The Key in IKEA
When 17-year-old Ingvar Kamprad founded IKEA in 1943, he could not have envisioned that his company would one day become the world’s most iconic home furniture retailer. With its bold yellow typeface surrounded by a vast ocean of blue, the IKEA logo has now become synonymous with the vibrant colors of its country of origin, Sweden. However, IKEA embodies more than just the colors of its native country. The acronym IKEA stands for Kamprad’s initials (IK) and the first letters of the farm (Elmtaryd) and village (Agunnaryd) in southern Sweden where he grew up. Agunnaryd was stony and rugged, which forced its inhabitants to be “thrifty” and “innovative.” These traits, along with the Swedish phrase “Lagom är bast” (the right amount is best), were principles of Kamprad that IKEA also adopted from the beginning. When IKEA crossed the Atlantic Ocean in 1985, its tradition of aiming to achieve balance in every area and juncture of everyday life created not only furniture but a comprehensive shopping experience that effortlessly translated to the unique identity of American society.
At the time IKEA was founded, competing furniture companies offered personalized service and advice in ostentatious showrooms where salespeople competed for commissions. Kamprad, however, realized that people in his province were willing to exchange these amenities to cut costs. Over time, IKEA has adapted its frugality to help visitors with their shopping experience. It provides its customers with pencils, paper, tape measures, store guides, catalogs, strollers, and shopping bags. This Swedish way of shopping is supported by Hofstede’s cultural dimensions, which labels Sweden as an individualist society where “there is a high preference for a loosely-knit social framework in which individuals are expected to take care of themselves and their immediate families only.” These discretionary tools, along with the limited amount of sales representatives present, allow customers to choose what “lagom” or “the right amount” means to them. As customers move through the store, IKEA’s unique “one-way” layout also isn’t an illusion of choice. Although the layout is designed to guide customers in a “natural” path that runs through the entire store, there are also shortcuts strategically placed between showrooms. This allows customers to choose their own unique adventure and builds upon the customization of IKEA’s shopping experience. This appeal translates well to the United States, where the furniture company netted $3.310 billion in 2019 across 52 different locations (second only to Ashley Home Furniture). It’s no coincidence that according to Meik Wiking, chief executive of the Happiness Research Institute, “[Lagom] to the [Swedes] seems to be what freedom is to Americans.” The characteristics of lagom that IKEA represents are interpreted by American consumers as the freedom of choice and allow the Swedish company to seemingly uphold American individualism.
Despite the commercial success of IKEA in the United States, the overwhelming individuality of some American consumers actually punishes the company. These consumers are “very demanding and tend to reward markets that go out of their way to address individual tastes and needs.” (Ferrell and Hartline, Marketing Strategy 5th Edition) For them, both the shopping experience and the products themselves need to be personalized. However, IKEA has operated primarily as a standardized business with limited degrees of local adaptation since it arrived in America. According to a Washington Post article in 1986, “[IKEA] has continued to build according to Scandinavian specifications, a practice that means that some of the tables are taller and the beds (and the otherwise well-designed bed linens) narrower than those made by American manufacturers.” Adapting its offerings and stores to local tastes is directly at odds with IKEA’s cost-conscious operating strategy and disrupts the balance of the five dimensions of its “Democratic Design” (function, form, quality, sustainability, and low price). For other Americans, the color of the furniture also doesn’t do them any favors. Since the post-Modernist movement of the 1960s, American architecture was a “contrast between established norms versus individualism and self expression.” (Ilmiah, The Cultural Meaning of American Architecture) However, the neutral and monochromatic color palette of Scandinavian design is contrary to the American notion of individuality. For some consumers, IKEA clashes with the diversity of the American lifestyle that extends to both the private and public spheres.
Once IKEA customers make it past the furniture showrooms, they arrive at the open-shelf warehouse on the bottom floor. With its grandiose scale and vast appearance, the warehouse’s associated land cost and traffic access is the main reason why the vast majority of IKEA stores are located outside of city centers. Although it’s designed to maximize efficiency and profits, its appearance also appeals to the imagination of American consumers. Any windows that appeared in the showrooms are notably absent, and these sources of natural light are replaced by artificial ones. The beige flat packs, with their foreign names and mysterious parts, create a sense of intrigue for shoppers. And the maze-like monotony eventually leads customers unambiguously to the checkout, with heavy machinery scattered along the way. The American imagination stems from Jackson Turner’s frontier thesis and was “generated by this justification of American exceptionalism.” (Massip, The Role of the West in the Construction of American Identity: From Frontier to Crossroads) Today, exploring IKEA’s warehouse and its otherworldly looks evokes the sentiments that were once expressed when reminiscing the American West. All of these distinct elements of IKEA’s warehouse are unique to its business model and draw upon the American imagination.
Lastly, the process of transforming a flat pack from IKEA’s warehouse to a finished product in the home creates a sense of attachment to the furniture owner. Although IKEA does offer delivery services, they provide free rented car racks that encourage customers to bring home their flat packs themselves. Once the furniture is brought home, the do-it-yourself approach that is the hallmark of IKEA creates a sense of accomplishment in the piece of furniture that the consumer carefully selected, transported, and eventually assembled themselves. Admittedly, some customers view self-assembled furniture as of lesser quality and are willing to pay for the convenience that traditional furniture retailers provide. However, these customers are often older with more savings and are not part of the young audience that IKEA tries to attract with its cost-conscious philosophy. In addition to this, these younger audiences are also still influenced by the notions surrounding the classic phrase “self-made man” (coined by Henry Clay in 1842) that is used to “describe individuals whose success lay within the individuals themselves, not with outside conditions.” Americans take immense pride in their own accomplishments and give respect for self-achievements, not “achievements based on rights of birth.” (Kohl, The Values Americans Live By) Therefore, the sustained success of IKEA in the United States can also be attributed to the sense of ownership that the entire process instills in its customers.
From the start, IKEA has been guided by its “Democratic Design” principle which seeks to achieve a balance between all five of its dimensions. Today, this balance is not always equal, but that is probably for the best. Since IKEA launched its People & Planet Initiative in 2012, it has been well ahead of the international curve in terms of acknowledging and addressing sustainability issues. Through developing responsible sourcing programs, continuing to improve resource utilization, and dramatically reducing greenhouse gases in absolute terms, it is currently on the trajectory of its goal of becoming a circular and climate-positive business by 2030. Despite the stark contrast between Swedish and American lifestyles and therefore consumer spending habits, IKEA has seamlessly translated across the Atlantic without compromising its core beliefs. Let it serve as a reminder that multinational corporations can return profits to their shareholders while focusing on sustainability efforts. Popular to contrary belief, the two aren’t mutually exclusive.
