IKEA's approach to marketing: Then and now
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If you want to test your relationship, assemble some IKEA furniture with your partner.
If you make it through the experience with your relationship intact, you can probably handle whatever life throws at you. If you make it through without yelling at each other, you should probably just get married.
Everyone knows it’s true: Assembling IKEA furniture is a pain in the ass. So why is it that when every consumer product in the world is focused on removing friction, IKEA is the number one furniture seller in the world?
The IKEA effect: If you build it, you will love it
The “IKEA effect” isn’t just marketing jargon. It’s a real thing that was identified by Michael I. Norton of Harvard Business School, Daniel Mochon of Yale, and Dan Ariely of Duke, who published three studies in 2011.
In the first study, researchers asked subjects to assemble IKEA furniture. When researchers priced the items people had assembled against completed IKEA furniture they hadn’t put together, people were willing to pay 63% more for what they had assembled themselves.
The concept isn’t new. The IKEA effect borrows from a psychological term called “effort justification”, which is when you value something more when you put more effort into it.
In marketing and product design, effort justification can transform consumers into “co-creators of value” rather than just recipients of value. If you can do that successfully, a community can form around your brand—and that’s worth its weight in all the world’s IKEA wood.
Keep reading to find out how IKEA built a brand based on consumer effort: the effort to visit the store, navigate its showroom maze, and build the products they purchased from it.
It shouldn’t work, but somehow it does. That “somehow” is what you’ll find here.
IKEA’s brand timeline
1926: IKEA founder Feodor Ingvar Kamprad is born in Pjätteryd, Sweden.
1943: At 17, Kamprad starts IKEA as a mail-order business, selling pencils, matches, and watches.
1948: IKEA starts selling furniture through the mail.
1951: IKEA publishes its first catalog, a staple of the company brand for years.
1953: IKEA opens its first showroom, where Kamprad can speak to customers.
1953: IKEA introduces flat-pack design, which lowers costs and damage rates to mail-order furniture.
1958: IKEA opens its first store in Älmhult, Småland under the name Möbel-IKÉA.
1960: IKEA opens its first restaurant, which would become a vital part of “IKEA as a destination” for families.
1963: IKEA opens its first store outside Sweden in Norway.
1965: IKEA opens its flagship store outside of Stockholm, and it’s the largest furniture store in Northern Europe at the time.
1970: A fire at the flagship store forces IKEA to open its first self-service station for customers, which is such a success that it forces a gradual redesign of its store model.
1970s: IKEA expands across Europe, most notably to Switzerland and West Germany.
1974: IKEA expands to Asia, with stores in Japan, Hong Kong, and Singapore.
1983: IKEA is forced out of Japan for failing to adapt their store model for Japanese culture.
1985: IKEA opens its first store in the United States, in Philadelphia.
2001: IKEA launches its first ecommerce websites in Sweden and Denmark.
2010: IKEA opens its first store in Latin America in Santo Domingo, Dominican Republic.
2015: IKEA launches a full-scale ecommerce effort with a redesigned website after years of lagging.
2016: IKEA enters the smart home market with the TRÅDFRI smart lighting kit.
2017: IKEA launches the IKEA Place iPhone app, which allows customers to place furniture in their homes with augmented reality.
2021: IKEA launches IKEA Studio, an iPhone app that allows people to design rooms with IKEA furniture.
Masters of experiential design: Why the IKEA showroom is annoying and brilliant
The average size of an IKEA store is 300,000 square feet, or five football fields. You wouldn’t know it, however, because the showroom is designed to make you feel like you’re in a small home.
In most department stores, you can make your way to a section that has the product you need. That freedom of choice doesn’t exist inside an IKEA. Instead you’re forced to surrender your petty wants and needs to IKEA’s showcase of the life you could be leading inside their curated spaces.
IKEA’s one-way, circular showroom design—what they called the “long natural way”—is both annoying and effective at increasing sales. If you’ve ever walked into an IKEA to buy bowls and walked out with hundreds of dollars’ worth of household items, you know what happened. You walked through their kitchen showroom, saw your bowls sitting on an actual table with actual place settings, and soon enough you were convinced you needed a whole dining set.
This happens in part because of a sense of urgency. When you’re walking through IKEA’s showroom, you’re walking on a one-way path in a maze, and tracing your steps backwards can be as perplexing as the instructions for a BILLY bookcase. As a result, your brain registers the here and now as your only chance to pick up an item and decide to buy it.
The psychological manipulation would be infuriating if it weren’t so damn pleasant—in China, IKEA creates such a comfortable environment that they encourage store visitors to take naps on the furniture.
But if you ever find yourself frustrated and lost in an IKEA, you can throw up your hands and curse the Guggenheim name.
In the early 1960s, IKEA founder Ingvar Kamprad visited the Guggenheim Museum in New York. When he was there, he noticed the way his journey through the museum had been tightly controlled and directed.
The Guggenheim’s architecture and interior design left him no choice but to climb to the top of the building and ultimately end up in the store, an experience you know all too well if you’ve ever been to a museum or art gallery.
When Kampar went back to Sweden and began to design IKEA’s flagship store just outside Stockholm, he remembered his trip to the Guggenheim. Why couldn’t he control his customers’ IKEA experience in a similar way?
It was a bold move that could have easily backfired, but it didn’t—because he also transformed the IKEA experience into one worth having.
IKEA as a destination: Store or theme park?
You might think IKEA is just a store. You’d be wrong, friend.
First, think of the effort it takes to get yourself to an IKEA. Most IKEA stores are located outside urban settings, where there’s enough space for one store to take up five football fields. If you looked up the walk score of an IKEA, it’s probably something like a two.
IKEA parking lots are like the ones at a theme park. If you don’t remember your zone, your car may be forever lost to the space-time continuum.
The thing is, early IKEA store designers knew the effort it would take to get you, your spouse, your rambunctious children, and your car to an IKEA store. So they made a few key decisions that transformed IKEA from Walmart-vibes to Disneyland-vibes.
1. IKEA launched a restaurant.
IKEA’s Swedish meatballs are now one of the most recognizable symbols of the brand. But that’s only one reason why IKEA’s restaurants are so integral to the company’s success.
Food keeps people in one place. Given the amount of time it takes for someone to navigate the store’s showroom experience, browse the marketplace, then collect flatpack items in the self-service section, the least IKEA can do is feed people as part of the process.
And the food is cheap. You can get a frozen yogurt cone for $1. IKEA’s low price point on meals is by design—when customers see affordable food prices, they’re more likely to think larger items in the store are just as affordable.
In 2019, IKEA’s food sales accounted for 5% of its revenue. While that might not seem significant, it’s nothing to scoff at when you learn IKEA’s total revenue for that year was $39.34 billion.
2. IKEA is proud of its Swedish origins.
An IKEA store is as close to Sweden as many people will get. Sweden lends its reputation for utilitarian, minimalist design to the IKEA brand, and customers who set foot inside an IKEA store immediately sense this same ethos.
Fun fact: IKEA’s iconic blue-and-yellow logo—similar to Sweden’s logo—wasn’t always so. IKEA’s original logo was red because founder Ingvar Kamprad associated it with low prices. You can still find red as an accent color in IKEA’s visual identity.
3. IKEA created a play area for children.
Ever hear of Småland? It’s a province in southern Sweden and it’s where children can play at an IKEA while their parents argue over which sofa is more comfortable.
Theme parks have rides, IKEA has a ball pit. Småland comes with licensed staff who take care of children for a whole hour for free. Kids can color, play with toys, or watch movies. Parents even get a little pager in case their children hate the whole experience and start crying.
Food, a theme, and a place where kids can play—it sounds like a theme park, not a store. While your kids would most definitely prefer Disneyland over IKEA, the store’s theme park elements make it a weekend destination, not a quick shopping experience.
That’s why you’re more likely to spend more. Who would make the trek out to an IKEA and only spend $20?
Key takeaways so far
- Create co-creators of value: Customers are likely to spend more money when they have to work for the product—”effort justification” contradicts rules about reducing friction.
- Experience design matters: IKEA is a successful company because they designed their showroom to create urgency and increase sales.
- IKEA is a destination, not a store: You run into Walmart when you want a quick shopping trip; you go to an IKEA when you’re ready for a shopping experience.
The IKEA Catalog: 70% of the marketing budget?
It’s the end of an era. In 2021, IKEA stopped producing its catalog.
For a company that boasts frugality as a moral imperative, the move makes sense. In 2004, IKEA stated that its catalog—a staple piece on many a coffee table around the world—gobbled up 70% of its total marketing budget.
IKEA founder Ingvar Kamprad, who died in 2018, would have salivated over the cost savings. The notorious tax evader was famous for shopping at flea markets and riding public transit despite hoarding billions of dollars in the bank. So what made him invest in a high-cost catalog in the first place?
Remember that IKEA first started as a mail-order business. The company began selling furniture in 1948, but they didn’t open their first showroom until 1953. As a way to advertise available products and give away coupons, Kampar published a pamphlet in 1950, then a proper catalog in 1951. He wrote most of the catalog copy himself during the 1950s.
But after several years, the catalog morphed into something more than just a product showcase. The IKEA catalog has become something of a collector’s item among enthusiasts as a record of domestic life through the ages. Some people read it cover to cover, and they anticipate its arrival just like they would for a new release from their favorite author.
In 2015, German literary critic Hellmuth Karasek was even compelled to review the IKEA catalog like he would any other book. “The characters are forced to crowd themselves between the furniture,” he jokes. “They seldom get their say, they barely speak coherently, and yet this work has become such a success.”
Seventy years after its launch, IKEA has immortalized its catalog into an exhibition at the IKEA Museum in Älmhult, where the first store was built. As part of the exhibition, you can find out more about how the catalog was produced and stage your own cover photoshoot with furniture from 1973.
Why is a catalog so deserving of the kind of preservation usually reserved for historical artifacts? While part of the answer lies in the sheer number of catalogs produced, a deeper reason has to do with the company’s ability to modify its offer based on cultural norms … which hasn’t always gone as planned.
Global expansion and cultural adaptation: How IKEA modifies product and marketing for location
In 2016, the IKEA catalog had reached peak distribution—200 million copies were sent to more than 50 countries in 32 languages. In 2013, IKEA catalogs outnumbered the amount of new Bibles in the world by more than double.
At that point, the catalog had become more than just a catalog—it had become an ethnography on home life throughout the world. According to Quartz, “IKEA has ethnographers who conduct field research into the domestic life of different regions through home visits, interviews and panels.”
That’s because the IKEA catalog is modified based on country of distribution. In China, for instance, photos of kitchens are cropped to appear much smaller than American kitchens. More significant, however, was IKEA’s depiction of women in the 2012 Saudi Arabia edition—or rather its lack thereof.
The company was criticized that year for erasing women and girls to “appeal to customers” (aka “men who spend money”). If you were to compare the UK edition to the Saudi Arabia edition, you would have found several instances of disappearing women, photoshopped out of sight. The company later apologized.
But IKEA’s global expansion strategy goes well beyond its catalog. When the company started opening stores outside of Europe, it was forced to reckon with the way other cultures liked to shop, fill their spaces, and see themselves in those spaces.
IKEA + Japan: Failure, then success and learning
IKEA’s most notable struggle with cultural misunderstanding was in Japan. While they initially opened a store there in 1974, they were forced to pull out in 1986 after years of declining sales.
Turns out, the average Japanese customer hated IKEA’s store layout and DIY furniture philosophy. Customers had no way to transport flatpacks of furniture home to their small apartments. And the store displays looked too European—a Japanese customer couldn’t envision themselves living in the typical IKEA display room.
When IKEA re-entered the Japanese market in 2006, the company performed extensive research and adapted their displays to resemble more of the Japanese way of life. They replicated this research in South Korea in 2014, when they conducted 900 interviews and home visits before setting up displays optimized for smaller bedrooms.
IKEA + India: New materials for hot weather
IKEA opened its first store in India in Hyderabad in 2018. Almost 40,000 people visited the store on opening day.
India represents a massive potential market for IKEA, but the company has had to make some modifications to their products to accommodate the country’s searing hot climate. As reported by the New York Times, untreated pine furniture just doesn’t adapt well to heat, so IKEA uses different materials for all products shipped to India.
Cultural norms have also informed IKEA’s product design. In India, people use water to clean their floors, so product designers added risers to most furniture to keep it from getting wet. You’ll also find more stools and folding chairs in an Indian IKEA, to account for more surprise family visits.
- Create something of cultural value: The IKEA catalog is a historical relic because it’s more than a catalog—it’s a cultural ethnography on domestic life.
- Adaptation equals survival: IKEA would not have been able to expand globally without learning from its mistakes about how different cultures use their products, through interviews and home visits.
Augmented reality: More design autonomy for customers
While IKEA may have officially axed their catalog in 2021, it seems like they’ve been preparing for a digital shift for years.
In 2017, IKEA announced their augmented reality iPhone app, IKEA Place, which allows people to visualize true-to-scale IKEA products in their spaces. Much better than a printed catalog, a lot of people would say!
If you’ve ever struggled to dig out your measuring tape so you can find out whether or not your living room can even accommodate a three-seater couch, this app is for you. IKEA Place lets you browse 3D models of more than 2,000 products, so you can actually place them in your home before you trek out to a store.
The key differentiator is the ability to show size. A previous version of IKEA’s AR app was more or less like its catalog in digital form—you could place pictures in your space, but the app wouldn’t give you much information about whether or not it would fit within certain dimensions. IKEA now claims the app shows the furniture’s size at 98% accuracy, with realistic representations of texture, fabric, lighting, and shadows.
So what does this mean for the future of IKEA? Are they abandoning their control freak tendencies and letting customers rely less on their physical stores?
Maybe. IKEA has tripled ecommerce sales between 2018 to 2021. But that’s not what’s most exciting about IKEA’s digital transformation. Instead they have their eye on the smart home.
The future of IKEA: Smart home innovations and brand partnerships
In 2016, IKEA made its first smart home investment with the TRÅDFRI smart lighting kit. While some reviews say the set up is clunky, most people agree it’s a good start if you want to dip your toes into smart home lighting without breaking the bank.
But where the company is really making strides is with partnerships. IKEA knows that smart home systems are just that: an ecosystem that relies on integration. Rather than go at it alone and force people to rely solely on IKEA for its smart home system, the company has made some strategic partnerships to help them amplify the quality of their smart home products.
The TRÅDFRI lighting kit, for example, can be controlled with the Philips Hue app. And in 2017, IKEA announced its collaboration with Sonos to build smart speaker technology into IKEA furniture.
The SYMFONISK is a multi-room wifi speaker that integrates with other Sonos products. You can get it as a table lamp speaker or a bookshelf speaker, depending on your taste. They also integrate with other products in the Sonos family, like the Sonos One, Beam, Play:5, Play:1, and more.
But the key here is full integration at a great price—so the speakers also integrate with your TRÅDFRI lights and your IKEA smart blinds, meaning you can automate morning sequences where your blinds go up, your lights turn on, and your music starts playing automatically.
While IKEA may have solid competition with Wayfair nipping at their heels, it’s clear the company is going to be around for a long time. The question now is how affordable will they make the smart home—and will they be able to replicate their theme park brand online?