As the Swedish giant celebrates its 25th year in the UK, Nicola Harrison looks at how it has influenced the British public’s perception of interior design and its impact on the market.

Ikea

Swedish meatballs, the Billy bookcase and even riots on store opening days. For better or worse, Ikea has immeasurably changed the landscape of furniture retailing since opening its first UK store in Warrington, Cheshire, in 1987.

Now 25 years on and celebrating its anniversary, Ikea has become the largest furniture retailer in the UK, making aspirational and stylish products for the home attainable for the masses through its low prices. And that is its single biggest achievement, according to Ikea UK and Ireland acting country manager Carole Reddish.

She identifies the 1996 ‘Chuck Out Your Chintz’ TV ad as a defining moment, not just for Ikea but for British style.

Carole Reddish says Ikea was in the right place at the right time to cater for the UK’s interest in interior design

Carole Reddish says Ikea was in the right place at the right time to cater for the UK’s interest in interior design

“People at that point were looking for a different way to furnish their homes and we were here. The timing was good,” she says, modestly.

Reddish says that in the 25 years since Ikea launched, people have increasingly shown more interest in their homes. “I believe we’ve contributed to that,” she maintains.

Accessible style

The 1990s boom in interest in interior design was fast-tracked by TV shows such as Changing Rooms. The buzz around home improvement and the timing of Ikea’s expansion meant the retailer was well poised to reap the benefits.

“What they have done is make style a lot more accessible,” says Conlumino managing director Neil Saunders. He says that before Ikea’s arrival, furniture was “fairly expensive and something that was replacement driven, rather than fashion driven”.

Ikea created demand for affordable, modish products for the home, he says. “Ikea has stimulated purchase frequency. It got more people thinking about home design and made the market more democratic, ” Saunders points out. “Other retailers have responded in kind with their own value ranges.” Ikea also made the flat-pack model ingrained in furniture buying. While the instructions might have frustrated some customers, it meant product could be taken home that day.

Saunders says such immediacy affected rival retailers. “Ikea set higher expectations,” he observes. “You don’t have to wait 20 weeks for your sofa, you can take it home that day.”

Price appeal

Availability and immediacy were not the only factors that put other furniture retailers on the back foot. Price was a big appeal too.

Ikea aims to be the best value furniture retailer in the market, and uses its giant scale to produce quality products at knock-down prices. Few retailers can compete with its model. For instance, it slashed prices by 5% in 2010/11, and reduced them by a further 0.5% the following year.

“It’s our job to have the lowest prices on the market,” says Reddish. “We’re always trying to find improvements in the way we design product. We run efficient operations and being resourceful is connected to our sustainability agenda.” The retailer plans to be energy and resource-independent by 2020.

“Small improvements in the way we make a table can mean big savings for the customer,” Reddish notes.

For instance, she explains, Ikea makes its Norden table and chair from the top of the tree “which is usually wasted”, rather than the often-used bottom of the tree.

Saunders says Ikea is “pioneering in the way it does business”. He adds: “Large production runs enable them to sell through at cheap prices while maintaining style. It’s very difficult for other players to copy. You need global scale.”

Ikea believes its 1996 Chuck Out Your Chintz ad campaign was a defining moment for both the retailer and British style

Ikea believes its 1996 Chuck Out Your Chintz ad campaign was a defining moment for both the retailer and British style

Destination stores

Ikea stores themselves also offered UK consumers something new. The retailer was one of the first to introduce roomsets as well as a catering offer to increase dwell time. Food was introduced after Ikea founder Ingvar Kamprad noticed that shoppers were leaving stores because they were hungry. Now its Swedish meatballs and hotdogs are almost as iconic as the furniture. Ikea has served 11.6 billion meatballs and 1.2 billion hotdogs to Brits over the years.

“Ikea was early at putting leisure into stores,” says Saunders. “It wanted people to linger. Lots of retailers now focus on leisure.”

The big yellow and blue boxes became destinations in their own right, so much so that one of its most recent store openings – Tottenham in 2005 – sparked a riot, as shoppers surged to get their hands on the best deals.

People fought over sofas, and cars were abandoned on the north circular road nearby.

Tellingly, one of Reddish’s main objectives is to change people’s perceptions of the Ikea shopping experience. After 13 years at the retailer, Reddish took the reins here at the beginning of the year, following Ian Duffy who was taken ill after just a few weeks at the helm. She says people still perceive Ikea stores to be “jam packed” as they were when the retailer first launched.

As Ikea opened more shops, the crowds of customers became more manageable and the shopping experience improved, maintains Reddish. “But the perception of our brand is that it is still like that,” she acknowledges. “The perception of numbers of people in store is the big thing. We want to help the consumer understand it is an enjoyable and pleasant experience.”

Ikea is simplifying its queuing system and speeding up tills, and is revamping its Market Halls to provide more inspiration to shoppers – something that the usually functional Ikea stores have lacked in the past.

Traditionally, Ikea has focused on moving customers along its famous racetrack, which – frustratingly for some – takes people through all parts of the store, thereby increasing the chances of add-on purchases. As Saunders says, it’s designed to “maximise the buying opportunity”.

But Reddish wants to bring more creativity into stores. “We want you to step off the path and be inspired,” she says. In-store theatre is being introduced, such as workshops on how to customise products as well as sampling from the Swedish Food Market. “It’s about bringing theatre to the shopping experience,” she adds.

In the revamped Market Hall, more collections have been added, and the retailer has increased focus on grouping products together.

Tips and ideas are communicated to shoppers. “We’re giving more colour and vibrancy and life. We should make the visits worthwhile for the customer,” she says.

Customer focus

Although it is a trait that most retailers boast about, few are as obsessed with the customer as much as Ikea. It constantly re-evaluates its proposition to reflect the changing way people live.

“We look into what life at home is really like – how it’s changing for people,” says Reddish. “What’s going on in the home? How do you take your evening meal? What happens at breakfast? Now your 21-year-old son is coming back from university, how does that change things? It’s about creating convenience for the customer, listening to their needs.”

Ikea is expert at producing solutions for the ever-smaller homes Brits are inhabiting. The retailer invested in its beds proposition because it believes that as adult children return to the nest, more time is being spent in bedrooms. “People are sloping off to the bedroom, and using technology in the bedroom. We’re reflecting how society is living,” says Reddish.

Bricks and clicks

But while Ikea has mastered the art of selling in its stores, it has been slow to launch online.

At the top of the Ikea tree, there has been some reticence about selling big-ticket online. Saunders describes Kamprad as “quite traditional”. “He views stores as being the hero,” says Saunders, who argues that online is becoming more important for the retailer.

Reddish agrees. “People want choice,” she says. “We’re all a lot busier that before. You don’t want to spend all your time shopping in store.”

A combination of bricks and clicks is essential says Reddish, who believes many customers still prefer coming into store to “touch and feel” the products. “We have 41 million people visiting our stores, they want to be inspired,” she says.

But the online offer, launched in December 2007, will have an increasingly big part to play in Ikea’s future. Last year, sales through the channel rose 25%. Ikea added 1,500 lines to its online offer last year, bringing the total to 6,000.

It also invested £4.7m in reducing the cost of home deliveries from an average of £35 to between £15 and £25 and launched a mobile site.

Reddish says the online channel enables Ikea to sell to those customers who are not within easy reach of one of the retailer’s 18 UK stores. “Before, you might have had a distance to travel, but now you have an alternative solution,” she says.

Reddish, who has worked in retail all of her career, describes the past two to three years as “the most exciting” because the online revolution has enabled Ikea to “communicate digitally and get messages out there”.

Ikea might have lagged in certain respects, but Saunders says the furniture giant is as relevant and pioneering today as it has ever been. “With new openings, lots of people turn up – it’s the real category killer,” he says. “Ikea is a real destination for furniture and I don’t think you have many of them.”

Looking ahead, Reddish is acutely aware of how hard Ikea must work to persuade cash-strapped consumers to part with their money, and identifies not just other retailers but other purchases, such as technology and holidays, as sources of competition.

So Ikea will strive to continue to bring down prices while improving the customer offer, including affordability of its services, “to help customers get to stores more easily and get goods home more sustainably”.

Over the past 25 years, Reddish believes the biggest change in Ikea has been the way it gets goods to the customer. “When we first opened, you would pick up yourself. Now you don’t have to – we can pick for you, deliver for you, assemble for you. But there’s still more to do.”

Ikea will evolve further over the next 25 years, but no doubt its core principle, outlined by Reddish, will remain the same: “We’re a business and want to make a profit. But it’s more than just selling furniture. We want to improve the way people live.”

Ikea facts and figures

Ikea 2013 catalogue

Ikea 2013 catalogue

  • 15 million The number of 2013 Ikea catalogue copies printed for the UK and Ireland. Globally, 208 million were published in 29 languages.
  • Since 1987, more than 8 million Billy bookcases have been sold in the UK. One Billy bookcase is sold in the world every 10 seconds.
  • More than 12.5 million Ikea mattresses have been sold in the UK since 1987. On average, that means that one in five Brits sleeps on an Ikea mattress.
  • 128.5 million The number of candles sold in Ikea’s UK stores since 1987.
  • 8,000 The number of people employed in Ikea UK and Ireland stores. The total number of employees at group level is 131,000.
  • Ikea Group operates 290 Ikea stores in 26 countries.
  • Ikea has 6.8% market share in the UK. In the year to August 31 it generated sales of £1.23bn. The retailer launched online in the UK in 2007.