“Few people can claim to have genuinely revolutionized retail,” said Neil Saunders, managing director of the research firm GlobalData Retail. “Ingvar Kamprad did.”
The company, which has 412 locations in more than 40 countries, has become an international empire. Its sprawling stores with their tortuously winding routes have continued to thrive in an era of hurried online shopping. Analysts say Ikea has been successful in not only getting shoppers to linger for hours, but also getting them to come back, over and over, whether for mattresses or meatballs.
“Before Ikea came along, furniture shopping was a laborious task that a lot of people dreaded because they felt like they were making a decision they had to live with for 30 years,” said Warren Shoulberg, a consultant to the home furnishings industry. “Then Ikea showed up and said, you can buy something and use it for a couple of years — or you can keep it longer — but this isn’t necessarily something you’re going to pass down to your kids or your grandkids. That was a remarkable transition.”
The retailer has also been successful, he added, in creating a shopping destination. Traditional furniture stores may line up all of their sofas in one section and beds in another, but Ikea displays items by room, so shoppers can see how different pieces might look together.
“They provide an experience — the displays, the decorating ideas,” he said. “And you could stop by the cafe for a lunch of Swedish meatballs while you’re there.”
That’s not to say the shopping experience is always positive: Visits to Ikea sometimes come with their share of marital spats and couples’ disagreements. “The store literally becomes a map of a relationship nightmare,” clinical psychologist Ramani Durvasula told the Wall Street Journal.
Kamprad started the company as a mail-order business at age 17. He sold pens, picture frames and nylon stockings before expanding into armchairs and other types of furniture, according to Ikea’s website. The business model quickly caught on: It turned out shoppers were willing to pick up their own furniture, take it home and assemble it in exchange for lower prices. The company was also able to cut costs by packaging large pieces of furniture in compact cardboard boxes that could be easily transported.
Ikea “gave rise to the revolutionary idea of flat-pack furniture,” Saunders said. “Distributing flat-pack was much more efficient and economical than shipping fully made items. It also divided the effort. Prices were lower because the customer had to assemble the product — that was the trade-off or compromise.”
In 2016, the company had annual sales of $37.6 billion, making it the world’s largest furniture retailer. Its success has also given way to a cottage industry of businesses that specialize in assembling Ikea furniture. Ikea itself has gotten into the fray: In September, it purchased TaskRabbit, a start-up that providers contractors for odd jobs, to appeal to a generation of time-strapped consumers who want Ikea furniture without the hassle of assembling it.
“Ikea made good design accessible to people of all incomes,” said Milton Pedraza, chief executive of the Luxury Institute, a research firm in New York. “Before that, furniture was bulky, it was expensive, and it took forever to arrive. You’d have to wait six to eight weeks and spend a fortune to get what you wanted.”