features and refreshingly different.
It’s encouraging that IKEA is currently working with highly respected design led brands such as HAY to create new products.
In marketing terms it also provides a flow of new products for; display in-store, in catalogue and advertising. This helps to refresh interest in the brand and even creates talking points. A good example was the round bed that made an appearance a few years ago. I’ll let you decide whether this was good design, but irrespective it provided a normally flat part of any store - the bed department, with a point of interest. This will have worked to focus customer attention on the rest of the bed offer, and provided a valuable injection of retail theatre.
I hope that IKEA will continue to embrace new product design, and even focus creative thinking on developing well designed products to meet the needs of an ageing population.
The 1996 “chuck out the chintz” campaign was genius, a total game changer. The timing was perfect and it gave people the energy and permission even to embrace IKEA’s fresh modern take on living. It succeeded in being both aspirational and inclusive. This was at a time when TV and press ads had much more impact, and it certainly worked to establish IKEA as the destination retailer for people wanting to improve not just their homes but also the way they live.
Today the brand has a simple, clear vocabulary, and it engages well with storytelling. I’m not sure we’ll ever see a campaign as effective as “chuck out the chintz” but arguably it did the right job for the brand at the right time. The challenge for IKEA, as with all other brands, is to build effective engagement with target customers through digital channels.
With a strong restaurant offer, the Family Card that provides free tea and coffee, the food market, the iconic hot dogs, and play areas for children, IKEA has developed a complete and compelling retail experience. This all adds to dwell time and in turn customer spend. It doesn’t happen by accident, and to make it work well requires a genuine commitment to providing facilities and services that will resonate with your customers.
The IKEA business model is very well executed, it’s difficult to imagine the scale of the logistics needed to globally supply over 400 stores with the volume of products they sell each year. At the same the brand has maintained a clear and unique identity based closely on its Swedish DNA, and it continues to present a highly alluring retail offer.
Ongoing IKEA, as with all businesses, can’t be complacent. We live in an ever changing world and this does present challenges. So for example, over time environmental concerns, or simply increases in the cost of fuel, may see the cost of shipping increase making products more expensive to ship and purchase.
People are constantly changing in a constantly changing world. Parents who engaged with the brand in the 1990’s in the UK will have now have grown-up generation rent children. Their shopping lists for their homes will be very different with less emphasis on big ticket items.
The key for any retailer is to be outward looking, and anticipate how external influences will impact consumer behaviour. This will of course be different in different countries and highlights the need to have in place an effective marketing intelligence function for each country.
From selling matches to selling to the world, IKEA founder Ingvar Kamprad has certainly left an exceptional retail legacy that for many has changed the way they shop and how they furnish their homes. It will be fascinating to see how IKEA evolves in the years to come.