Life without Ikea? Many a devoted fan of the furniture retailer would find it almost impossible to imagine. About 45 million UK shoppers visited its stores last year, and the Billy bookshelf and Ektorp sofa now grace homes the length and breadth of the country.
Ikea celebrates its 21st birthday in the UK this week. So how has it evolved to become such a household name since flinging open the doors to the first of its big blue boxes in Warrington in 1987?
Over the years, the retailer’s product range has become its identity. Its 9,500 products are designed to appeal to a range of tastes, but its intention has always been to maintain a “modern Scandinavian style”, says mid-Europe manager Peter Høgsted. “We have that today and we had that 21 years ago.”
Ultimately, he believes Ikea has proved successful in the UK owing to a combination of factors: low price, wide range, “design and quality” and “knowledge and ideas about life at home” – and all under one enormous roof. “Those things are not seen as special in isolation, but when we combine them, we become different to other UK retailers,” he adds.
What’s particularly interesting about Ikea is the fact that, from Bristol to Berlin, every single store is exactly the same. Ultimately, says independent retail consultant Richard Hyman, it has managed to become a successful international retailer by “breaking the rules”. He adds: “The rule is generally ‘Think global, act local’, and to not do this would suggest an absolute certainty to fail. But they make no concession to this at all.”
But perhaps one of the main reasons for Ikea’s rapid rise has been its often unfeasibly low prices. Finding another retailer that can better it might be difficult: it currently stocks a dining table and four chairs for£119, a mirror for£2.99 and a mattress for£25.
Høgsted admits it can be “difficult for people to understand that good quality comes with a low price”. But he stresses: “You can go and look at kitchen suppliers, wardrobe suppliers, mattress suppliers… if you can find one that has a better guarantee than us, I would love to hear from them. We have a 25-year guarantee on our mattresses. We are not selling bad quality.”
As testament to this, the retailer has often managed to transcend design snobbery. Many a home or interiors editor will happily photograph a£25 Ikea lamp sitting atop a£1,000 table. But, as Høgsted says, product design can be more challenging if you have to consider price. “Designing a table for£1,000 is easy. If you have to design a table for£79, it’s very difficult.”
And, as everyone knows, Ikea shoppers have to put in a certain amount of effort to benefit from these low prices. And that extra effort certainly doesn’t deter shoppers – even when it comes to its flat-pack furniture, which could test the patience of a saint. Even after 21 years, it appears this is one aspect of Ikea’s offer that consumers have yet to master.
Leader of the flat-pack
Høgsted believes such grumblings about flat-packs have been largely confined to the British. “Last year we had 500 million visitors in our stores worldwide. Of those, 45 million were in the UK, and I must say that the majority of noise about flat-pack furniture comes out of that 45 million. I don’t hear of people in other countries having so much difficulty in putting our products together,” he laughs. “Maybe it’s a joke, because I don’t believe British people are less able than the rest of Europe, but maybe you don’t have as long a history in flat-pack furniture?”
Ikea’s straightforward approach has probably been instrumental in creating its army of followers. Shoppers are asked to do the majority of the work themselves in terms of finding products in the warehouse, wheeling them to the checkout and assembling them at home. But it’s a price that the customers have always been happy to pay. “We believe in you do 50, we do 50, and together we save money,” explains Høgsted. “There is no such thing as free home delivery or interest-free credit. It always comes with a price, and some other retailers include that in the higher price point. We believe in a different concept. It’s transparent.”
Hyman says that, while Ikea’s not the most customer-friendly place to shop, there is no denying that it works. “Is it the most pleasurable shopping experience ever? No. Do the long queues at the end irritate people? Yes. But it’s a fantastic business and a tremendous success story – primarily because they deliver what they promise.”
There was one famous occasion, however, when the public’s eagerness to make the most of the retailer’s price transparency backfired. At the midnight opening of its Edmonton store in February 2005, 6,000 people descended on the site near London’s North Circular to take advantage of cut-price offers, including a three-seater leather sofa for£45. People abandoned cars on the dual carriageway in their desperation to get to the store, and the ensuing stampede led to customers getting crushed and one man being stabbed.
Høgsted points out that Ikea planned the event with local authorities and police, and that the reason it opened at midnight was to avoid traffic congestion. “We certainly weren’t surprised by the 6,000 people that turned up, but we were surprised by the small group that couldn’t behave in a proper manner. Maybe we were naïve in the way we looked at it,” he reflects. “I’ve asked myself many times whether you should take the whole blame as a retailer, or whether you should expect people to behave themselves. It’s both.”
Every store opening in the past 21 years has created a local buzz. One of its most recent, in Belfast last December, was no exception. The event attracted Ian Paisley and Martin McGuinness, Northern Ireland’s first and deputy first minister respectively. Having put years of enmity behind them, the two were photographed sitting on a red Klippan sofa with Ikea’s current campaign slogan – “Home is the most important place in the world” – displayed behind them.
Some of Ikea’s marketing campaigns, such as “Chuck out the chintz” and “Stop being so English”, have proved iconic. Høgsted says the latter, launched in 2000, coincided with one of the key milestones for Ikea in Britain. There was, he believes, a certain “liberation of society and a belief in a new future” that had come about after the Labour Party came to power in 1997. At the same time, viewing figures for TV home improvement programmes were soaring.
“Together with a boom in the economy, people started to invest in their houses in a different way,” he says. “We had a good period when things were coming together with a movement in society and with home furnishing on the agenda. That campaign was about challenging English society and politeness.”
Since then, creating such high-profile campaigns has proven difficult. “Maybe when you grow as a company you lose a little of the challenging approach you have when you’re a young company,” he says. “For a number of years we’ve struggled to follow the success of ‘Chuck out your chintz’. We’re not seen as the friendly rebel that we were when we were a younger company.”
Although marketing campaigns don’t necessarily result in a big uplift in sales, Ikea’s aim is for the brand to be discussed in pubs, offices and universities nationwide. “That’s what building a brand over time is all about and what most brands are aiming for,” he says.
The home furnishings sector is notoriously difficult for retailers, and it’s certainly not always been plain sailing for Ikea. For the year to August 31, 2006, profits fell from£75.9 million to£67.9 million. But, as part of a five-year strategy that ends this year,£250 million has been ploughed into updating existing stores and£500 million has been invested in store openings. The results are becoming evident, with sales for the year to August 2007 having leapt more than 7 per cent.
So where now for the world’s biggest and probably best-known furniture retailer? Planning regulations have made finding new sites tricky, whether in city centres or out of town. But Høgsted believes that having 17 stores serving a population of 60 million is “far too few”, and says it could “easily build an additional 10” in the UK – if it can get the sites.
So good news for Ikea fans – it looks like there’s still scope for more of those colossal blue boxes, even within the UK’s comparatively tiny isles.