marketing strategy ikea case study

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Ikea target audience, ikea marketing channels, ikea marketing strategy, ikea marketing strategy 2024: a case study.

Founded in 1943, Ikea operates 422 stores in 50+ markets. The favored furniture brand has an impressively wide customer base, with nearly 70% of its stores in Europe. Ikea added 19 stores last year, including its first in India. The Ikea marketing strategy includes some of the most iconic logos, campaigns and companies in recent history.  

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Ikea serves the unique functional needs of each target audience, with special attention to 16-34-year-old adults. It has solutions for:

• Single people not living at home
• Newly married couples
• Families with the youngest child under six
• Older married couples with dependent children
• No children families
• Labor force
• Professionals 

Thus, it uses the following types of product positioning :

• Mono-segment positioning. It appeals to the needs and wants of a single customer segment that is cost-conscious and prefers value for money.
• Adaptive positioning. It believes in periodically repositioning products and services to adapt to changes in customer preferences. Its Swedish furniture chain considers the dynamic nature of customer preferences. For instance, its latest products reflect increasing minimalism on the global scale. 

Ikea utilizes the power of the following marketing channels: 

• Mobile Application
• WebEngage: Email, SMS, and Whatsapp Marketing
• Social Media
• Telecalling
• Commercials

The Ikea marketing strategy contributes majorly to its success because it's original, imaginative, and distinctive while maintaining a transparent value proposition.

A Creative, Consistent Brand Theme

From the Swedish national colors on its buildings to rich meatballs in its store cafeterias, Ikea's marketing strategy reflects its cultural heritage proudly. It infuses all elements of their identity with a sense of self-assuredness that maintains their identity in the market of stiff competition. 

Emphasizing Affordability and Sustainability 

Understanding that a simple tiered strategy won't encourage repeat business, Ikea extends customization, flexibility, and mix-and-match furniture modules. It effectively combines the elements of affordability and sustainability in its marketing strategy to ensure success.

While the furniture options don't pledge a lifelong guarantee, the products are built to last. Even its reusable shopping bags reflect its commitment to sustainability.

Sponsorship and Influencers 

IKEA-sponsored comedic series Easy to Assemble. Its innovative content marketing was way different from a furniture product demo. Incorporating sponsored digital marketing campaigns and social media influencers have boosted the Ikea marketing strategy. 

Ikea’s Easy to Assemble Series

Exceptional In-store Experience

Ikea brilliantly displays products employing the best lighting systems to generate more sales. It strategically arranges best-matched items in mock rooms to encourage impulse purchases and inspire decor. The company also extends excellent customer service to provide a memorable experience and incite customers to come back for more.

Ikea’s Store Decor for Inspiration

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Website and Mobile Application Marketing

Ikea ensures an optimal mobile website's speed, button displays and gesture controls on its website and mobile app to retain and attract individuals to the site. It carefully invests in its UI/UX , enquiry-based chatbot, and regular updates on new offers, discounts, and promotions. 

One of the most successful marketing moves includes downloading its 3D modeling app to envision a dream home. It's one of its most successful marketing moves that allows IKEA to upsell its low-demand items by creating a desire in its customers to revamp the room.

Ikea’s Website With Engaging Content

Ikea's SEO (Search Engine Optimization)

Ikea's marketing strategy aims at enhancing the site's visibility for relevant searches to attract the attention of new and existing customers. It includes the right product-specific keywords and Google advertisements to further augment its organic ranking .  

Ikea Ranking for Bookcases on Google’s First Page

Ikea's SMM (Social Media Marketing)

Ikea's handles are very active on digital marketing platforms like Facebook, Instagram , Twitter, and Youtube . Their digital presence is impressive, with more than 30 Million likes on Facebook, 1 Million followers on Instagram, 5.3k followers on Twitter, and 41.2k subscribers on YouTube.

Ikea’s Instagram Profile

Its Instagram bio links to its website. The website also has links to its various social media posts. Its 'view shop' and 'call' options for product catalog and direct assistance, respectively, are a testament to a well-crafted Ikea marketing strategy.   

Ikea’s Youtube Advertisements 

IKEA also conducts free online workshops that lure lots of enthusiastic customers, resulting in gaining leads.

Ikea’s Online Workshop Ad

Content Marketing

Ikea relies on its content marketing strategy to create a distinguished presence amongst furniture brands. Its commercials, print ads, social media, and website stands out with attention-grabbing content. It combines innovation and humor to present the brand's core values and inspire people. 

Ikea’s Captivating Commercial 

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IKEA’s Marketing Strategy Explained

Known for its distinctive flat-pack furniture and sleek Scandinavian design, IKEA is a brand found in millions of homes all around the world. Founded in Sweden in 1943, IKEA has grown from a small mail-order business to a multinational corporation with over 400 stores in more than 50 countries. This remarkable growth is not just a testament to its innovative products but also to its masterful marketing strategies.

For marketing professionals, understanding IKEA’s approach offers a treasure trove of insights. IKEA’s success is built on a blend of strategic brand positioning, innovative product development, and a keen understanding of customer experience. By dissecting IKEA’s marketing strategies, one can glean valuable lessons on how to create compelling brand narratives, engage customers effectively, and drive sustainable growth.

Exploring IKEA’s marketing tactics reveals how the company has consistently stayed ahead of market trends and consumer expectations. From its in-store experience to its digital innovations, IKEA’s marketing strategies are crafted to resonate deeply with its audience. For marketers aiming to elevate their own brands, IKEA provides a compelling model of how thoughtful, customer-centric marketing can lead to global success.

Establishing a Strong Brand

IKEA’s brand identity is a cornerstone of its global success, characterized by consistent messaging that emphasizes simplicity, affordability, and functionality. Every aspect of IKEA’s communication, from advertising to in-store displays, reinforces these core values. The brand’s commitment to offering practical and stylish solutions at accessible prices has made it a favorite among consumers worldwide.

Central to IKEA’s identity is its Scandinavian design heritage. The minimalistic and modern aesthetics of its products are not just visually appealing but also highly functional. Clean lines, neutral colors, and innovative storage solutions define IKEA’s product range, making it easy for customers to integrate pieces into their homes regardless of personal style. This design philosophy not only appeals to a broad audience but also sets IKEA apart in a crowded market.

IKEA’s vision, “To create a better everyday life for the many people,” encapsulates its overarching mission. This vision drives every decision, from product development to customer service. By focusing on improving daily living, IKEA connects with customers on a profound level, fostering loyalty and trust. This vision also guides IKEA’s sustainability efforts, ensuring that the brand remains relevant and responsible in an ever-evolving marketplace.

Affordable and Functional Design

IKEA’s product strategy is a masterclass in democratic design, seamlessly balancing form, function, quality, sustainability, and affordability. This holistic approach ensures that each product not only looks good but also serves a practical purpose, is made to last, and is accessible to a wide range of consumers. By keeping prices low without compromising on quality or aesthetics, IKEA democratizes good design, making stylish and functional home furnishings available to the masses.

A pivotal element of IKEA’s product strategy is its flat-pack innovation. By designing furniture that can be packed flat and assembled by the customer, IKEA significantly reduces production and shipping costs. This clever approach not only keeps prices down but also enhances the customer experience. Shoppers can transport their purchases easily and enjoy the satisfaction of building their furniture. This model also aligns with modern consumer preferences for convenience and DIY solutions.

IKEA also creates a sense of urgency and exclusivity through its limited editions and special collections. Collaborating with renowned designers and artists, IKEA releases unique product lines that are available for a limited time. These collections generate buzz and excitement, drawing customers to stores and online platforms to secure exclusive items before they sell out. This strategy not only boosts sales but also reinforces IKEA’s image as a dynamic and trend-conscious brand.

Through these innovative strategies, IKEA continues to lead the market, offering products that meet the evolving needs of its customers. The combination of democratic design, flat-pack convenience, and the allure of limited editions keeps IKEA at the forefront of the industry. For marketing professionals, IKEA’s product strategy provides valuable insights into creating offerings that are practical, affordable, and desirable, ensuring sustained customer interest and loyalty.

The IKEA Store Experience

IKEA’s approach to customer experience and engagement is designed to make shopping both enjoyable and immersive. Central to this is the unique store layout, often referred to as the ‘IKEA maze.’ Unlike traditional retail layouts, IKEA’s stores are designed as a winding path that guides customers through a series of carefully curated rooms. This layout encourages exploration and discovery, allowing shoppers to see a variety of products in context and sparking inspiration for their own homes. The ‘maze’ concept ensures that customers spend more time in the store, increasing the likelihood of additional purchases.

Enhancing the in-store experience further are the various services IKEA offers. Each store features a restaurant that serves affordable and tasty meals, often highlighting Swedish cuisine. This not only provides a convenient dining option for shoppers but also extends the time they spend in the store. Play areas for children, known as Småland, allow parents to shop at ease while their kids are entertained in a safe environment. Additionally, IKEA offers home planning services where customers can get professional advice on designing their spaces. These services collectively transform a trip to IKEA into a comprehensive and engaging family outing.

Showrooms play a crucial role in IKEA’s strategy by showcasing products in real-life scenarios. Each showroom is meticulously designed to demonstrate how IKEA’s furniture and accessories can be used in different settings, from small apartments to large family homes. These setups not only highlight the functionality and versatility of the products but also provide practical ideas that customers can replicate. By presenting products in such an accessible and relatable manner, IKEA effectively bridges the gap between inspiration and purchase, helping customers visualize how the items would fit into their own lives.

Through these thoughtful strategies, IKEA has created a shopping environment that is both engaging and practical. The unique store layout, comprehensive in-store services, and realistic showrooms collectively enhance the customer experience, fostering a deep connection between the brand and its customers. For marketing professionals, IKEA’s focus on immersive and enjoyable shopping experiences offers valuable lessons in creating environments that not only attract but also retain customers.

Embracing Digital Transformation

IKEA’s digital marketing strategy is a prime example of how a traditional retail brand can thrive in the digital age. At the heart of this strategy is a user-friendly website and mobile app, designed to provide a seamless online shopping experience. The website and app are intuitive and easy to navigate, allowing customers to browse products, read reviews, and make purchases with ease. High-quality images, detailed product descriptions, and comprehensive search functionalities ensure that customers can find exactly what they need quickly and efficiently. The integration of personalized recommendations and user-generated content further enhances the shopping experience, making it both efficient and enjoyable.

Incorporating cutting-edge technology, IKEA has embraced Augmented Reality (AR) to bridge the gap between online browsing and in-home visualization. The IKEA Place app allows users to virtually place furniture in their homes using AR. Customers can see how different pieces would look and fit in their actual living spaces, making it easier to make confident purchasing decisions. This innovative tool not only reduces the uncertainty often associated with buying furniture online but also enhances customer satisfaction by providing a highly interactive and personalized shopping experience.

IKEA’s robust social media presence plays a crucial role in its digital marketing strategy. By leveraging platforms like Instagram, Pinterest, and YouTube, IKEA engages with its audience through visually rich and inspiring content. Instagram showcases beautifully styled rooms and DIY projects, encouraging followers to share their own IKEA-inspired spaces. Pinterest is used to curate ideas and trends, making it a go-to resource for home décor inspiration. On YouTube, IKEA shares everything from product tutorials to sustainability initiatives, deepening the connection with its audience. These platforms not only drive engagement but also build a community of loyal customers who see IKEA as a source of inspiration and creativity.

Through a seamless blend of user-friendly digital tools, innovative technology, and engaging social media content, IKEA’s digital marketing strategy effectively reaches and resonates with a modern, tech-savvy audience. This approach not only enhances the customer experience but also ensures that IKEA remains at the forefront of the retail industry. For marketing professionals, IKEA’s digital strategy offers valuable insights into creating a cohesive and dynamic online presence that drives both engagement and sales.

Storytelling and Content Creation

IKEA’s content marketing strategy is a cornerstone of its brand communication, deeply rooted in providing value and inspiration to its audience. The iconic IKEA catalog, an annual publication, serves as both a marketing tool and a source of inspiration for millions of customers. This catalog is more than just a product showcase; it’s a carefully curated guide that tells a story of living spaces filled with IKEA products. Each page is designed to inspire creativity and offer practical solutions, allowing customers to envision how they can transform their own homes. The catalog’s widespread distribution ensures that IKEA remains top-of-mind for consumers planning their home decor and furnishings.

Inspirational content is another key element of IKEA’s content marketing strategy. The brand consistently produces and shares DIY projects, home decor tips, and sustainability stories across various platforms. DIY projects empower customers to personalize their spaces using IKEA products, fostering a sense of creativity and ownership. Home decor tips offer practical advice on styling and organizing, helping customers make the most of their living spaces. Sustainability stories highlight IKEA’s commitment to environmental responsibility, resonating with the growing segment of eco-conscious consumers. This content not only engages but also educates and inspires, reinforcing IKEA’s position as a leader in both style and sustainability.

Collaborations with influencers and designers extend IKEA’s reach to new and diverse audiences. By partnering with popular influencers and renowned designers, IKEA taps into their followers’ trust and admiration. These collaborations often result in unique and limited-edition collections that generate buzz and excitement. Influencers share their personal experiences with IKEA products, creating authentic and relatable content that resonates with their audience. These partnerships not only enhance brand visibility but also bring fresh perspectives and ideas to IKEA’s content, keeping it dynamic and relevant.

Through its catalog, inspirational content, and strategic collaborations, IKEA effectively engages its audience, builds community, and strengthens its brand identity. For marketing professionals, IKEA’s content marketing approach provides a compelling example of how to create meaningful and impactful connections with customers, ultimately driving brand loyalty and long-term success.

Commitment to Sustainability

IKEA’s commitment to sustainability and corporate social responsibility (CSR) is a fundamental aspect of its business strategy, reflecting its vision to create a better everyday life for the many people. Sustainable sourcing is at the heart of IKEA’s approach, with a strong emphasis on using renewable and recycled materials. The company ensures that wood, one of its primary materials, comes from responsibly managed forests. This commitment extends to other materials as well, such as cotton and plastic, which are increasingly sourced from sustainable or recycled origins. By prioritizing these practices, IKEA not only reduces its environmental impact but also sets an industry standard for sustainability.

Energy efficiency is another critical component of IKEA’s sustainability strategy. The company has made significant investments in renewable energy, aiming to become energy independent by producing as much renewable energy as it consumes. This includes installing solar panels on store rooftops and wind farms to power its operations. Additionally, IKEA continuously seeks ways to improve the energy efficiency of its products and operations, from LED lighting to innovative manufacturing processes. These efforts contribute to a reduction in greenhouse gas emissions and demonstrate IKEA’s leadership in sustainable business practices.

IKEA’s CSR initiatives extend beyond environmental sustainability to include substantial support for local communities and global causes. The IKEA Foundation, the company’s philanthropic arm, focuses on improving the lives of vulnerable children and families around the world. This includes supporting education, health, and housing initiatives in underserved regions. Locally, IKEA engages in various community projects, such as providing grants to small businesses, supporting refugee integration programs, and partnering with local charities. These initiatives reflect IKEA’s holistic approach to CSR, addressing both global challenges and local needs.

Through its sustainable sourcing, energy efficiency efforts, and community initiatives, IKEA showcases a comprehensive commitment to making a positive impact. This multifaceted approach not only enhances its corporate reputation but also resonates deeply with consumers who prioritize sustainability and social responsibility. For marketing professionals, IKEA’s CSR strategy offers valuable insights into building a brand that is not only successful but also ethical and socially conscious.

Building Customer Loyalty

IKEA’s approach to loyalty programs and customer retention is designed to foster long-term relationships and enhance the overall shopping experience. The IKEA Family program is central to this strategy, offering a range of benefits and personalized offers to its members. Free to join, the program provides exclusive discounts, special events, and early access to sales, making it highly attractive to customers. Members also receive tailored recommendations based on their shopping habits, creating a more personalized shopping experience. This program not only incentivizes repeat visits but also deepens the emotional connection between IKEA and its customers.

Customer feedback integration is another key element of IKEA’s retention strategy. The company actively seeks and listens to feedback from its customers to continually improve its products and services. This feedback is gathered through various channels, including surveys, social media, and direct customer interactions. By acting on this input, IKEA demonstrates its commitment to customer satisfaction and shows that it values their opinions. This iterative process of listening and improving helps to build trust and loyalty, as customers feel their voices are heard and their needs are addressed.

Post-purchase support is also a crucial factor in IKEA’s customer retention efforts. The company offers an easy returns policy that allows customers to return items within a specified period if they are not completely satisfied. This hassle-free process reassures customers that they can shop with confidence, knowing they have the flexibility to change their minds. Additionally, IKEA provides comprehensive customer support services, including detailed product instructions, assembly videos, and helplines for assistance. These services ensure that customers have a positive experience even after their purchase, fostering a sense of reliability and care.

By focusing on loyalty programs, customer feedback integration, and robust post-purchase support, IKEA successfully retains a loyal customer base. These strategies not only enhance customer satisfaction but also encourage repeat business, contributing to IKEA’s sustained success. For marketing professionals, IKEA’s approach offers valuable lessons in creating a customer-centric business model that prioritizes long-term relationships and continuous improvement.

Lessons from IKEA’s Marketing Strategy

Marketing professionals can glean several valuable lessons from IKEA’s marketing strategy , which has been instrumental in the company’s global success. Here are some key takeaways:

Consistent Brand Identity

IKEA’s unwavering commitment to its brand identity of simplicity, affordability, and functionality shows the importance of consistent messaging. Maintaining a clear and consistent brand identity helps build strong brand recognition and trust among consumers.

Democratic Design

IKEA’s principle of democratic design—balancing form, function, quality, sustainability, and low price—demonstrates the value of creating products that appeal to a broad audience. Ensuring that products are not only aesthetically pleasing but also practical and affordable can attract and retain a diverse customer base.

Innovative Product Strategies

The success of IKEA’s flat-pack furniture underscores the benefits of innovative product strategies. By offering easy-to-assemble products, IKEA reduces costs and enhances the customer experience. Innovation in product design can differentiate a brand in a competitive market.

Customer-Centric Shopping Experience

IKEA’s unique store layout, comprehensive in-store services, and realistic showrooms highlight the importance of creating an engaging and immersive shopping experience. Marketing professionals should focus on how to make the shopping process enjoyable and interactive to increase customer satisfaction and sales.

IKEA’s investment in a user-friendly website, mobile app, and AR tools like the IKEA Place app illustrates the significance of digital innovation. Leveraging technology to enhance the customer experience can drive online engagement and sales. Staying ahead with digital trends is crucial for modern marketing strategies.

Effective Use of Content Marketing

IKEA’s rich content marketing strategy, including its annual catalog, DIY projects, and inspirational home décor tips, demonstrates the power of content to engage and inspire customers. Producing high-quality, relevant content can build a strong connection with the audience and position the brand as an authority in its industry.

Leveraging Social Media

IKEA’s active presence on social media platforms like Instagram, Pinterest, and YouTube shows how these channels can be used to engage with customers and showcase products creatively. Effective social media marketing can amplify brand reach and foster community engagement.

Commitment to Sustainability and CSR

IKEA’s focus on sustainability and corporate social responsibility (CSR) highlights the importance of ethical business practices. Consumers increasingly prefer brands that are socially and environmentally responsible. Integrating sustainability into the core business strategy can enhance brand reputation and loyalty.

Robust Loyalty Programs

The IKEA Family loyalty program illustrates the benefits of offering exclusive perks and personalized offers to retain customers. Loyalty programs can drive repeat business and foster long-term customer relationships.

Continuous Improvement Through Feedback

IKEA’s integration of customer feedback into product and service improvements underscores the importance of listening to customers. Continually adapting to customer needs based on their feedback can improve satisfaction and build loyalty.

By adopting these lessons, marketing professionals can create more effective, customer-centric strategies that drive engagement, satisfaction, and long-term success.

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How IKEA Evolved Its Strategy While Keeping Its Culture Constant

If you’re leading your team through big changes, this episode is for you.

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The Swedish furniture maker IKEA found huge success producing quality furniture at affordable prices. But in 2017, the company was at a crossroads. Its beloved founder had died, and the exponential rise of online shopping posed a new challenge.

In this episode, Harvard Business School professors Juan Alcacer and Cynthia Montgomery break down how IKEA developed, selected, and embraced new strategic initiatives, while fortifying its internal culture. They studied how IKEA made big changes for the future and wrote a business case about it.

They explain how the company reworked its franchise agreements to ensure consistency among its global stores. They also discuss how IKEA balanced global growth with localization, developing all-new supply chains.

Key episode topics include: strategy, growth strategy, disruptive innovation, emerging markets, leadership transition, competitive strategy, company culture, succession.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

• Listen to the original HBR Cold Call episode: IKEA Navigates the Future While Staying True to Its Culture (2021)
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HANNAH BATES: Welcome to HBR On Strategy , case studies and conversations with the world’s top business and management experts, hand-selected to help you unlock new ways of doing business. The Swedish furniture maker IKEA found huge success producing quality furniture at affordable prices. But in 2017, they were at a crossroads. Their beloved founder had died, and the exponential rise of online shopping posed a new challenge. Today, we bring you a conversation about how to develop, select, and embrace a new strategic initiative – with Harvard Business School professors Juan Alcacer and Cynthia Montgomery. They studied how IKEA made big changes for the future while fortifying its internal culture and its external identity. In this episode, you’ll learn how the company reworked its franchise agreements to create a more managerial and modern culture, and ensure consistency among its global stores. You’ll also learn how they balanced global growth with localization – including new supply chains. This episode originally aired on Cold Call in June 2021. Here it is.

BRIAN KENNY: For some of the world’s most celebrated founders, the entrepreneurial drive kicks off at an early age. Mark Zuckerberg developed Facebook in his Harvard dorm room at the age of 18. Michael Dell made $200,000 upgrading computers in his first year of business, he was 19. Before Jack Dorsey founded Twitter, he created a dispatch routing platform for taxis in his hometown of St. Louis, while he was in middle school. But then there’s Ingvar Kamprad who began selling matches at the age of five to neighbors in his rural Swedish homestead. By the age of seven, he was buying matches in bulk in Stockholm and selling them at a profit back home. Ingvar learned early on that you can sell things at a low price and still make a good profit. A philosophy that fueled the success of his next business venture, IKEA. Today on Cold Call , we welcome professors, Juan Alcacer, and Cynthia Montgomery to discuss their case entitled, “What IKEA Do We Want?” I’m your host, Brian Kenny, and you’re listening to Cold Call on the HBR Presents network. Juan Alcacer’s research focuses on the international strategies of firms in the telecommunications industry and Cynthia Montgomery studies the unique roles leaders play in developing and implementing strategy. They are both members of the Strategy unit at Harvard Business School. And thank you both for joining me today. It’s great to have you on the show.

CYNTHIA MONTGOMERY: Thanks Brian.

JUAN ALCACER: Thank you for having us.

BRIAN KENNY: You’re both here for the first time, so we’ll try and make it painless so we can get you to come back on. I think people are going to love hearing about IKEA and getting an inside view. Most of us have had that experience of being like mice in a maze. When you go into an IKEA store, you are compelled to walk through the whole place. It’s really brilliant, so many of the touches and things that they’ve done. And this case helps to shine a light, I think, on some of those decisions and how they were made. I had no idea how old the company was. So just starting with its history, it’s going to be good to hear about that. Juan, I want you to start, if you could, by telling us what would your cold call be to start this case in the classroom?

JUAN ALCACER: I like to start the case, bringing in the emotions of the students and their relationship with IKEA. So most of our students have had some experience with IKEA. So I’d just start asking how many of you have been in IKEA, and then I’d start asking why? Why did you go to IKEA? And this time telling you all the things that you just mentioned, for instance, walking through the maze, going to eat the meatballs. So they started bringing all these small, decisions that were made through the years, that made IKEA, IKEA.

BRIAN KENNY: Who doesn’t love the meatballs? Cynthia, let me ask you, you’re both in the Strategy unit at Harvard Business School, there’s a lot of strategy underlying this whole case. I’m curious as to what made you decide to look at IKEA and sort of, how does it relate to your scholarship and the things that you think about; the questions you try to answer?

CYNTHIA MONTGOMERY: I’m really interested in the choices firms make about who they will be and why they will matter? The core questions at the identity of a company. In 1976 Kamprad laid out very, very carefully. What IKEA would do, who it would be. He identified its product range. The customers it would serve, the company’s pricing policy, all in a document called, The Testament of a Furniture Dealer. And he described it as, “the essence of our work.” And 45 years later, it was still required reading for all of the IKEA’s employees. It’s probably the most compelling statement of corporate purpose I’ve ever seen.

BRIAN KENNY: Remarkable in a company that’s based on furniture. It was a very, sort of powerful thing. There’s an exhibit in the case that shows the whole Testament. Maybe we can dig a little bit into the history here. I alluded to the fact that it’s been around for a long time. Cynthia, just tell us a little bit about how the company came to be and how it evolved over time.

CYNTHIA MONTGOMERY: IKEA started actually as a mail-order business in Sweden and in the late 1940s Kamprad noticed that despite a lot of demand for furniture, agreements between the furniture manufacturers and retailers were keeping furniture prices real high. He was interested in a different set of customers. And he decided that to attract farmers and working class customers, he needed to be able to offer quality furniture at lower prices.

BRIAN KENNY: What were some of the early challenges that they faced. I’m also curious a little bit about the Swedish culture and how that sort of factors in here. Because there was definitely undertones of that factoring into the way they set this up.

CYNTHIA MONTGOMERY: It’s a virtue to be frugal and to be very careful about how you spend your money. And that made a huge impression, particularly given his background, growing up on a farm for Kamprad, he decided he really wanted to lower the prices of furniture and began to do so. And it turned out that there was a very, very strong response from other furniture manufacturers who basically said that they were going to boycott him. They wouldn’t allow him into their furniture fairs, him personally, as well as his company. And so in turn, what happened was that they also pressured local suppliers not to sell to a IKEA anymore, basically trying to force him out of the market. And what happened was that that actually drove Kamprad to Poland as a source of supply because local firms wouldn’t supply him anymore. And in the process, he discovered that Polish manufacturers could actually make furniture at far, far lower costs than Swedish manufacturers. And that essentially gave IKEA a cost structure that was more like a difference in kind, than a difference in degree. And that proved enormously important to building almost insurmountable competitive advantage for IKEA.

BRIAN KENNY: He was also really keen with innovations early on that things like the restaurant area and the childcare space, what were some of the insights that drove him to make those kinds of decisions?

CYNTHIA MONTGOMERY: One of the things that he decided quite early on is that he wanted to have the stores located out of town. And the reason is because land there was much, much cheaper. So he built these ,as you described earlier, Brian, these gigantic stores on the outskirts of town and they had lots and lots of square footage and lots and lots of merchandise, but you know, it took time to get there. It took time to shop there and what he wanted to do was make it worth it for the customers to make the trip, worth it for them to spend a lot of time in the stores. So he decided to add restaurants and the now famous meatballs, which come in several flavors, actually around the world, and to add childcare centers that would care for young children while the parents shopped. On the low cost front, he was innovative in other ways, he actually borrowed the idea of flat pack from another innovator, but he’s the one that actually brought it to life in such a big way. Then he discovered that if you let the clients go in and pick off the furniture packs themselves, they could even save more money and lower the costs in the store.

BRIAN KENNY: So they have a pretty complicated org structure, when we start to dig into some of the nuance of the case. Juan, could you describe for us, how they’re set up from an org structure standpoint?

JUAN ALCACER: You have to realize that coming from Sweden, which is one of the countries with the highest taxation for corporations in the world. So early on, they decided to find some organization structure and legal structure that would allow them to lower taxes. And that created basically an ownership based on foundations, based in the Netherlands. And they decided, early on, to separate the company into pieces. One is the franchise store, which is basically running the brand and running the management image of the brand. And then the operational part of the company, which is a franchisee. And for many years, those two things were separated. The franchisee was also in charge of manufacturing and so forth. So it was a very strange structure, that was put in place in part by the charisma and the leadership style of Ingvar Kamprad. If I can go back to your question about the Swedish culture. One of the things that, at least for me, is very striking is that when you look at multinationals, there’s a thing called the liability of being a foreigner, which means that when you go to another country, you have some disadvantages. And you try to mitigate that liability of being a foreigner, by pretending to be of that particular country. IKEA went with a totally different approach, they’re totally Swedish. Names of their products are impossible to pronounce. The fact that they have meatballs, they have their Swedish flags all over the place. They embrace the Swedish spirit as a part of the brand. You don’t see many multinationals with that. That makes IKEA what it is today.

BRIAN KENNY: I definitely think that’s part of the appeal here in the US, for sure, is people being exposed to the Swedish culture in a way they never had before. What is the culture of the company like, what’s it like to work there?

JUAN ALCACER: We went to both the Netherlands and to Sweden and we had a great time. It’s a very egalitarian culture. All the VP’s, high-level managers, none of them have an assistant. Only the CEO has an assistant. They don’t have offices, so everybody shares an open space. The whole place is decorated with IKEA furniture, everybody talks to each other by their first name. It’s very collegial, very friendly.

CYNTHIA MONTGOMERY: I would add to that. I think IKEA was incredibly generous to us, in the sense that they shared all kinds of confidential, internal documents and were really willing to talk in a very open and forthright way, about both their strengths and their challenges, which was incredibly refreshing. And as Juan said, that it was very egalitarian, and not surprisingly IKEA was one of the first companies to embrace democratic design. And that spirit was everywhere in the company.

BRIAN KENNY: Cynthia, what would you say are some of the keys to their success over the years?

CYNTHIA MONTGOMERY: I’d say that IKEA basically picked a lane and stuck with it. They had clarified, as I said at the top of the show, very, very carefully about what they wanted to do, who they wanted to be. And what they said is, look, this is what we’re going to be about. We’re going to offer an extensive range of practical, well-designed furnishings at low prices. And we’re going to serve the many, not the few. And the many are those with limited financial resources. When you have such clarity about what you want to do, then you can set out and try to maximize how you approach that. Essentially IKEA built a system, to do exactly that, extremely well and their distinctiveness made them truly an iconic firm. And it’s great when you talk with students about, what’s the purpose of your business?, What are you doing? What’s interesting is that oftentimes they can describe much more carefully what IKEA is doing, than what their own businesses doing. The last thing I would add, is that as Juan one said, they’re really synonymous with Sweden and they put that right out there. It’s almost like the way that Coca-Cola is synonymous with the US. And that has been a big part of their advantage.

BRIAN KENNY: Okay. So we’ve painted a very rosy picture for IKEA, but it’s an HBS case. So there’s tension, inevitably. So let’s dig in a little bit to where the case brings us. I’m going to mispronounce his name. I hope I don’t, but Torbjörn Lööf is that close?

CYNTHIA MONTGOMERY: Yeah.

BRIAN KENNY: He is the protagonist in the case. And he is stepping into a leadership role here really after an iconic leader has stepped back and that’s a challenge. Any time that happens, and a leader has to step in. And as he starts to sort of peek underneath the hood a little bit, he starts to see some of the challenges that IKEA is facing in this now seventh decade, I guess, of their existence. So Juan, maybe you can set that up for us a little bit.

JUAN ALCACER: It’s not only that he is stepping in the shadow of a leader that created the company. It’s that the company is still controlled by the family. So this is not a public firm, this is a private firm. So, he had to basically walk a very, very thin line, trying to take IKEA towards the future, but still preserving the past. And he had basically two main tasks, one is short term, that organization restructure that we were talking about, that was very complicated was created products. As I said before, the franchisee, which is basically the one that was running all the operations, was also the manufacturer. But there were other franchises. So for instance, the operations in Middle East are run by another company. So they wanted to create a system of transparency, that all the franchises are run the same way. When you have a franchisee that has basically represented 80% of your sales, and the ones that are representing 2% or 3%, there is an imbalance of power. So they tried to create a structure that is more managerial, that is more modern, that will allow to create incentives for new franchisees to come into the system. So that transaction was basically transferring production and transferring the functions that were in the franchisee back to the franchisor. There were 25,000 people that have to move from one place to another.

BRIAN KENNY: Wow.

JUAN ALCACER: They didn’t move physically, but in terms of the legal status they shift around. And the second is to bring IKEA to the world. What they observed is that there were some changes in demographics, they were targeting the low-income, what they call the thin wallets of the world, but it turned out that people that would go to IKEA are not thin wallets anymore. These people have already moved towards the middle-class and they also have this whole, to increase the number of consumers to three billion, and that meant that they have to basically grow globally, at a rate that they have never done, before they had two or three markets, like China and India. They also have the issue of eCommerce, to pick up and every retailer in the world is dealing with that. So, it’s two steps. One, getting the house in order, and second one, creating a path for the future for IKEA to become an icon for the next 75 years.

BRIAN KENNY: Yeah. And I also think at some level it’s hard to sustain that original mission that they set out with, when you’re trying to expand so rapidly and bring in a much larger audience. Cynthia, I don’t know if you have other observations about these changes they were facing.

CYNTHIA MONTGOMERY: Absolutely. Because one thing is that you can look at the challenges that came from expanding into new geographies. But the other thing that they found in a large study that they did, is that there were challenges in their core business as well, that the countries they’d been in for a number of years, and what I’ll call the big blue box stores, mostly in developed countries. What they found is that increasingly many of their customers in those markets wanted new conveniences. They wanted stores that were located closer to city centers because a number of people say in their late twenties, early thirties are not driving and don’t have cars. And they found that there was an increasing demand for delivery and assembly services for shopping online. These trends are worrying to a huge number of retailers, but particularly a challenge to IKEA because low price, low, low price, so low that that people can recognize the difference. That being at the heart of their strategy. And customers’ willingness to spend time getting to the store, hauling furniture about, ultimately assembling it. Those are at the very, very heart of their low-cost strategy and their very distinctive value proposition. It was a big challenge within the developed markets as well.

BRIAN KENNY: And depending on where they went in the world, a different set of challenges pops up almost everywhere. Juan, you mentioned earlier that they pushed back against localization, but is that a sustainable strategy? When you’re trying to go into entirely new markets like China and India.

JUAN ALCACER: The beauty of IKEA is that they found a segment across different cultures that was very similar. College students the United States, that needed to have furniture for a few years only, it could be young couples that are opening a new house, in some places it’s immigrants that are moving from one country to another country that need to buy furniture, but they don’t have the money to do so. So there was this very common segment across the world that they were able to then define, that allows them to have basically 80% of their line, of their range, is common across countries. And they have around 10% to 20% that varies by country. Now, when they go to China, and they go to India, they find that the changes have to be of a higher scale for three reasons. One, the tastes are different, also the materials, when you are going to India and you are going to houses that are in a high humidity environment, the type of wood that you can use is different. Now you start, not only changing the look of the product but you also have to change how you made it. And the third big challenge is when you look at what is defined as thin wallet, in these markets, is really thin. It’s not thin wallet in Sweden, it’s not thin wallet in the United States. So, you have to go to prices that are really, really low. And that means that you are already a low cost producer but you have to go even lower. That means that you have to change your supplier, so it starts changing the fundamental parts of the business model that they created through the years.

BRIAN KENNY: And it could probably, pretty easily, get away from you. So this does call for a strategy. Cynthia, can you describe for us what the three roads forward are? This was sort of underpinned their strategy going forward and how they were going to deal with some of these challenges.

CYNTHIA MONTGOMERY: Basically, the three roads, the first was affordability, as Juan said, this isn’t affordability in the way that they, at the level at which they’ve traditionally thought about it. This is affordability for wallets that are either very thin or actually where the willingness to pay just isn’t as high, because they’re accustomed to having goods that are at very low prices. So they wanted to attack affordability for people who could not afford IKEA today. They cared a lot about accessibility. They’ve got to reach and interact with people where they are. And the last is sustainability, and they felt really, really strongly about this. And I think much in line with what you see with a number of other countries in Europe, that they cared a lot about the sustainability of the products and wanted to make a positive impact for people, society and the planet. And they’re taking on all three of these aspirations at once.

BRIAN KENNY: You have written many cases, I’m sure that parallel this, what are some other firms that have faced similar challenges and maybe figured out a way to deal with the same sets of challenges?

JUAN ALCACER: The challenge of going overseas, we didn’t write cases about multinationals for many years. They always have this tension between coordination in headquarters and adaptability in each one of the subsidiaries. So IKEA was very good at playing that game for many, many years. In a way they were going to countries that were somehow similar to Sweden. Now that they are venturing to countries that are farther away in many dimensions, not only physically, but also in terms of economic distribution, in terms of taste. They are seeing this tension to be amplified. We have seen that in many companies, Procter and Gamble has been doing that for years and years, Unilever has been doing that for years and years. IKEA has done it for 75 years. They went overseas very early on. But now the challenge is a little bit higher. The other challenge is that Cynthia also mentioned, which is basically adapting to new technologies and new demographics. Every retailer is facing that. Any supermarket, any chain that has been selling in brick and mortar is facing those challenges. So, what is interesting about IKEA is that they are facing these all at the same time and they’re facing this during the process of transition from the leader that created the company to a new set of managers that are more professional and are not part of the family.

BRIAN KENNY: You mentioned technology. I’m just curious, the role that the internet plays in this, because now everybody can see, you know, through YouTube and other things, what the experience is like from one place to the other, and how important is consistency across all those geographies, versus a little bit of localization to make it feel a little bit more like this is the China version of IKEA versus the European version of IKEA. Cynthia, do you have thoughts on that?

CYNTHIA MONTGOMERY: That’s the real challenge here in the sense that, how do you take this whole model that has been developed over so many years? And it’s very, very hard to imitate, which has given them a lot of strength over the years, but when the environment changes, instead of responding in a piecemeal way to all kinds of external stimuli, it’s how do you take this whole model and evolve it in some coherent way that stays true to the iconic sense of who IKEA is? I really see it fundamentally, as an existential question for IKEA.

BRIAN KENNY: Such a great point. Look, I want to thank both of you. This has been a really interesting discussion about a brand that we all know and have experienced many times firsthand. I have one more question for each of you before we part ways. And that would be if there’s one thing you want people to take away from this case, what would it be? Juan, let’s start with you.

JUAN ALCACER: What I would like listeners to take from this, is we have this mentality of growth, growth, growth, and expanding and doing different things, and when you look at IKEA, you have to wonder, is it better that IKEA stays doing what they do well, or do they have to keep growing and entering all these markets and adapt to overseas. We have this basic assumption that growth at any cost should be the goal. I would like the listeners, when they look at the case and think about the cases, to question that very basic assumption.

BRIAN KENNY: Cynthia?

CYNTHIA MONTGOMERY: One of the things about IKEA that I think it’s really, really important to know is that they really brought something different to the world and they did it in a very compelling way. So at the heart, to do something that’s distinctive, that adds value. It comes through really strong in the IKEA story. At the same time, when the environment changes, how do you evolve, is really challenging. And so the fact that they’re being so open in how they’re confronting this, I think there’s a lot to learn there. It’s a challenge. I think it’s really important to remember what’s at the heart of this company, is that they’re really bringing something that’s very unique and they need to continue to do that.

BRIAN KENNY: Juan Alcacer, Cynthia Montgomery, thank you so much for joining me. The case is called, “What IKEA do we want?” Thanks again.

JUAN ALCACER: Thank you.

HANNAH BATES: You just heard Harvard Business School professors Juan Alcacer and Cynthia Montgomery in conversation with Brian Kenny on Cold Call .  We’ll be back next Wednesday with another hand-picked conversation about business strategy from the Harvard Business Review. If you found this episode helpful, share it with your friends and colleagues, and follow our show on Apple Podcasts, Spotify, or wherever you get your podcasts. While you’re there, be sure to leave us a review. We’re a production of the Harvard Business Review. If you want more podcasts, articles, case studies, books, and videos like this, find it all at HBR dot org. This episode was produced by Anne Saini, and me, Hannah Bates. Ian Fox is our editor. Special thanks to Maureen Hoch, Adi Ignatius, Karen Player, Ramsey Khabbaz, Nicole Smith, Anne Bartholomew, and you – our listener. See you next week.

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How IKEA became a household name with digitalization, consistency, and experience

Table of contents, in the beginning....

Just about 80 years after it was founded, IKEA has become one of the world’s top furniture companies. Today, it’s known as a place where shopping is truly an experience, not just a chore. Between the popular food courts and handsomely designed showrooms, IKEA is simply a fun place to spend an afternoon — and be productive at the same time. 

Of course, the company wouldn’t still be in business if it wasn’t able to provide great products as well. Throughout the years, IKEA has carved out a name for itself as a company that provides unique and high-quality furniture at a great price — some assembly required. As a result, it’s particularly popular among young and thrifty shoppers. 

Here’s what the company’s numbers look like at a glance:

• In 2020, IKEA’s brand value was $17.97 billion
• By 2020, it had opened 445 stores worldwide
• It was the leading retail furniture company in Europe by turnover in 2019 ( €16.9 billion generated )
• Nearly 220,000 employees in 2020
• Over 800 million customers visited an IKEA in the US despite the pandemic
• Stores in over 50 global markets

📹 Prefer to watch? Explore IKEA's strategic journey in our podcast episode, where Laura Blackmore breaks down their innovative strategies, unique selling points, and global market adaptations.

In this strategy study, we’re going to explain how IKEA became not only one of the world’s leading retail furniture brands, but a global cultural icon. From rural Sweden to the global marketplace, this is the story of IKEA’s rise.

The vast majority of people alive today have never lived in a world without IKEA. In fact, many of us have fond childhood memories of walking through one of its stores with our parents and enjoying some tasty Swedish meatballs before heading home.  

But IKEA didn’t appear spontaneously. It was brought into existence thanks to the hard labor and ingenuity of one man: Ingvar Kamprad. To understand IKEA’s success, we need to understand the man behind it.

The founder's first steps

Ingvar Kamprad was born in 1926 in Angunarryd, a small town in the Småland province of southern Sweden. Heir to a poor family of farmers, Ingvar was surrounded by financial insecurity and quickly learned the value of money and hard work. 

From an early age, Kamprad exhibited an entrepreneurial spirit. By the time he turned six, he had already started his first business selling matches, buying them on the cheap in Stockholm and selling them at a profit in his hometown. Two years later, he moved into the vehicle business, selling bicycles to his neighbors. As he grew older, his enterprises moved into various different products, ranging from Christmas tree decorations to fish to seeds and beyond. 

When Kamprad turned 17, his father made good on a promise to provide him with money if he succeeded in his schoolwork. He used that money to found what we now know as IKEA.

Kamprad founded IKEA while sitting at his uncle Ernst’s kitchen table in 1943, deriving the name from his own (Ingvar Kamprad), his family farm’s (Elmtaryd), and his hometown’s (Angunarryd). 

At the start, IKEA was not a furniture business. Instead, Kamprad sold small household goods, such as pens and wallets, which customers ordered through a mail-in catalog and would receive via milk truck delivery. This catalog was an essential feature of Kamprad’s business, as his rural location made it difficult to conduct business any other way. 

It wouldn’t be until 1948, five years later, that Kamprad would get into the furniture business and begin shaping IKEA into what we know it as today.

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Necessity breeds innovation

Although many people imagine that businesses always start out with their unique selling propositions fully formed, this could not be further from the truth. IKEA is a perfect example of a company that grew into its own, finding its way not through some clear vision at the outset but through many small “aha” moments that shaped it into its current form. In fact, many of the features that we recognize IKEA by today came completely in response to difficulties — they were creative solutions to the problems Kamprad faced. 

Right out of the gates, IKEA made a name for itself as a retailer with extremely low prices.  In 1951, it launched its first catalog, which offered low-cost, chic, and stylish furniture with the convenience of mail-order shopping.

As appealing as budget-friendly options may be, they also raised concerns: customers simply couldn’t believe that quality furniture could be had at such a bargain. As a result, they began to worry about IKEA’s quality. 

To solve this, Kamprad came up with a solution: set up a showroom. Now, customers could come into his store, look at the furniture themselves, and walk away with it. Problem solved. 

But this wasn’t the end of IKEA’s pricing struggles. Although the consumers had been pacified, the producers were still unhappy — but for an entirely different reason. In 1955, the producers that IKEA used started boycotting the business, claiming the prices were too low.  Instead of viewing this as an insurmountable problem, Kamprad took it as an opportunity to bring manufacturing in-house.

The last major innovation came as a bit of a happy accident one year later in 1956. One day, as Kamprad watched an employee load up a customer’s table into their car, he noticed something interesting: the employee had removed the table’s legs to help it fit. 

Then it hit him: if Kamprad sold his furniture disassembled, he could fit more of it into a single truckload, thus saving money on shipping costs. Instead of trying to fit fully-assembled tables together, leaving tons of empty space in the truck, he could pack everything flat. 

This “aha” moment gave IKEA what is perhaps its most recognizable feature — it became a retailer of furniture that required assembly at home, thus making it cheaper, easier to carry out of the store, more efficient for delivery, and rather fun to set up.  Although flatpack furniture already existed, it wasn’t yet popular in Sweden. This observation showed Kamprad an untapped market opportunity. 

By the time IKEA had pivoted to flat-packing, it had achieved several milestones: it now manufactured all its own products, it ran its own showrooms, and it provided high-quality, low-cost products that appealed to young people. At this point, IKEA had stepped into its modern skin.

Key takeaway #1: limitations boost creativity

IKEA didn’t emerge from Kamprad’s kitchen as a fully-formed entity. Quite the opposite: the first thirteen years of operations were an experimental period during which Kamprad sought out solutions to the problems that confronted him.

IKEA’s development wasn’t visionary but reactionary. Although Kamprad always envisioned IKEA as a company that sold high-quality, low-priced products with mass appeal, it was the sum of Kamprad’s clever solutions over time, such as shipping disassembled furniture to save on packing space, that shaped IKEA into what it is today. 

All great businesses are essentially solutions to difficult problems. When faced with a seemingly intractable issue, business leaders should view it as an opportunity for growth, not as a disruption to their normal operations. For all you know, that nagging problem could be what turns you into the world’s next IKEA.

IKEA goes global

From the beginning, international expansion has been a cornerstone of IKEA’s growth strategy. And if you think about it for a minute, it makes a lot of sense: Sweden is a small country with a population of only 10 million. That imposes a pretty low ceiling as far as business growth is concerned. 

Ingvar Kamprad knew that if he wanted to grow his company, he would need to go beyond Sweden’s borders. But unlike many other brands (Walmart and Home Depot, to name a few), he actually succeeded in his internationalization project. In 2018, IKEA had company-owned stores in 24 countries and franchises in many more. Currently, there are over 50 IKEA locations around the world, and the company is continuing to expand. 

Let’s take a look at what made IKEA’s globalization so successful.

Patience is a virtue: starting local

At the start, IKEA threaded lightly. Although international expansion was clearly a goal from the start, as indicated by Kamprad’s maxim “it is our duty to expand,” IKEA didn’t come out with guns blazing. Its first expansion efforts were within markets it already fully understood: its neighboring Scandinavian countries. 

The first international IKEA branches were in Norway (1963) and Denmark (1969). Just going by the dates alone, it’s clear that this was by no means a rapid expansion. Kamprad took things slow, making sure to firmly establish his business in the local market. 

By 1973, Kamprad was positioned well: he had opened up stores in all three Scandinavian countries, and he had captured 15% of the Swedish market share. He was ready for his next step. 

Going continental

In 1973, Kamprad decided to take IKEA beyond the borders of snowy Scandinavia and into the broader international market. 

At the time, the German-speaking countries had the largest furniture markets. And beyond that, they were fragmented: 67% of furniture companies had fewer than three employees and were in expensive locations, meaning that there was a gap in the market for non-boutique, affordable furniture. Kamprad believed that “if it works in Switzerland, it’ll work anywhere,” and chose the quiet country as his next stop on the continent.

Kamprad selected a small suburb outside of Zurich, called Spreitenbach, as his entry point. This small area accounted for 20% of the consumer purchasing power, so was a logical choice. To promote the new store, he circulated 500,000 catalogs filled with off-beat advertising. Within a year, he had 650,000 visitors. The store was a smashing success. 

A year later, Kamprad opened a store in Munich, West Germany, that attracted 37,000 visitors in just the first three days. Over the next five years, IKEA conquered a 50% share in the German cash-and-carry market. To this day, IKEAs biggest market is Germany, where it has 53 stores. 

Although there was opposition from more traditional furniture retailers (and even some court-mandated penalties), by this point it was becoming clear to everyone in the industry that IKEA had something special. The model was here to stay, and competitors needed to start taking notes. 

Learning from your mistakes: IKEA's "secret' formula

From 1973 onwards, IKEA began to expand at a much more rapid pace. But it hit a snag: in 1974, IKEA entered the Japanese market. Although it stayed around for 12 years before closing down, the entry was ultimately a failure. 

What went wrong? At the time, IKEA thought it could export its current business model wholesale without making any changes to fit the culture it was expanding into. Japan had a very service-oriented culture, and the people didn’t take well to the do-it-yourself attitude that IKEA was offering. But IKEA was also not a fit with the Japanese market on a much more literal level: its products simply weren’t compatible with the size of the average Japanese home. 

Luckily, IKEA was able to learn from its mistakes. After its Japanese fiasco, the company began tailoring its expansions to the market much more thoroughly. In its 1985 US expansion, for example, it ensured that its products matched up with the sizes that Americans would expect. In its recent 2018 entry into the Indian market, it made sure to set up customer service booths, where employees can help customers build their products — an important feature given that India, like Japan, does not have a strong DIY culture. 

In an almost literary redemption story, IKEA re-entered the Japanese market in 2006. Its newer stores implemented features that meshed better with Japanese culture, such as assembly assistance, delivery, and of course: products that were hand-selected to fit Japanese homes.

By all measures, IKEA’s return to Japan was a success (as of 2020, there were nine stores across the country) and gives clear proof that not only has the company learned from its mistakes, but it has developed a truly mature expansion strategy. 

Key takeaway #2: learn from your mistakes and the customer is always right

Some of IKEA’s initial expansion efforts failed because the company was a bit stubborn — Kamprad believed that what worked in Europe should translate directly into every market.

This was a huge mistake. Within twelve years, IKEA’s first expansion into a non-European market had failed. But this failure wasn’t without its lessons. 

Japan taught Kamprad that his products needed to fit the customer, not the other way around. While he didn’t upend IKEA entirely to fit into new markets, he did make small but necessary changes that would help the stores integrate better into different cultures. 

On a conceptual level, business leaders should realize that every mistake is a learning opportunity. Although Japan started out as a failure, without this mistake under Kamprad’s belt, he likely wouldn’t have been able to catch his missteps, and he may never have learned how to successfully expand into foreign markets. 

On a more concrete level, the key takeaway here is that the same market entry strategy won’t work across the board. 

Ikea growth strategy

There are a lot of reasons why IKEA was able to make the global impact that it has — a talented founder at the helm, a successful market entry strategy, and an ingenious business model are just a few. 

But there’s something else that has helped IKEA climb the ranks and become one of Sweden’s largest cultural and business exports: differentiation. IKEA’s differentiation strategy can be divided into three prongs: 

• Swedish Design and Influence
• Cost leadership
• Unique experience

The sum of these three parts is a company that offers a unique and appealing product at a low cost and with a unique shopping and assembly experience. Let’s take a look at how IKEA was able to build a name for itself and stand out from the crowd. 

Swedish design

Today, Swedish design has become synonymous with sleek, minimalist, and aesthetically appealing furniture and interiors. Of course, IKEA didn’t invent the style itself —  its pioneers were the likes of Bruno Mathsson and Astrid Sampe. But even though Ingvar Kamprad wasn’t the mastermind behind Swedish design, it’s undeniable that his company helped bring the style to a worldwide audience. 

However, like most parts of IKEA’s development, its design language didn’t come out of the womb fully formed. In the early days, IKEA’s furniture offerings were fairly conventional — a far cry from the eccentric shapes and unusual colors it would later employ. At that time, IKEA differentiated itself primarily from a cost leadership and convenience standpoint. 

That said, even in 1954, the beginnings of IKEA’s signature designs were taking form. That year, the Lovet table,  one of IKEA’s most well-known designs, was introduced. The wood table was crafted to look like a leaf, giving it an eye-catching and aesthetically pleasing appeal. It also happened to be the first of IKEA’s flatpack offerings. 

By the 1970s, IKEA had truly entered its own, offering furniture that looked unlike almost anything on the market — at least at the same price point. Many of the pieces released during that time are still popular today, such as the classic Poäng chair. 

Swedish flair

But looking at the design of the furniture itself doesn’t tell the whole story. IKEA built up a brand aesthetic that exudes Swedishness in everything from the names to its logo, which uses the Swedish flag’s colors. 

Take IKEA’s product names as an example. Although the company learned that it needs to alter its catalog a bit for every new market it enters, one thing stays the same in every country: the names. Outside of Scandinavia, practically no one can pronounce them, but that’s part of their appeal — strange and alien-looking names like Poäng, Ektorp, and Famnig are intriguing and stand out from competitor offerings. 

There’s a good reason for those exotic names. Apparently, Kamprad struggled with dyslexia and decided to name the furniture after Swedish towns and villages, humans, and other applicable Swedish names. 

Ektorp sofa is named after a village just outside Stockholm

IKEA’s shift to Swedish branding evolved as it expanded into foreign markets. This makes sense — the exotic appeal of the Swedish language doesn’t have the same effect in Sweden. This development can be seen especially clearly in its logo design.

Originally, the IKEA logo was quite bland. In 1951, it was nothing but a reddish stamp with the name “ikea” stamped in the middle:

In 1967, IKEA’s logo almost entered its final form: a circumscribed name in capital letters with a rectangle surrounding it. 

Finally, in 1983, as IKEA was making significant advantages in its globalization effort and close to opening its first US store, it hit on the right design: the familiar gold and yellow logo.

If you’ve ever seen a Swedish flag, it’s clear where the logo takes its inspiration from. With this move, IKEA made it clear that it was a Swedish company, and that foreign flair helped differentiate it.

But there were still a few final touches that needed to be added. In 1985, when IKEA opened its first US store, it also launched the iconic Swedish meatballs, aka Kottbullär. Although the IKEA restaurant had been a feature of the store from the beginning (Kamprad firmly believed that “it’s tough to do business with hungry stomachs”), it was at this point that the menu took an even more decidedly Swedish turn. 

Swedish food became so important to IKEA’s brand image that nowadays, the last thing you see as you exit the store are bottles of lingonberry jam and Kottbullär available for purchase. 

Cost leadership and the "IKEA effect"

From the very start, IKEA was envisioned as a brand that would provide budget-friendly products to the masses. Although those products changed over time from small household goods to furniture, the mission statement stayed the same. 

In the end, IKEA succeeded in its mission. Today, IKEA is the go-to brand for young people in need of cheap furniture for their first houses and apartments — and frugal people of all ages aren’t shy to walk through IKEA’s doors either. 

Flat-pack and modularity

So, how exactly was IKEA able to keep its costs so low? For the most part, it comes down to IKEA’s reliance on self-assembled and flat-packed products. In the early days, IKEA sold fully-assembled furniture. It wasn’t until 1954 that Kamprad got the idea to pivot to flat-packed goods. 

This change provided several advantages. Obviously, it made shipping and transportation costs lower — with flat-packed goods, more products can be loaded up into a single delivery truck. Along the same lines, it also saved money on the manufacturing end because IKEA could essentially “outsource” the assembly work to its customers. 

But there was another advantage that came from this move: modularity. By requiring customers to assemble their products, IKEA can manufacture modular pieces that fit several different furniture items. This means that production lines can be streamlined and made more efficient. 

Similarly, by removing the assembly from the picture, IKEA also needs to hire fewer service employees, which saves on employee compensation costs. Although IKEA has begun adding more service centers in markets that don’t have a mature DIY culture, these costs are minimal compared to the expense of fully-fledged service initiatives.

The IKEA effect

This unique business model has a surprising and somewhat paradoxical side effect, commonly referred to as the “IKEA Effect,” which allows IKEA to make its products appear more valuable than they are. 

The principle behind the IKEA Effect is simple: people value things that they build themselves more than things that are built for them. There is a certain satisfaction that comes from spending an hour building your own sofa that simply can’t be had if you buy one pre-assembled. Doing the work yourself gives you a better appreciation of the value, and since people tend to think quite highly of their own craftsmanship, they will tend to view the furniture as well-made. 

This helps IKEA with a cost leadership sleight of hand: by asking customers to assemble their own furniture, they can keep their own costs low, while simultaneously making their customers view their products as higher-quality and more valuable.

A variety of strong and consistent production relationships

While many low-price retailers attempt to keep production costs low by pitting suppliers against each other and selecting the most competitive price offerings, IKEA takes the opposite approach. Instead of fostering competition among the suppliers it works with, it opts for collaboration. 

IKEA keeps production costs low by signing long-term contracts with its suppliers. The result is that IKEA is able to keep its costs low consistently, instead of constantly scrambling to find the lowest cost supplier. 

The strategy appears to work. IKEA has more than 1,800 suppliers in 50 countries , and it consistently has more than 95% of its inventory in stock. 

Additionally, IKEA does its best to source its wood close to its suppliers in order to keep transportation costs down. For example, in 2018, IKEA bought 25,000 acres of timberland in the US to provide raw materials to its suppliers. This also helps with the company’s sustainability initiatives. 

A unique and cost-saving experience

Although IKEA originally started as a primarily mail-order retailer, the showroom experience has become an integral part of the company’s branding and operations. It’s a devilishly clever strategy because, like the IKEA effect, it keeps business-side costs low while simultaneously providing a high-quality shopping experience to customers. 

If you’ve ever been to an IKEA, you’ll recognize one thing immediately: these stores are big. They are essentially repackaged warehouses. Within the store, customers are presented with realistic representations of how each furniture item might be used in a contemporary living situation. The displays are not sterile lineups — they feel alive, livable, and customers can easily see the functionality of each item.

To make the shopping experience even more pleasant, IKEA provides play areas for children and eating areas for hungry shoppers. The end result is a store that feels homey and comfortable despite the industrial scale. 

Although this may all seem entirely in service of the customer, it also confers several cost-saving benefits to IKEA. 

For one, IKEA specifically places its stores in more domestic areas, where real estate prices are lower and the stores can be more expensive. This saves the company from having to spend top dollar for competitive retail space in a large city. 

Secondly, by making stores so large, they can effectively function as both a warehouse and a showroom. As a result, IKEA can combine warehouse and showroom expenses into one, keeping total costs low. Of course, the fact that IKEA products are flat-packed also means that more products can be stored per warehouse, further reducing storage expenses.

Thirdly, the huge amount of space allows IKEA to present many different design possibilities to customers without the need for large numbers of staff to constantly rearrange furniture for shoppers.  

Overall, the end result is that the unique IKEA showrooms provide customers with an enjoyable shopping experience, all while allowing the company to save on real estate, warehousing, and staffing expenses. 

Key takeaway #3: valuable doesn't mean expensive 

When we think of something valuable, we tend to think of something expensive: gold watches, luxury cars, rare jewelry. But not all value can be measured in dollar bills: to a parent, their child’s drawing could be more valuable than the Mona Lisa. 

IKEA was able to leverage this phenomenon by offering what is essentially “low-cost value” — the type of value that money can’t buy. Thanks to the IKEA effect, customers often find IKEA products to be more valuable to them than other, higher-priced products. Add on a unique experience, filled with memories of eating Swedish meatballs with your family, and you have a value that money can’t touch. 

After all, it’s a part of their vision “To create a better everyday life for the many people.”

Business leaders should follow in IKEA’s footsteps and look for new ways to increase their products’ or services’ worth without raising costs. Sometimes, small changes can lead to big results. 

Understanding IKEA's positioning 

From its humble beginnings in small-town Sweden to its current seat as a major player in the global retail market, IKEA has been nothing short of a Cinderella story. But no business can rest on its laurels — the market is constantly changing, and a single bad move could throw away 80 years of success in a flash. 

That said, the future does look bright for IKEA — even during the pandemic, the company was able to generate almost the same amount of revenue as the previous year ( €39.6 billion in FY2020 and €41.3 billion in FY2019). But a few figures don’t tell the full story. To get a better view, let’s dive into a SWOT analysis. 

Market understanding

If there is one thing that IKEA does well, it’s understanding its market and leveraging that understanding to better position itself. From the start, IKEA has had the goal of becoming a company that sold low-priced products that would appeal to mass-market consumers. Today, IKEA has become practically the world leader in budget furniture — it is the first place that the average Joe will go when searching for new furnishings. It is particularly popular amongst young people furnishing their first apartments and houses. 

Throughout its development, IKEA had ample opportunity to stray from this initial vision, but it never has. As a result, it’s carved out an important part of the market that it can expect to hold onto for years to come. 

Affordability 

IKEA doesn’t merely understand what its target market is, it’s able to corner that market. Through the various cost leadership strategies we discussed in Chapter #3, IKEA is able to consistently price its products cheaper than its competitors. In turn, this has made IKEA the go-to brand for budget-friendly furniture. 

Quality and value

Although IKEA surely isn’t top-of-the-line, its products retain a respectable level of quality despite being priced so low. This is largely thanks to IKEA’s strong relationships with its suppliers and the culture of collaboration it fosters with them. 

Any quality deficits that IKEA products may have been made up for by the IKEA Effect, which causes self-assembled products to take on a higher apparent value in the eyes of the builder. 

Unique brand experience

From the unique furniture designs to the use of Swedish names to the beloved in-store restaurants and beyond, IKEA has crafted a brand experience that is unlike any other. In fact, what IKEA has created is so special that in some countries, it’s known as a fun place to go and get a bite to eat than as a place to buy furniture. When you’re able to turn a boring old furniture store into a cool place to hang out with your friends, you know you’ve done something right. 

Brand recognition

Across the world, people instantly recognize the IKEA name and its bold yellow-and-blue logo. Without a doubt, IKEA is a household name, and that level of recognition is rare. To put things into more quantifiable terms, in 2020, the IKEA brand was worth almost $18 billion . This level of brand recognition means that IKEA is ingrained in the global culture as the first stop for affordable furniture. 

Optimized and efficient supply chain 

Unlike many companies vying for cost leadership, IKEA refuses to force its suppliers to compete with each other. Instead, it opts for a more collaborative approach, which leads to strong relationships and consistently low pricing in the long term. Additionally, having control of some of the raw material supply chain helps keep IKEA in a strong position.

Weaknesses 

Lower quality than competitors .

IKEA’s products could accurately be described as “good but not great.” Although the company makes products that are at an acceptable and functional standard, they can’t compete with high-end furniture manufacturers and dealers.

However, this weakness is mitigated by the fact that IKEA isn’t trying to compete with luxury furniture providers. Instead, they have focused on cornering the budget market. 

Reliance on third-party manufacturers

Although IKEA has developed strong relationships with its suppliers, the fact that more than 50% of its products are manufactured by third-parties leaves IKEA in a position of serious reliance on other companies. Its long-term and collaborative arrangements help reduce this risk, but it is still a less favorable position to be in than producing everything in house. 

Bad press and dangerous products

Since 2011, five children have been killed by an IKEA product, the Malm dresser, toppling over onto them. The company has agreed to pay settlements of around $50 million to several families of the victims.  

Unsurprisingly, this has led to a public relations nightmare, which could seriously damage IKEA’s reputation. The company has also received bad press for treating its workers poorly .

Few assembled furniture offerings

IKEA is a company that focuses on providing its customer base with cheap, unassembled furniture. While this works well to corner its core market, it does leave other potential markets, like budget pre-assembled furniture, almost completely untapped. 

Managing timberland could distract from the core mission

By leasing its own forest land, IKEA is able to further ensconce itself in its supply chain, which leads to more control, lower prices, and better sustainability initiatives. However, managing and operating timberland is a costly and time-consuming effort, which could ultimately leave IKEA scattered and less focused on its core purpose. 

Opportunities

Gain a greater hold over the developing market.

Currently, IKEA is overwhelmingly focused on the developed world. In fact, 90% of its sales are from OECD countries , and 70% are in Europe alone. This leaves large swaths of the developing world practically untouched and represents a sizeable growth opportunity. 

IKEA is cognizant of this and has made moves into the Indian and Chinese markets. If the company continues to direct energy and resources in this direction, it could see a strong ROI.

Make use of e-commerce

Historically, IKEA’s strategy has focused on the in-store experience, which has been a key component of its success. However, as e-commerce becomes a greater part of everyday life, IKEA will need to find a way to effectively digitize and create a similarly enticing brand experience in the digital world. 

IKEA has begun making changes to better position itself in the developing e-commerce landscape. For example, many of its stores now double as fulfillment centers, and the company has made many behind-the-scenes changes to ensure online orders are fulfilled faster. 

Increase particleboard usage

Particleboard is a material that is made by gluing together wood particles. Essentially, particleboard is made from wood, but it is not wood. 

Surprisingly, a single log of wood yields more particleboard than wood, and it’s also lighter. Combined, this means that particleboard makes more efficient use of raw materials and transportation, given that its lower weight allows more particleboard items to be shipped per load. Overall, particleboard is 20% cheaper than wood. 

Currently, IKEA produces 45% of its products with particleboard and 55% with wood. If it raised the percentage of particleboard products, it could save significantly.

Earlier, we mentioned that IKEA has been at the butt of several lawsuits relating to the death of children that its products purportedly caused. Although the settlement amounts are drops in a bucket for a company of IKEA’s size, they do represent a threat if they increase in number or if the bad PR severely damages the company’s reputation. 

Possible recessions

Analysts have been predicting a recession in the American and European markets for years now. Unfortunately, this is also where the bulk of IKEA’s sales and customers come from. Although IKEA is diversifying into other markets, a severe recession in its core markets could theoretically represent an existential threat to the company. 

Following standards in developing markets

IKEA has made it clear that it places an emphasis on sustainability and market expansion. However, in some developing nations, local laws are antithetical to the standards IKEA holds for itself. This leaves the company in a dilemma: it must either adapt to the lower sustainability standards of these countries or delay its market expansion. Slowing down on either one of these could threaten IKEA’s current branding and positioning. 

Key takeaway #4: Ecommerce and the developing world present the largest opportunities 

It should come as no surprise that two areas that are growing rapidly, the developing world and e-commerce, represent some of the biggest growth opportunities for IKEA. Indeed, despite IKEA’s position as a global leader in the furniture space, failure to invest in these areas could spell trouble for the brand. 

Steps towards sustainability

As we stand face to face with an unprecedented climate crisis, businesses are seeking new avenues for sustainable growth. IKEA has fully embraced this new business paradigm and is making great strides in its effort to reduce its carbon footprint and become an all-around eco-friendly company. 

However, IKEA thinks that being sustainable means more than caring for the environment. It’s for this reason that it refers to its sustainability strategy as “People and Planet Positive.” In this strategy, IKEA notes three broad areas that it wants to improve on: 

Healthy and sustainable living

• Circular and climate positive
• Fair & equal

Let’s take a look at some of the changes IKEA is implementing to meet this goal. 

The first prong of IKEA’s sustainability plan is quite simple: to inspire others to live more happy and fulfilling lives. Overall, this is the vaguest part of its plan, and IKEA itself doesn’t seem to be entirely clear about what its own goals are. For example, IKEA states that  “We will, together with others, define what sustainable consumption means for IKEA.”

On a more concrete note, IKEA has been a leader in removing toxic materials from its supply chain. It has been ahead of the curve, removing problematic substances from its products even before they were officially banned.

Circular and climate positive 

IKEA is hoping to go one step beyond becoming a carbon-negative business and actually become a climate-positive business — that means that it’s attempting to not only stop hurting the environment but to benefit it as well. 

To this end, IKEA has made a shift towards more sustainable sources of its raw materials. For example, all its cotton, fish, and seafood currently come from sustainable sources. The company is also trying to source 100% of its wood from sustainable sources. Additionally, it will also promote the reuse of its products to extend their lifetime. 

By 2030, IKEA aims to be a completely circular business. 

Fair and equal

IKEA has received bad press over the years for the way that it treats its workers. Although it is vague about how it hopes to improve, IKEA notes several areas that it is attempting to make changes to. Some of these include gender equality, children’s rights, diversity encouragement, and providing stable and secure employment. 

Key takeaway #5: make the world better

IKEA, like all businesses, is up against an unprecedented climate crisis. Beyond that, there are serious social issues that IKEA can sometimes indirectly contribute to. As the world changes, it’s important to remember to change with it — don’t stubbornly take new paradigms as a chance to prove your original view was correct but as an opportunity to find new solutions that ultimately make the world a better place. 

IKEA in the Digital Age

From the start, IKEA has placed a significant focus on showrooms and the in-person experience — in some places, IKEA has become more known for its food than its furniture. But as more and more people move away from brick-and-mortar stores in favor of the e-commerce giants like Amazon, IKEA is put in a tough position. 

Its solution? Find ways to move into the modern age without sacrificing the original IKEA vision. Here are a few ways that the company is doing that. 

Stores double as fulfillment centers

Earlier, we discussed how IKEA is able to maintain cost leadership thanks to its dual-purpose showroom warehouses. Now, these facilities are taking on a third purpose as a fulfillment center. 

Although IKEA has had some degree of e-commerce for quite some time now, the increased popularity of e-commerce along with COVID, which forced IKEA to temporarily close 75% of its stores, has made the company fast track its online experience. These new moonlighting fulfillment centers have played a crucial role in handling the onslaught of online orders.

Teaching an old dog new tricks: integration

IKEA has been making an effort to not only improve its e-commerce presence but to better integrate technology into the shopping experience as a whole. One of the latest additions is “Shop & Go,” a feature in the IKEA mobile app. This lets you scan and pay for items while you shop so that you don’t have to wait in line for checkout.

Ethical data sourcing

Like all modern companies, IKEA’s digital strategy will rely in part on customer data. However, after gaining the market’s trust over approximately 80 years, it doesn’t want to throw that away. For this reason, it introduced the “Customer Data Promise,” which says that people need to come first in all data analytics and data-driven processes.

Although IKEA hasn’t gone too far down the rabbit hole, the company has started implementing XR to help customers visualize objects in their own homes.

Placing furniture in your home with the help of XR!

Key takeaway #6: keep up with the times

IKEA is a company steeped in tradition — 80 years worth. Perhaps more importantly, during that time, the business has focused almost exclusively on brick-and-mortar selling. Unfortunately, relying entirely on the old way of doing things simply isn’t tenable in this market. Business leaders need to learn to pivot as new technology emerges and integrate it into their strategy.

Finding the right employees and customers

Whether it’s employees or customers, all companies are run by and revolve around people. Finding the right people, however, is what makes or breaks a company. 

Between hiring strong candidates and reaching its target buyer persona, IKEA has succeeded in getting its products in front of the right people. 

IKEA's target buyer personas

Part of IKEA’s success lies in its ability to understand its target market. By getting fully acquainted with its ideal buyer persona, it can make better strategic decisions on all levels. 

So, who is IKEA’s core target market? Well, there are a few. 

To start, IKEA tries to corner young urbanites between the ages of 25 and 35, primarily those that have graduated high school, and are either single and living with a significant other or are married. 

There’s a good reason for this too: nearly 60% of American city dwellers plan to move in the next year. And that means they’ll likely need to buy furniture. 

Additionally, IKEA tends to target renters, not homeowners, as this demographic is more likely trying their best to budget and save up for their future goals, like buying a house, getting married, etc. 

Beyond that, IKEA also tries to get the attention of married couples with children, which is evidenced by the fact that they include playpens for children in the stores. Plus, situating the stores outside cities can make them more appealing to suburbanites. 

IKEA's hiring process

Worldwide, IKEA has over 220,000 employees . To get to that level, IKEA has developed a unique hiring process.

Primarily, IKEA seeks to hire people who are interested in home furnishings, are friendly, and care about providing good customer experiences. It hires primarily during the months between April and August and provides relocation assistance for successful applicants. 

Most of its candidates come from online sources, such as Indeed. However, IKEA has also branched out and partnered with some social media sites and universities to find new candidates. Plus, it has a strong internal referral program. 

In interviews, IKEA hopes to find candidates with some connection to the store, such as having visited one of their outlets or their website. 

IKEA has a strong internship program in logistics, marketing, communications, and interior design. Interns are not only paid but receive college credit as well. 

However, unlike many employers, IKEA doesn’t require that employees hold a formal degree except for specialist positions. That said, experience is still largely required — IKEA does expect some of its employees, such as interior design managers, to be well-versed in home design and retail trends. For other positions, just an interest is enough. 

Key takeaway #7: surround yourself with the right company 

Wise people have said that you’re only as good as the people you surround yourself with. IKEA has taken that to heart. 

For any business to succeed, it’s important to have a robust hiring process that attracts the right candidates and places them in suitable positions. On the consumer side, businesses need to be clear on what type of customers they hope to attract so that they can target their marketing efforts towards them. 

Final thoughts and key takeaways

Over the past 80 years, IKEA has grown from a small mail-order catalog in rural Sweden into one of the world’s largest furniture retailers. In the process, it has become nothing short of a global staple and a cultural icon. 

Recap: growth by the numbers

The ultimate list of strategic takeaways, strategy must be built on market insights.

While Kamprad did have a strong vision of where the company is heading, his strategic steps were based on market evaluation and identified market needs. 

He built the product strategy around the wishes and behaviors of IKEA customers. For example, disassembled furniture was created from observing customers how they struggled with getting furniture into their cars. 

Place customer experience at the heart of your strategy

Unique, home-like layout, delicious meatballs, and play area are only the start of the IKEA experience. 

Customers continue to value IKEA products due to building them at home, associating higher value to them. With this approach, IKEA continues its cost-leadership strategy while ensuring loyalty and high quality of its products. 

Innovation as a part of the strategy

IKEA’s been around for more than 80 years. Sticking to the traditional business model would only take them so far and it’s safe to say that they’d definitely not emerge as market leaders without any innovation and adaptation. 

With their vision in mind, they’ve managed to transform from brick and mortar stores to e-commerce and pick-up points. To support the transformation, they leaned into the latest technology and managed to strategically expand into the digital world.

Sustainable practices for a better world

With great power comes great responsibility… And big brands like IKEA understand the environmental and societal power they have. They have already banned toxic materials from their production, they are striving to become a climate-positive business and to positively impact the whole value chain.  

In the end, it seems that IKEA’s success largely comes from its ability to balance maintaining its core vision with changing to adjust to new market landscapes. At the start, Kamprad envisioned a store that sold products at budget prices for the masses to enjoy. Now, Kamprad has achieved that, but it took several changes along the way, such as pivoting from small goods to furniture, from fully-assembled furniture to flat-pack furniture, and more recently, from brick-and-mortar to e-commerce. 

Following in IKEA’s footsteps, business leaders should fully understand the need to keep your vision intact while still staying flexible enough that you can adjust your strategy to the changing waters of the market.

How to Implement a Marketing Strategy: The IKEA Case

Introduction

A marketing strategy allows businesses to stay in touch with their customers, design the correct items, and decide how to transmit information about those products.

Without a defined plan, companies won't know who their customers are, won't create the correct items, and will waste money promoting them.

Table of Contents

What is a Marketing Strategy?

IKEA's Killer Marketing Strategy

The 7 P's of IKEA Marketing

Nr. 1: Product - Quality Meets Expectations

Nr. 2: Price - Affordable for Everyone

Nr. 3: Place - Leveraging Offline and Online Channels

Nr. 4: Promotion - From a Picturesque Catalog to Creative and Original Ads

Nr. 5: Physical Evidence - Managing a Strong Trust Relationship

Nr. 6: People - Be Open for New Influencers

Nr. 7: Processes - Family-friendly Stores

1. What is a Marketing Strategy?

To keep it simple, a marketing strategy is a roadmap that indicates how to best target your audience and how to convert them into customers.

For your marketing plan to work, you have to answer the following questions:

What is your company’s value proposition?

What does your brand stand for?

What does your target audience look like?

What are their needs?

How do you communicate with your (prospective) clients?

With these questions in mind, you will have a better understanding of how to create your advertising and PR campaigns.

But b efore developing your strategy, you must do thorough marketing research to avoid expensive and embarrassing mistakes.

This research will allow you to gather valuable information about your market that will help you make the right strategic decisions.

2. IKEA’s Killer Marketing Strategy

Being one of the most recognizable brands with an iconic logo helps to understand why IKEA’s marketing strategy is a success story.

The furniture giant follows a marketing strategy called the 7 P’s of marketing which stands for Product, Place, Price, Promotion, Physical evidence, People, and Process .

IKEA prioritizes projecting a consistent brand message across all 7 elements to create a strong connection with their customers.

3. The 7 P's of IKEA Marketing

A. product - quality meets expectations.

In our current era marked by the use of disposable items, IKEA has decided to go in the opposite direction by promoting sustainability .

All of IKEA’s 9.500 products have the goal to last long and be reusable.

They adhere to a design philosophy called democratic design that aims to create products with great designs that can be used by anyone .

The elements of democratic design include:

Form - Beautiful designs that capture the attention of the consumers.

Function - The product must have a clear purpose.

Quality - Quite simply, the durability and good condition of IKEA’s products and materials.

Sustainability - From using only the necessary materials and resources to create the furniture plus reducing the amount of waste these designs produce.

Low price - Achieving the right balance between good quality and affordable prices by looking at the materials, changing the design, or going through the production process again.

b. PRICE - Affordable for Everyone

The price should match the perceived value your customers have regarding your products.

By researching your target audience and creating buyer personas you can find out how much they would be willing to spend on each item.

Looking at your competition plays a huge role if you want to get ahead of them.

You can do that by under-pricing your competitors or making your products match the price point.

IKEA maintains a balance between attracting customers willing to spend a limited amount of money on furnishings and making a profit on each product transaction.

The furniture retailer uses clever techniques to keep costs low.

First, the business cuts personnel by allowing customers to select products from the storage container.

Second, selling the furniture in its components instead of getting them already assembled is another decision based on keeping costs low.

Third, IKEA’s pricing strategy is designed to appeal to the customer’s emotional decision-making instead of rational decision-making .

The company applies the Price Point Perspective (PPP) that makes the price of your new office chair €59.99 instead of €60.

This psychological trick makes your mind believe that you are saving money and prompts consumers to purchase more.

c. PLACE - Leveraging Offline and Online Channels

The best way to identify where to sell your products is by truly knowing about your customers.

Some key features you might look into should be where your audience spends most of their time (supermarkets, regular brick-and-mortar stores, online stores) and to analyze where they would look for your products (search engines, magazines).

One of the reasons why hundreds of millions visit IKEA stores is because of its smart positioning.

They slowly shift from their original huge warehouses outside of towns to smaller stores in the city centers to get closer to their customers and make it more convenient.

Regarding online channels, the furniture giant includes multiple marketing channels such as print advertising and media advertising, sales promotions, events, public relations, and direct marketing .

d. PROMOTION - From a Picturesque Catalog to Creative and Original Ads

“Experience the power of a bookbook” is a parody of Apple in which the new IKEA catalog is presented funnily.

This point refers to all the marketing, advertising, and sales strategies combined to reach your customers online or offline.

Every year more than 200 million copies of the IKEA catalog are being produced .

Each page is designed to the smallest detail and their furniture is staged in the best conditions to make it aesthetically pleasing to scroll through.

It’s undoubtedly one of their best marketing content and focuses on telling stories about their products.

They encourage people's creativity by arranging their items in such a way that they form a full picture with no details out of place.

Furthermore, IKEA’s advertisement campaigns are infused with humor to position the brand as a casual brand and to make them more approachable .

e. PHYSICAL EVIDENCE - Managing a Strong Trust Relationship

This is the aspect of your company that is perceived by your customers as legitimate and trustworthy.

This comes in two forms.

First, it is the evidence that your company exists.

Basically, everything that is created under your company's name like your logo, business card, banners, social media accounts, etc. is proof of your company’s existence.

Second, it includes all the physical and non-tangible items showing that your customers have purchased something from you or the service you have delivered to your audience.

This can be receipts, brochures, PDFs, etc.

IKEA manages to have a strong visual presence with for example their simple but unique logo, their well-designed annual catalog, and the huge bags people use for many different tasks now .

Establishing trust with your target audience is one of the most important factors influencing public perceptions of your business. 

Showing your brand's visibility online or offline will ensure that your customers will have engaged with your company before they engage in purchasing actions.

To understand the different strategies that other companies have used to build trust among their target audiences, you would first need to conduct a Competitor Analysis .

f. PEOPLE - Be open for New Influencers

Anyone who is directly or indirectly connected to your company is included in this category like your employees, influencers you are working with, company shareholders, and so on.

It is crucial to have people working for you who understand their role and have received enough training to represent your company positively.

This point goes further when you collaborate with influencers who are representing your brand as they can have a big impact on the type of customers they attract .

For example, in this video, the famous artist Zara Larsson is trying out typical Swedish snacks that you can get at IKEA.

g. PROCESSES - Family-friendly Stores

The last element of the 7 P’s of marketing talks about the various touch-points you have with your customers when delivering your product to the customer.

This includes looking into the payment methods your customers utilize to purchase and distribute your product, as well as more subtle activities like maintaining your client connections.

IKEA has shown with their kids-friendly manuals that they care about making the customer processes as comfortable as possible.

The company also experimented with augmented reality (A.R.). Customers can picture a new piece of furniture using the IKEA Place app and their phones' cameras.

This way, IKEA ensures that their customers prevent having a negative experience in case they find out too late that a new purchase wasn’t as fitting as they thought it would be.

Another example is their in-store layout in which they create a clear pathway with catalog stands on the whole path to make it very easy to look up your chosen products no matter where you are in the store.

Finally, a crucial component of their plan is providing spaces for children to play while their parents look for furniture, which is also an excellent example of customer service.

IKEA has shown over the years that it is a company that cares about providing value to its consumers and delivering a great customer experience.

The company’s marketing strategy focuses on creativity and doesn’t shy away from experimenting with new ideas.

They undoubtedly are a beacon for other companies on how to best address their target audience.

IKEA's marketing strategy goes way beyond developing quality and affordable furniture options.

They focus on creating a comprehensive experience that also includes dining and recreational options for children.

These additional customer-centric alternatives make the company a tempting choice for many families who even go to the store to enjoy these leisure activities.

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The Marketing Strategy of IKEA: Building a Global Brand Through Simplicity and Affordability

IKEA is one of the world’s most recognizable brands, known for affordable furniture, minimalist Scandinavian design, and its unique “do-it-yourself” approach. Founded in Sweden in 1943, IKEA now operates over 400 stores in more than 50 countries . The brand’s marketing strategy has been key to its global success, carefully crafted to resonate with diverse audiences while staying true to its Scandinavian roots. The brand has generated over 45.1 billion (euros) in revenue for the financial year of 2024. Here’s a look at the core components of IKEA’s marketing approach and how they’ve helped make IKEA a household name worldwide.

Affordable Design and Quality

At the heart of IKEA’s strategy is the promise of affordable, stylish furniture. The brand’s mission is “to create a better everyday life for the many people,” which they accomplish by providing quality products at reasonable prices. IKEA achieves this by:

• Flat-Pack Design: IKEA’s signature flat-pack furniture reduces shipping and storage costs, allowing the company to sell items at lower prices.
• Self-Assembly Model: Customers assemble most IKEA furniture themselves, saving labor costs and helping IKEA keep its prices low.
• Efficient Materials Use: IKEA emphasizes sustainable, cost-effective materials like particleboard and fiberboard, which are affordable and lighter than solid wood.

This approach to affordability with quality has allowed IKEA to appeal to a broad market, from college students to families furnishing their homes.

Staying True to Scandinavian Roots

IKEA’s commitment to its Scandinavian design aesthetic has been a cornerstone of its brand since the beginning. Even as trends have evolved, IKEA has remained dedicated to simple, functional, and minimalist designs. This consistency is evident in IKEA catalogs over the decades—an IKEA catalog from the 1980s, for instance, looks strikingly similar to today’s. The emphasis on clean lines, practical storage solutions, and understated elegance has always been central to IKEA’s appeal. By staying true to these Scandinavian roots, IKEA has created a timeless brand identity that resonates across generations and cultures .

Store Layout and Customer Experience

IKEA’s store layout is one of its most distinctive features. Each IKEA store is designed as a one-way journey, leading customers through a series of showrooms that display products in a real-life context. This layout serves several purposes:

• Inspires Customers: By showcasing fully furnished rooms, IKEA inspires customers with ideas on how to use its products creatively. This approach makes the furniture relatable and practical.
• Increases Time Spent in Store: The one-way layout encourages customers to explore the entire store, increasing the time they spend inside and exposing them to more products.
• Emphasizes Product Utility: The layouts highlight IKEA’s focus on functionality and space-saving solutions, particularly appealing to urban dwellers.

IKEA’s store experience also includes dining areas with Swedish food, providing an additional reason for customers to visit and spend time at IKEA locations. The overall experience is not just about shopping; it’s about immersing customers in the IKEA lifestyle.

Simple, Consistent Branding

IKEA’s branding is clean, minimal, and consistent across all touchpoints. The brand’s blue-and-yellow color scheme (inspired by the Swedish flag), straightforward typography, and uncluttered design reflect the values of simplicity and functionality. IKEA’s brand identity is reflected in several ways:

• Product Names: IKEA uses Swedish names for its products instead of numbers or generic titles. This gives the brand a unique, playful identity and reminds customers of IKEA’s Scandinavian roots.
• Minimalist Aesthetic: From its logo to its advertising, IKEA keeps everything simple, which helps reinforce its core brand values and avoids overwhelming customers.
• Tone of Voice: IKEA’s tone is friendly, approachable, and straightforward, avoiding overly technical language and aiming to make customers feel comfortable and welcomed.

This cohesive branding helps build strong brand recognition and reinforces IKEA’s reputation as a company that values practicality and simplicity.

Localized Marketing Strategies

Though IKEA has a consistent global brand, it tailors its marketing strategies to suit local cultures and tastes. IKEA adapts product offerings, layouts, and advertising campaigns to fit the lifestyle and needs of each market. Some examples include:

• Product Customization: In Japan, where living spaces are often smaller, IKEA offers compact, multi-functional furniture. In the U.S., IKEA provides larger furniture options to accommodate bigger spaces.
• Localized Advertising: IKEA creates ad campaigns that resonate with local audiences, using humor and relatable situations. For example, IKEA’s Chinese New Year ads often emphasize family gatherings and traditions, appealing to Chinese cultural values.
• Store Design Adjustments: In countries with smaller living spaces, like Hong Kong, IKEA stores highlight space-saving solutions and multifunctional furniture.

This approach allows IKEA to connect with diverse markets while maintaining its global brand identity, making it feel both international and familiar.

Digital Marketing and E-commerce

IKEA has embraced digital transformation, investing heavily in online platforms and mobile applications to reach customers. Its digital marketing efforts include:

• Augmented Reality (AR): IKEA’s “IKEA Place” app allows users to visualize how furniture will look in their own homes using AR technology. This feature enhances the shopping experience, helping customers make informed choices.
• Social Media Engagement: IKEA uses social media platforms like Instagram, YouTube, and Facebook to connect with customers and showcase DIY projects, room makeovers, and product tips. This content is often created to be fun and inspirational, appealing to younger audiences.
• User-Generated Content: IKEA encourages customers to share how they use its products through hashtags like #IKEAatHome, allowing the brand to showcase real customers’ creativity while fostering community.

E-commerce is another priority. With streamlined websites and apps, IKEA provides a user-friendly online shopping experience. This digital focus helps IKEA remain accessible to customers who may not have a store nearby or prefer the convenience of online shopping.

Sustainability as a Core Value

Sustainability is a central part of IKEA’s marketing strategy, appealing to environmentally conscious consumers. IKEA has made a public commitment to sustainability, aiming to become climate-positive by 2030. Key initiatives include:

• Sustainable Materials: IKEA is transitioning to 100% renewable or recycled materials for its products. For instance, many IKEA items are made from recycled plastic, bamboo, and responsibly sourced wood.
• Renewable Energy Initiatives: IKEA has invested in renewable energy, with wind and solar projects supplying a large part of its energy needs.
• Product Take-Back Programs: IKEA has implemented furniture take-back and recycling programs in many countries, allowing customers to return used furniture instead of discarding it.

By incorporating sustainability into its marketing, IKEA appeals to eco-conscious customers, enhances brand loyalty, and strengthens its image as a responsible global company.

Emotional Storytelling

IKEA’s advertising often focuses on storytelling, emphasizing the role of its products in everyday life. This approach helps create an emotional connection with customers and showcases the brand as a part of their lives. Key elements include:

• Relatable Scenarios: IKEA ads feature real-life moments, from a family gathering around a dining table to a student decorating a first apartment. This makes the brand feel relatable and inclusive.
• Humor and Heart: Many IKEA commercials use humor, lightheartedness, or sentimental stories that appeal to viewers’ emotions.
• Lifestyle Focus: IKEA emphasizes the lifestyle its products enable, rather than focusing solely on the products themselves. This approach makes IKEA feel like more than just a furniture store; it’s a part of how people live.

This focus on emotional storytelling helps IKEA differentiate itself from competitors and reinforces its mission to create a better everyday life for its customers. ‍

Loyalty Programs and Customer Engagement

IKEA’s loyalty program, IKEA Family , enhances customer engagement and builds brand loyalty. The program provides members with exclusive discounts, early access to sales, and special events, such as design workshops and product previews. Key aspects of the IKEA Family program include:

• Personalized Offers: IKEA Family members receive personalized discounts based on their shopping habits and preferences.
• Exclusive Content: Members gain access to design tips, inspiration, and exclusive content that encourages them to keep IKEA top-of-mind.
• In-Store Benefits: IKEA Family offers free coffee or tea in-store, as well as extended warranties on certain products, enhancing the overall in-store experience.

This program helps IKEA strengthen its relationship with customers, fostering loyalty and encouraging repeat visits.

IKEA Will Never Go Out of Style

IKEA’s marketing strategy combines affordability, a memorable in-store experience, and a strong brand identity with digital innovation and sustainability. By adapting to local markets, engaging customers online, and promoting eco-friendly practices, IKEA has built a brand that resonates worldwide. It continues to thrive as a global leader in the furniture industry by staying true to its mission: creating a better everyday life for the many people. Through smart marketing, IKEA has succeeded in making quality, stylish furniture accessible to people from all walks of life.

Disclosure: This list is intended as an informational resource and is based on independent research and publicly available information. It does not imply that these businesses are the absolute best in their category. Learn more here.

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IKEA is one of the world’s most recognizable brands, known for affordable furniture, minimalist Scandinavian design, and its unique “do-it-yourself” approach. IKEA now operates over 400 stores in more than 50 countries. The brand’s marketing strategy has been key to its global success, carefully crafted to resonate with diverse audiences while staying true to its Scandinavian roots.

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IKEA Marketing Strategy 2024: A Case Study

IKEA, a renowned furniture brand, has established its presence across 50+ markets with 422 stores worldwide. With a focus on expanding its global reach, IKEA added 19 stores in the previous year, including its first-ever store in India. This showcases the brand’s commitment to growth and its dedication to meeting the needs of diverse customer segments.

IKEA’s marketing strategy revolves around targeting various demographics, including bachelors, families with young children, professionals, students, and retirees. The company employs mono-segment and adaptive positioning to tailor its products and messaging to the preferences of each customer group.

Utilizing multiple marketing channels , IKEA’s omnichannel approach ensures a comprehensive customer experience. The brand leverages its website, mobile application, social media platforms, commercials, and physical stores to connect with its customer base.

Affordability and sustainability are key pillars of IKEA’s marketing strategy. By offering affordable furniture solutions and promoting environmentally friendly practices, the brand attracts customers who value both quality and responsible consumption.

IKEA’s marketing strategy is further enhanced through brand sponsorships and collaborations with influencers. These partnerships contribute to increased brand visibility and resonate with the target audience.

The optimization of IKEA’s mobile website and application ensures speed, display quality, and user experience, inviting customers to explore and make purchases. Furthermore, the brand actively engages in SEO strategies, utilizing relevant keywords and Google advertisements to enhance its online visibility.

IKEA’s social media presence is impressive, with millions of followers and likes on Facebook and Instagram, respectively. This engagement demonstrates the brand’s ability to connect with customers and drive brand awareness through interactive content.

Digital marketing strategies play a significant role in IKEA’s overall marketing approach. The brand conducts free online workshops to engage with customers and generate leads, showcasing its commitment to providing value-added content and building lasting relationships.

By relying on content marketing across various platforms, IKEA conveys its brand values and maintains a distinguished presence in the market. The company effectively uses storytelling and informative content to engage customers and promote its products and initiatives.

Overall, IKEA’s marketing strategy successfully positions the brand as a leader in the furniture industry. By focusing on affordability, sustainability, and a customer-centric approach, IKEA continues to expand its global presence and maintain customer loyalty.

Key Takeaways:

• IKEA targets various customer segments, including bachelors, families, professionals, students, and retirees.
• The brand utilizes multiple marketing channels, such as websites, mobile applications, social media, commercials, and physical stores to connect with its customer base.
• Affordability and sustainability are key focuses of IKEA’s marketing strategy.
• Brand sponsorships and collaborations with influencers enhance IKEA’s marketing efforts .
• IKEA actively engages in SEO strategies, optimizing its online visibility and utilizing relevant keywords and Google advertisements.

IKEA Target Audience

IKEA, with its affordable and sustainable products, appeals to a wide range of consumers. The company understands the importance of customer segmentation and product positioning to meet the diverse needs and preferences of its target audience.

IKEA’s target audience encompasses various demographics, including bachelors, families, professionals, students, and retirees. By catering to the unique needs of each segment, IKEA ensures that its products align with their lifestyles and desires.

The company’s product positioning strategy focuses on cost-conscious customers who value value for money and adaptability. IKEA’s extensive market research allows it to stay current with evolving trends, such as the global shift towards minimalism, and continuously update its product offerings to reflect these preferences.

With a customer-centric approach, IKEA strives to create the best possible shopping experience for its target audience. By providing affordable, quality furniture that resonates with their values, IKEA has successfully positioned itself as a trusted brand in the home furnishings market.

The value that IKEA offers to its target audience extends beyond the products themselves. The company’s democratic design principles, which emphasize form, function, quality, sustainability, and affordability, play a significant role in attracting customers.

By incorporating renewable materials, focusing on energy efficiency, and considering the entire product lifecycle to reduce waste, IKEA demonstrates its commitment to sustainability. This resonates with younger, middle-class shoppers who prioritize eco-friendly options in their purchasing decisions.

Through its iconic product catalogue, IKEA inspires customers and enhances their shopping experience. This catalogue serves as a source of inspiration, offering design ideas and showcasing the vast range of products available. It allows customers to visualize how IKEA’s furniture and accessories can transform their homes.

By targeting different consumer segments, IKEA ensures that its product offerings meet the specific needs of various individuals and households. Whether it’s offering space-saving solutions for small apartments or functional and practical designs for families with young children, IKEA’s product positioning strategy caters to the diverse requirements of its target audience.

Overall, IKEA’s success in appealing to its target audience lies in its understanding of customer segmentation, product positioning, and the ability to constantly adapt to changing trends. By providing affordable, sustainable, and well-designed furniture, IKEA continues to meet the desires and expectations of its loyal customer base.

IKEA Marketing Channels

IKEA employs a diverse range of marketing channels to effectively reach its target audience. These channels include its website, mobile application, social media platforms, commercials, print ads, and physical stores. By utilizing a combination of traditional and digital channels, IKEA maximizes its brand visibility and fosters meaningful connections with customers.

IKEA’s website serves as a key marketing platform, allowing customers to explore its extensive product offerings, access detailed information, and make purchases. The website showcases a user-friendly interface and offers a seamless shopping experience. Regular updates on new offers, discounts, and promotions keep customers engaged and encourage repeat visits.

In today’s digital age, social media plays a crucial role in marketing strategies. IKEA leverages popular social media platforms such as Facebook, Instagram, Twitter, and YouTube to engage with its target audience. Through these platforms, the brand shares captivating content, product highlights, and updates, driving brand awareness and fostering an interactive community. Social media marketing campaigns enable IKEA to connect with its customers on a more personal level and create a strong online presence.

Commercials and print ads continue to be effective marketing channels for reaching a wider audience. IKEA invests in well-crafted commercials that resonate with customers, showcasing its products and brand values. Print ads in magazines, newspapers, and mailers provide additional exposure, allowing the brand to reach customers who prefer traditional media channels.

Physical stores remain a vital component of IKEA’s marketing strategy. The immersive in-store experience allows customers to physically interact with products and envision how they’ll fit into their homes. Store layouts are carefully designed, creating an inspiring and practical journey for shoppers. This holistic approach to marketing ensures that customers have multiple touchpoints with the IKEA brand, resulting in increased brand recognition and customer loyalty.

– IKEA’s retail sales reached 44.6 billion euros last year, demonstrating its significant market presence and customer reach. – In 2022, IKEA opened 38 new sales locations worldwide, expanding its physical footprint and accessibility to customers. – The company welcomed an impressive 822 million visitors in 2022, indicating a growing interest in its brand and offerings. – While online sales saw a slight decline compared to the previous year, with a 10% decrease, IKEA still hosted over 4.3 billion online visitors, highlighting the importance of its digital channels.

The combination of a comprehensive online presence, engaging social media marketing, captivating commercials, and visually appealing physical stores allows IKEA to effectively engage its target audience and build strong brand recognition. By employing a multi-channel marketing approach, IKEA ensures that its message and products are accessible to customers across various touchpoints, creating a seamless and integrated customer experience.

IKEA Marketing Strategy

IKEA’s marketing strategy is a comprehensive approach that incorporates various key elements to drive its success. The company’s strategy is deeply rooted in understanding consumer behavior and meeting their needs, while focusing on five essential elements in its democratic design philosophy: form, function, quality, sustainability, and affordability.

One of the core aspects of IKEA’s marketing strategy is its creative and consistent brand theme. The company has established a distinct identity that sets it apart from competitors, infusing every aspect of its business with a sense of self-assuredness. This cohesive brand theme resonates with customers and helps IKEA maintain a strong and recognizable presence in the market.

Furthermore, affordability and sustainability are key pillars of IKEA’s marketing efforts. The company aims to attract younger, middle-class shoppers who seek budget-friendly and stylish home furnishings. By offering affordable products without compromising quality, IKEA appeals to value-conscious customers.

IKEA’s sustainability focus is evident in its dedicated sustainability strategy and hub, which is centered around sustainable living. The company uses renewable materials, reduces waste, promotes recycling, and has implemented initiatives to reduce its carbon footprint. By emphasizing sustainability, IKEA appeals to environmentally conscious consumers who value brands committed to making a positive impact on the planet.

To reach a wider audience and enhance its brand visibility, IKEA also engages in strategic partnerships and sponsorships. The company occasionally collaborates with well-known figures, such as photographer Annie Leibovitz, for campaigns. These partnerships help IKEA enhance its brand image and increase its reach through innovative content marketing.

Furthermore, IKEA leverages social media platforms as an integral part of its marketing strategy. The company’s Instagram feed, for example, showcases a mix of content including inspiration, discounts, new ranges, and trends. IKEA’s social media advertising highlights free delivery, appealing to customers seeking convenience and value.

In addition to social media, IKEA embraces digital marketing by leveraging popular platforms like Facebook, Instagram, and Twitter. The company’s digital presence helps build brand loyalty and trust through inspiring content and meaningful customer engagement. IKEA capitalizes on its brand name through Google Ads campaigns, further increasing its visibility and reach in the digital space.

Overall, IKEA’s marketing strategy combines a creative brand theme, affordability, sustainability, strategic partnerships, and digital marketing to connect with its target audience and drive its success in the furniture market.

Exceptional In-store Experience

One of the key strengths of IKEA is its exceptional in-store experience. With 75 years of presence in the market and stores in nearly every corner of the world, IKEA has established a global retail reach that showcases its commitment to providing an immersive shopping experience for customers.

The in-store experience at IKEA is carefully designed to engage customers’ senses and fuel their imagination. Through a distinct store layout and strategic product display, IKEA creates a tactile adventure that inspires customers to visualize their living spaces adorned with IKEA’s offerings.

The products at IKEA are strategically displayed in mock rooms, allowing customers to see how different pieces can come together to create a cohesive look. Lighting systems are employed to maximize the visual appeal of the products, further enticing customers to explore and make purchases. This thoughtful arrangement not only showcases the product range but also sparks inspiration and creativity among customers.

Furthermore, IKEA places great emphasis on providing exceptional customer service. The staff is trained to assist customers in every step of their shopping journey, from product selection to navigating the store layout. This commitment to customer service ensures that every customer has a memorable experience that exceeds their expectations.

In addition to a visually stimulating and interactive shopping environment, IKEA offers comfort and convenience to its customers. The stores have inviting ambiance and ample seating areas where customers can rest and take their time while exploring the wide range of products. Moreover, IKEA’s in-store cafe offers affordable Swedish treats, creating an enjoyable and unhurried shopping environment.

Overall, IKEA’s exceptional in-store experience plays a significant role in enhancing customer engagement and encouraging repeat visits. By employing strategic product display and providing exceptional customer service, IKEA creates a shopping environment that is both inspiring and enjoyable for customers.

Website and Mobile Application Marketing

As part of its comprehensive marketing strategy, IKEA recognizes the importance of its website and mobile application in reaching and engaging with its target audience. With a focus on providing a seamless and user-friendly experience, IKEA invests in UI/UX design to ensure that customers can effortlessly navigate its digital platforms.

One of the key features of IKEA’s website and mobile app is the inclusion of an enquiry-based chatbot. This chatbot serves as a helpful virtual assistant, addressing customer inquiries, providing product information, and guiding users through their online shopping journey. By offering this interactive feature, IKEA enhances customer satisfaction and engagement.

Regular updates on new offers, promotions, and product launches are also a crucial aspect of IKEA’s website and mobile app marketing. By keeping customers informed of the latest deals and relevant updates, IKEA maintains customer interest and encourages repeat visits to its digital platforms.

Furthermore, IKEA’s dedication to enhancing the customer experience extends beyond traditional functionalities. The introduction of a 3D modeling app allows customers to visualize how IKEA products would look in their own homes, enabling them to make more confident buying decisions. This innovative feature not only enhances customer engagement but also increases the likelihood of upselling by creating a desire in customers to revamp their living spaces.

Through its website and mobile application marketing efforts, IKEA effectively utilizes technology, user-centric design, and engaging features to provide customers with a seamless and personalized online experience.

Comparing IKEA’s Website and Mobile App Metrics

While the total number of online visitors to IKEA’s website and mobile app decreased slightly from 5 billion in 2021 to 4.3 billion in 2022, the company’s remarkable conversion rate of 1.7% surpasses the industry average significantly. This indicates that IKEA’s digital platforms effectively engage and convert users into customers.

By leveraging data-driven insights, optimizing user experience, and incorporating innovative features such as the chatbot and 3D modeling app, IKEA continues to enhance its website and mobile application marketing to drive customer engagement, increase conversions, and solidify its position as a leader in the furniture industry.

IKEA’s SEO (Search Engine Optimization)

In today’s digital landscape, search engine optimization (SEO) plays a crucial role in attracting organic traffic to websites. IKEA recognizes the importance of SEO in its marketing strategy and employs various techniques to enhance its online visibility and reach. By leveraging SEO, IKEA aims to capture the attention of potential customers actively searching for furniture and home accessories.

One key aspect of IKEA’s SEO efforts is the inclusion of product-specific keywords in its website content. By strategically incorporating these keywords, IKEA increases its chances of appearing in relevant search engine results. This optimization allows the company to connect with users who have a genuine interest in their offerings, increasing the likelihood of conversions and sales.

Furthermore, IKEA utilizes Google advertisements to further boost its organic ranking. By investing in targeted ads, the company ensures that its website appears prominently in search results, increasing its visibility and attracting more visitors. With over 4.3 billion online visitors in 2022, IKEA’s commitment to SEO helps them maintain a strong online presence, even in a highly competitive market.

It is worth noting that the majority of users do not move past the first page of search engine results. This highlights the significance of effective SEO efforts for IKEA, as it ensures that the company’s website is among the top results for relevant search queries. By focusing on SEO, IKEA not only increases its organic ranking but also maximizes the chances of attracting potential customers who are actively seeking their products.

With an extensive range of products and a customer base that spans the globe, IKEA’s SEO efforts are crucial for maintaining its competitive edge. By optimizing its website content, utilizing targeted advertising, and staying up to date with the latest SEO practices, IKEA continues to attract and engage customers in the ever-evolving digital landscape.

IKEA’s SMM (Social Media Marketing)

IKEA understands the importance of social media marketing in today’s digital landscape. By actively engaging with its audience on platforms such as Facebook, Instagram, Twitter, and YouTube, IKEA has successfully amplified its brand presence and connected with millions of consumers.

With an extensive following on social media, IKEA utilizes these platforms to share engaging content, showcase its products, and provide regular updates on new offerings. The company’s social media marketing strategy plays a crucial role in driving brand awareness and generating leads.

Connecting with Consumers

Through its social media channels, IKEA builds meaningful connections with its target audience, which includes middle-class consumers who are budget-conscious, young adults, families setting up their first homes, and environmentally conscious individuals.

By understanding the unique preferences and needs of its audience, IKEA tailors its social media content to resonate with them. The company’s social media posts often feature discounts, news, and events that appeal to its target market .

Responsive and Customer-Centric Approach

IKEA’s social media team maintains a responsive approach, promptly addressing customer complaints and queries. This customer-centric focus helps to foster trust and loyalty among consumers, demonstrating IKEA’s commitment to delivering an exceptional customer experience.

Utilizing Various Platforms

IKEA leverages its presence across multiple social media platforms to maximize its reach and engagement. By having different accounts for each country, such as IKEA USA, IKEA UK, and IKEA Sweden, the company tailors its content to better suit the preferences and interests of specific markets.

The company’s social media marketing efforts are not limited to a single platform. With a comprehensive digital marketing strategy, IKEA also harnesses the power of content marketing on platforms like YouTube. For example, the Home Tour Series videos on YouTube provide customers with design inspiration and showcase IKEA’s products in real homes. Campaigns like the Square Metre Challenge further promote IKEA’s ethos of sustainability and functionality.

Companies can learn valuable insights from IKEA’s successful social media marketing campaigns and strategies, especially as the digital landscape continues to evolve. With the shift towards online channels for promotion and customer engagement, IKEA’s effective use of social media serves as a prime example of how brands can effectively connect with their target audience and drive business growth.

Content Marketing

Content marketing plays a crucial role in IKEA’s comprehensive marketing strategy. The company understands the power of captivating content to engage and inspire customers. IKEA employs various mediums, from commercials and print ads to social media and its website, to convey its core values and connect with its audience.

One of IKEA’s most notable content marketing initiatives is its creative and engaging commercials. These commercials, often with a touch of humor, resonate with consumers and leave a lasting impression. By combining storytelling with their brand ethos, IKEA crafts commercials that are memorable and demonstrate their commitment to affordability, sustainability, and flexibility.

Through their content marketing efforts, IKEA reinforces its brand identity and values while providing customers with useful and engaging content. By leveraging various mediums, they effectively reach their target audience, inspire creativity, and nurture a strong connection with their customers.

IKEA’s marketing strategy has played a pivotal role in establishing it as a global furniture brand. By focusing on affordability, sustainability, and maintaining a consistent brand image, IKEA has successfully captured the attention of its target audience. Its commitment to sustainability is evident in its use of renewable materials, waste reduction efforts, and promotion of recycling.

The company has also prioritized energy efficiency by investing in renewable energy sources and optimizing its supply chain to minimize transportation emissions. IKEA’s pricing strategy, which offers affordable furniture without compromising on quality, has resonated with cost-conscious customers.

Through active engagement with customers on social media platforms, online forums, and interactive campaigns, IKEA has fostered strong connections with its audience. The company’s strong social media presence on platforms like Facebook, Instagram, and Twitter enables it to share product updates, design inspiration, and home improvement tips.

IKEA’s success is further reflected in its financial performance, with retail sales reaching 44.6 billion euros in the previous year. The opening of 38 new sales locations globally demonstrates the company’s expansion efforts, while the increase in foot traffic to 822 million visitors in 2022 highlights its growing popularity.

Although online sales experienced a slight decrease in 2022, with 4.3 billion visitors, IKEA continues to leverage digital marketing strategies, such as social media engagement and innovative initiatives like chatbots and efficient packaging, to enhance the customer experience and increase cost savings.

Overall, IKEA’s customer-centric approach and successful marketing strategies have solidified its brand image and position as a leader in the furniture industry. With its focus on sustainability, affordability, and engaging with customers, IKEA continues to thrive and innovate in an increasingly competitive market.

What is IKEA’s marketing strategy?

Who is ikea’s target audience, what marketing channels does ikea use, what are the key elements of ikea’s marketing strategy, what is the in-store experience like at ikea, how does ikea utilize its website and mobile application for marketing, does ikea focus on seo as part of its marketing strategy, how does ikea utilize social media marketing, what role does content marketing play in ikea’s marketing strategy, what has contributed to ikea’s success as a global furniture brand, related posts:.

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Nina Sheridan is a seasoned author at Latterly.org, a blog renowned for its insightful exploration of the increasingly interconnected worlds of business, technology, and lifestyle. With a keen eye for the dynamic interplay between these sectors, Nina brings a wealth of knowledge and experience to her writing. Her expertise lies in dissecting complex topics and presenting them in an accessible, engaging manner that resonates with a diverse audience.

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IKEA: A GLOBAL MARKETING SUCCESS STORY

• Post author: UNI SQUARE CONCEPTS
• Post category: MARKETING
• Post published: June 14, 2018
• Post last modified: October 15, 2021
• Reading time: 6 mins read

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Ingvar Kamprad’s IKEA is a triumphant spin off, that has inspired many. IKEA exemplifies the fact that there is simply no formula to overnight success. In simple words, it requires everyday hard work in order to incorporate success in your life. This marketing case study centers on IKEA’s global marketing strategy and its successful implementation.

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IKEA was founded by Ingvar Kamprad in the year 1943. The founder dwelled upon a business oriented mindset, right since his childhood days. He was clear of developing his career in the field of business. He worked very hard in the initial stages of starting IKEA and began selling furniture. Gradually, a chain of IKEA stores started spreading worldwide and its products gained massive popularity. IKEA’s global marketing approach enabled it to reach the millions of people and turned IKEA into a success story!

Also read EXPERIENTIAL MARKETING STRATEGY OF SAMSUNG- A WINNING STORY.

1. Global middle class target

The global middle class segment of the society comprises of those people who aim at maximising their satisfaction on purchasing a product or a service, in the most inexpensive way possible. The gist behind IKEA’s global marketing for targeting the middle class segment is that the middle class segment is the largest segment of the society.

Moreover, who doesn’t want a cheap and good quality product in today’s world? IKEA highlights its global marketing strategy by putting more light on low prices offered, along with decent quality standards, which in turn enables them to capture the global middle class target. The strategy adopted by the company primarily focuses on Guerilla Marketing .

For eg. IKEA emphasises on buying the consumer an experience before he buys the furniture. The ‘Place in your room’ catalogue app of IKEA, lets a consumer try the desired products in their homes.

“There are no secrets to success. It is the result of preparation, hard work and learning from failure ”- Colin Powell

2. Vision- to create a better everyday life for many people

IKEA aims to create a better everyday life for many people of the world. They work upon this vision by primarily focusing on the ‘affordability factor’ of the people, such that masses are able to maintain a decent standard of living in an optimal way. Their vision isn’t just restricted to creating good quality furniture, rather focuses on the improvisation of quality of life for an average individual. IKEA aims at doing better everyday, in an efficient and cost effective manner.

3. Low prices offered

The basis of IKEA’s global marketing is rendering good quality products at low prices to their customers. It focuses on continuously lowering prices for their customers every year- a 2-3% cut per year. Ikea implements cost effectiveness into their organisation by making a number of trade offs:

• Self service- no sales people cost.
• Manufactures for itself- no third party involvement.
• Providing products in a flat package form, which is a cost effective method for shipment, storage and assembling.

Click here to know about THE FIVE MOST EFFECTIVE SALES CLOSING TECHNIQUES used by modern day salesmen.

4. Maintains a wide customer base

IKEA’s global marketing strategy has emerged as an ideal global marketing strategy worldwide. The strategy has enabled the organisation in maintaining a wide customer base. It relies on customer feedback and their average views of a product, inculcating the same in the organisation’s work structure. Moreover, the emphasis on affordability and quality by the organisation, keeps the old customers intact and attracts new ones, leading to widening of the customer base.

You might also be interested in reading A BEGINNER’S GUIDE ON HOW TO ATTRACT NEW CUSTOMERS TO BUSINESS .

5. Customer centric marketing strategy

Customer centric marketing is a strategy that focuses on product development according to the needs of every individual customers. IKEA has adopted a customer centric marketing in its global marketing strategy, which makes the organisation understand a customer’s lifestyle. For this purpose, numerous customer researches are undertaken to develop marketing objectives and inculcate the customer preferences in the organisation’s development.

For example, the Taiwan hot pot dish associated with dinner tables by IKEA emphasised on human interaction and led to a great customer experience at the same time. Click here to know about the BEST TYPES OF SALES STRATEGIES USED TODAY .

The above marketing case study exemplifies a successful and established organisation’s approach to marketing. This sets up an ideal example for established companies to develop their global marketing strategy. We all start from scratch, it’s the hard work and zeal that transforms our work into a success story, similar to Ingrav Kamprad’s IKEA- a global marketing success story. Before you leave, go through A BRIEF GUIDE FOR QUICK MARKETING TRAINING and brush up your professional marketing knowledge.

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UNI SQUARE CONCEPTS

Published: 01/03/2024

Updated: 12/06/2024

Branding, Design, Email, SEO, Social Media, Strategy, PPC

Unpacking IKEA’s digital marketing strategy: key observations

IKEA’s flat-packed furniture furnishes millions of UK homes, but the brand’s success is no accident. Let’s unpack some key elements to the Swedish giant’s UK digital marketing strategy.

From widespread use of inspirational imagery to email automations and smart use of content SEO, there are a number of ways IKEA’s winning with their digital activity. A great case study for any home and garden brand.

A consistent, familiar brand

IKEA’s blue and yellow brand colours — reflecting the Swedish flag — are bold, iconic and offer instant recognition. Online and offline, they are ever-present.

IKEA’s value proposition is similarly consistent and powerful, too. Customers know that they’re getting stylish homewares at an affordable price.

Through offering design and planning services, the brand also makes an attempt to come across as more than a retailer. As we’ll mention, by delivering strong visual imagery and project inspiration throughout their digital activity, they’re wanting to be more of a friendly design advisor.

Showcasing products in action

IKEA’s inspiration hub boasts plenty of visual ideas for users to chew over whilst they’re tucking into some Swedish meatballs. This can be filtered by room, activity, colour and style.

You don’t need us to tell you this, but including plenty of product imagery is good practice for any brand in the home and garden sector. IKEA’s galleries are hugely visual, aiming to inspire.

Harnessing user-generated content

Ah, UGC. The holy grail of authenticity. IKEA’s ‘As seen on Instagram’ image carousel features throughout their website — it’s a great way of showcasing products in real customers’ homes, complementing the more professional image galleries we just mentioned.

IKEA are keen to be as visual as possible, which is a big win.

Interest-free credit and free delivery

Like many savvy e-commerce brands, IKEA makes it as tempting as possible to convert by sweetening the deal with finance options .

By making that new oak-effect coffee table slightly less of a budgetary stretch in the short-term, offering interest-free credit certainly helps to facilitate conversions.

To further smooth the customer journey, IKEA also offers free delivery for small package orders over £60 and online project planning consultations .

Emphasising sustainability

IKEA’s target audience is as diverse as its product range, but there’s a particular focus on younger, middle-class shoppers seeking budget-friendly, stylish home furnishings.

IKEA is well aware of the eco-consciousness of this demographic. With their entire hub on sustainable living and a dedicated sustainability strategy , it’s clear the brand is keen to do more than just pay lip service to environmental concerns.

A playful, well-rounded organic social strategy

A perusal of IKEA UK’s Instagram feed shows a good mix of social media content with a consistent, varied output of inspiration content, discounts, new ranges and trends.

They’re not missing the opportunity to showcase their product range looking resplendent with professional, aspirational photography.

IKEA has even recreated Demi Lovato’s home with IKEA furniture — for ‘the celebrity look without the celebrity price tag’, naturally.

All great stuff that’s visual, inspirational and shareable with partners and housemates.

They’re also not afraid to jump on trends, showing how to do ‘what’s in my bag’ with a stop-motion effect , whilst also tagging products in their social posts — another great strategy for driving sales directly from social. Similarly low-fi was their tongue-in-cheek take on London Fashion Week . IKEA doesn’t shy away from those tried-and-tested techniques for drumming up engagement, either — competitions .

Eye-catching paid social creative

IKEA are making the most of bold, colourful ad creative in their social media advertising , emphasising their free delivery. A wise strategy and an enticing proposition, especially when you consider how nightmarishly busy IKEA in Leeds can be.

Beneath the main graphic are a series of product images to inspire customers.

Over on Instagram, ads typically contain a selection of products with links through to their corresponding pages.

A campaign-led ambassador and influencer strategy

IKEA occasionally partners up with well-known names and influential figures as part of their campaigns — for example, in their Life At Home campaign with leading photographer, Annie Leibovitz .

Interestingly for a global brand, IKEA says that ‘ our stores partner with local bloggers and influencers when there's an opportunity to work together ’, but we don’t see much evidence for this across their feeds.

A loyalty club

Like many successful home and garden brands, IKEA has launched something that looks and feels like a loyalty scheme — the IKEA Family . You can sign up for free and become part of their meatball-loving, flatpack furniture-assembling crew.

“As an IKEA Family member, you can enjoy discounts on selected home furnishing products, food products and services, not to mention free tea or coffee from Monday to Friday. You will also receive regular inspirational newsletters.”

It’s another great way of making customers feel valued and growing an email subscriber list. And when it comes to driving sales and return on investment, we know that email marketing is some of the best bang for your buck as a brand. Which moves us on nicely…

Automated email workflows

After signing up to the IKEA Family, their loyalty club, users receive a steady flow of communication as part of a workflow, inviting them to discover the benefits of membership.

However, despite adding a few products to the cart and letting them idle, we didn’t receive any abandoned cart emails — this seemed like a bit of a missed opportunity to recapture lost customers through another basic email automation.

Search-led content

Within IKEA’s ‘life at home’ and ‘how to’ resource sections, they’ve started to build somewhat of a content hub.

You’ll find articles like privacy solutions for small spaces and 6 ideas to optimise a hybrid workspace . This shows that IKEA are along the right lines when it comes to SEO-led content creation — they’re thinking about what their customers may be searching for and creating content to satisfy this need, meanwhile pulling in popular ranges they want to promote throughout the articles.

That said, many of these articles are quite thin on copy, which could limit their performance in search results. But when you have a domain authority like IKEA’s, you can probably afford to take some liberties.

A brand-led paid social category

Google Ads Transparency Center shows us that IKEA’s Google Ads campaigns capitalise on their brand name which, being such a popular household name, you can’t blame them for.

From what we can see, however, it doesn’t appear as though IKEA is making widespread use of display and programmatic advertising . So, that glossy beige FÄRGKLAR mug will not be following you around the internet until the end of your days — thankfully.

Even though there may be areas for some areas for a bit of home improvement, IKEA has a well-rounded, strategic approach to digital marketing, with the emphasis on being as visual as possible.

If you enjoyed this overview, you might want to check out our blog bursting with marketing tips, tactics and ideas for home and garden brands !

Also, why not grab a cuppa and take a gander at some of our award-winning work for businesses in the sector? If you like what you see, our talented team of digital marketers are only a message away using the button below.

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Johnny has been working magic with words at Extreme since 2016, with a particular focus on SEO content strategies. Fancy taking your organic search visibility up a notch? He's your guy.

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IKEA: The omnichannel strategy the Swedish furniture retailer used to reach the top

We have already talked about the value of case studies before, but we cannot stress enough how our readers can benefit from complete and detailed case studies. At ContactPigeon, we love writing about all-things-retail, and case studies about retail giants is our cup of tea . Therefore, this time we will extensively inspect IKEA, a conglomerate mostly known for its ready-to-assemble furniture, kitchen appliances, and home accessories. The IKEA omnichannel strategy is an exemplary model that made the brand the leading furniture retailer in Europe and one of the most valuable retail brands in 2021 worldwide .

As you can imagine, we have a lot to learn from IKEA’s founder; Ingvar Kamprad started the company in 1943 and strategically transformed it later into the empire that it is today. eCommerce and retail professionals can get inspired and learn valuable tools from a brand with a 78-year course and 456 stores around the world . 

Table of Contents

• > IKEA’s history
• > The awards IKEA has won up until now
• > The key success factors that drive the IKEA omnichannel strategy
• > 4 examples when IKEA’s omnichannel strategy skyrocketed customer experience
• > IKEA’s eCommerce website
• > Interesting eCommerce technology and tools IKEA uses
• > Retail technology that IKEA is missing
• > Impressive IKEA stats you shouldn’t miss

IKEA’s history

IKEA is an acronym standing for the founder’s initials, I ngvar K amprad, the name of the farm he grew up in, E lmtaryd, and the nearby village, A gunnaryd. In 1943, Ingvar’s father rewarded him for doing well with his studies with a small amount of money. Ingvar, always the entrepreneurial spirit, used the money to set up the IKEA company at his uncle’s kitchen. 

Later, in 1948 the founder of IKEA included furniture in its product range, establishing from the start the brand’s low-cost philosophy. In the ‘50s, because Ingvar’s success intimidated the competition, his rivals coerced local suppliers to exclude IKEA from their business dealings.

Always resourceful, IKEA’s mastermind decided to look for partnerships abroad and in 1953, despite all the obstacles, he managed to open the company’s first showroom in Älmhult. Additionally, in the same year, to save transportation costs and damage rates, Ingvar introduced the flat-pack, ready-to-assemble concept that, eventually, made IKEA so famous, and solidified its branding.

A decade later, Ingvar observed his customers’ habits and noticed that the IKEA stores were losing traffic during lunchtime. As a consequence, to avoid losing the customers’ attention and ability to purchase, he opened the first IKEA restaurant in 1960. Fast forward, in the ‘70s, IKEA has already expanded its physical presence in Norway, with more stores opening in Switzerland and Germany.

Lastly, in the early ‘80s, all this development called for a change in the company’s structure. With the aim of achieving a sustainable organization, Ingvar separates the ownership of the operations from the IKEA brand, thus introducing the franchise system.

The awards IKEA has won up until now

Before proceeding to the definitive aspects that form the IKEA omnichannel strategy, first things first. A retailer such as IKEA has gained enormous recognition and has been nominated on a global scale for various awards. After careful consideration, we have gathered the most important distinctions for its marketing campaigns, designs, and sustainability practices over the years.

• The “Unböring” campaign, Lamp – Grand Clio Award 2002
• The “Unböring” campaign, Lamp – London International Award 2002
• The “Unböring” campaign, Lamp – ANDY Awards 2002
• Grand Prix for the The “Unböring” campaign, Lamp – Cannes Lions International Festival of Creativity 2002
• Product award for the Hallarum Kitchen – EDIDA 2014
• Thank You Award – World Childhood Foundation 2015
• Innovative and Cutting-edge Designs Awards to four IKEA collections – Good Design 2018
• Circular Economy Award – World Economic Forum 2018
• CSR Engagement/Marketing Campaign of the Year – Edie Sustainability Leaders Awards 2019 
• Product design awards to nine IKEA collections – Red Dot 2019
• Gold Award for Best Performance in Home, Furniture, and DIY – PEAK Awards 2019
• Gold Award for Best Digital Multi-Channel Campaign – PEAK Awards 2019
• Silver Award for Best Video Campaign – PEAK Awards 2019
• Silver Award for Best Display Campaign – PEAK Awards 2019
• Silver Award for Best Paid Search Campaign – PEAK Awards 2019
• Gold Award for Best of YouTube / Innovation – Social Media Awards 2019
• Gold Award for Best of Facebook Family of Apps / Communication – Social Media Awards 2019
• Silver Award for Best of Facebook Family of Apps / Innovation – Social Media Awards 2019
• Gold Award for the IKEA Love Story campaign – PEAK Performance Marketing Awards 2020
• Platinum Award for Best In Retail / eCommerce for the best Facebook and Facebook family of Apps communication campaign – Social Media Awards 2020
• Platinum Award for Best In Retail / eCommerce for the best YouTube communication campaign – Social Media Awards 2020
• Gold Award for Best Use of YouTube for Action Campaigns – Social Media Awards 2020
• Gold Award for Best Dynamic Facebook Ads – Social Media Awards 2020
• Silver Award for Best Real-Time Activation for COVID-19 – Social Media Awards 2020
• Best Instore Solution – Reta Awards 2020
• Employer Recognition Award – MOSAIC Awards Ceremony 2020
• eTailer of the Year – e-Bizz & Social Media Awards 2020
•  eShop of the Year – E-volution Awards 2020
• Platinum Award for Customer Service and Operations – E-volution Awards 2020
• Gold Award for Home, Furniture, and DIY – E-volution Awards 2020
• Gold Award for eBusiness Innovation – E-volution Awards 2020
• Gold Award for Redesign – Relaunch (Website) – E-volution Awards 2020
• Gold Award for Customer Support – E-volution Awards 2020
• Gold Award for Omnichannel Experience – E-volution Awards 2020
• Silver Award for eCommerce Innovation – E-volution Awards 2020
• Silver Award for Mobile Commerce – E-volution Awards 2020
• Silver Award for Information Architecture – E-volution Awards 2020
• Corporate Award in Collaborating with Social Entrepreneurs – Catalyst 2030 Award, March 2021
• Gold Award in the Retail Stores category – Retail Business Awards 2021
• Silver Award in the eRetailers category – Retail Business Awards 2021

The key success factors that drive the IKEA omnichannel strategy

IKEA’s vision is “ to create a better everyday life for the many people ” and this message has been embodied in the brand’s strategy since its conception. This section is dedicated to the inspiring IKEA omnichannel strategy and the key axes that contributed to its stunning growth.

Democratic design approach

IKEA is the greatest furniture vendor around the world and the second-largest in the US, and these facts were the result of the brand’s holistic approach. The Democratic Design refers to the five dimensions that IKEA takes into account when they design a new product, evaluating the process of their product range.

These five elements are based on function, form, quality, sustainability, and affordability. The form reflects the minimalistic aesthetics of each furniture piece, while the quality is their durability and resistance through time. The minimalist architecture is both a statement and a very resourceful way to easier manufacture . Easier forms require less time to be produced, and less time to assemble, resulting in efficiency and lower labor costs. 

With regards to functionality and sustainability, IKEA’s strategy focuses on using mindfully the available resources to create proper goods for their clients. IKEA is famous for its sustainability practices and its recyclable products from particleboard (recycled wood chips blended together).

DIY mentality

Affordability is the fifth pillar of IKEA’s positioning and requires a section on its own. Ingvar desired a franchise that would make life easier both for the company and for the consumers. The aforementioned qualities that encompass the company’s production line would be meaningless if transportation and installation costs were sky-high.

Every element is carefully selected and the flat-pack delivery/self-service method is the final piece of the puzzle. The distribution system reduces both the manufacturing process and the damage costs, increasing productivity and trading at a massive scale.

Demographic targeting and (literal) shelf life

IKEA had an incredible insightfulness to its target audience, without even realizing it.  Older generations stumbled upon an endless headache when buying home supplies because they wished for furniture that would last a lifetime. IKEA’s biggest asset and offer to the fundamentals of the retail industry is the ephemeral; a mentality we observe in the younger generations, starting from the Millenials and thereafter.

This philosophy was embraced by a younger demographic that wasn’t interested anymore in lifetime investments; by making an archaic tradition moot, the brand relieves a huge amount of stress from the buyers. With quality and affordability but not meant to last forever, the IKEA brand supplies its clients with easy-to-use furniture that, ultimately, is even easier to dispose of and be replaced. As a result, this trend influenced the majority of the retail big leagues, forced conventional furniture businessmen to realign their interests and recreate this model, albeit unsuccessfully. 

People and Planet Positive

The Swedish giant has dedicated its life’s work to make the world a better place within the planet’s boundaries. The People and Planet Positive strategy is the conglomerate’s agenda summarizing the ways in which they are already making a difference and stating their future plans.

This IKEA strategy abides by the UN Sustainable Development Goals , is updated annually, and is infused in the entirety of the brand’s value chain. This agenda is divided into three sections, one more significant than the other; healthy & sustainable living, circular & climate positive, and fair & equal. 

The ratification of the Paris Climate Agreement was an important step towards the company’s attempt at a global coordinating action. So far the enterprise is already working with recyclable materials, provides solutions to water and energy efficiency, and gradually eliminates harmful chemicals or virgin fossil plastic.  IKEA’s social impact relies on the support of children’s rights, gender equality, social entrepreneurship, and inclusiveness. 

Unparalleled shopping experience

IKEA has mastered the art of destination marketing, redefining the customer experience and paving the way even in the post-COVID-19 era. Before social distancing and gathering restrictions became the new norm, the company’s physical presence altered the customer journey in more ways than one.

In-store amenities, such as children’s playrooms and the well-known IKEA restaurants serving Swedish delicious food, have played a very significant part in the company’s growth, recognition, and longevity. Last, but not least, we couldn’t omit the indoor structure of their stores, with its “showroom” architecture. This arrangement allows for proper product demonstration, fortifying the visitor’s shopping experience.

4 examples when IKEA’s omnichannel strategy skyrocketed customer experience

We have already highlighted how the pandemic expedited the already existing inclination towards the omnichannel experience. Making the implementation of a strong eCommerce strategy mandatory, many organizations changed their methods, IKEA included.

Example #1: Physical and eCommerce Integration

Ever so cautious, the company was very careful when they decided to actually expand their digital presence. Slow and steady wins the race, with IKEA firstly broadening its online product range, and then proceeding to the creation of high feature mobile applications, and digital catalogs.

Example #2: The Store Visits metric as IKEA’s main offline measurement solution

Store Visits is the epitome of the IKEA omnichannel strategy, measuring the impact online ad clicks have on their stores’ physicality. With the application of brick-and-mortar conversion rates and average basket values, the retailer estimates how their store visits are shaped by the use of mobile ads .  This is one of the tactics that make IKEA’s strategy an exceptional omnichannel marketing example .

Example #3: Buy online and pick up in-store model

IKEA’s Click & Collect service was available long before the unfortunate COVID-19 pandemic began, but was briefly paused, due to global government restrictions for non-essential retailers.  Luckily, collective inoculation will eventually allow consumers to resume their pre-crisis everyday activities, slowly but surely notwithstanding. 

On that note, the brand’s service is working like clockwork, with an entire ecosystem to support it. Clients place their order online, choose their preferred pick-up location and the company’s Customer Service department informs them accordingly when their purchase is ready for collection.

Some skeptics would say that this is not such a groundbreaking feature, though the brand begs to differ. IKEA’s physical presence is an exemplary location with specially designed spaces for the Click & Collect service and explicit signage. Of course, the company’s ready-to-assemble/flat-pack model is what makes this procedure easy and acknowledged by peers and customers alike. 

Example #4: IKEA’s innovative apps and the AR application that changed the digital furniture retail

The Scandinavian giant knows how to create original mobile apps and it shows. Apart from the  Click & Collect feature, the furniture retailer is determined to erase the gap between the offline and the online with many retail innovation methods.

IKEA’s mobile app, promoted as The Smallest IKEA Store, was designed to elevate the customers’ journey and form a seamless experience by providing a very useful functionality. According to stock levels and estimated deliveries inventory, the app offers incredible insights on item availability with a detailed index. This important piece of information offers customers the ability to estimate each product’s stock availability, organize their purchases, and always stay updated on shortages.

Additionally, the app creates wish and shopping lists and collects points for the IKEA loyalty program. The shopping list can be used either on the website or in-store, includes prices for non-subscribers or loyal members, and guides visitors where they need to go to acquire their items.

In total, IKEA lists three incredibly interesting and useful applications on its official website. The first was mentioned above while the second is based on IKEA’s sustainable philosophy, and it is named the IKEA Better Living App. The application offers green advice on everyday habits, logs the user’s behavior, and incentivizes the clients with a point-based reward system.

For those of us that love to shop online, measuring dimensions and imagining an appliance or a piece of furniture in our home space has always been a nightmare. IKEA saved us the trouble and conceived the revolutionary AR application, the famous IKEA Place. Using the magnificent properties of augmented reality, customers now have a definitive view of the products they desire before ordering them online.

All of us have wondered at some point if this chair will fit in our kitchen, or if we will even like it once we see it up close. The AR offers consumers a much-needed and much-appreciated complete visual of the IKEA catalog so that they can proceed with their order easier and with more confidence.

IKEA’s eCommerce website

As in all our case studies, we’ve analyzed 4 pages as templates of the company’s website to identify eCommerce best practices and mistakes you should avoid.

A. Analyzing IKEA’s Home Page

What we liked:

• Short, but informative and comprehensive: Minimalism for IKEA is not just an aesthetic direction at this point, it is a state of mind. The home page enlists three major and explicit categories in the drop-down menu located in the upper left corner, and the middle is divided into two spaces. All in all, the user can find everything, from store locations to the renowned IKEA services, easily, in no time, and without scrolling forever. 
• Sofia, the friendly AI:  Just like Boots , IKEA trusted the AI technology creating a friendly AI virtual assistant named Sofia. The easy-to-use chatbot is an extra bonus to the existing easy-to-use interface. 
• Sticky elements: An extremely useful feature including delivery tracking, login, the customers’ wishlist, and, of course, their shopping cart.

What we didn’t:

• No sign-up/entry pop-up: Sometimes users may find themselves irritated by the presence of pop-ups, but as a retailer or a CRM do not be alarmed. Surprisingly, pop-ups have an average conversion rate of 3.09% ; that is why consumers are hesitant at first, but in the end, they can’t resist the urge to subscribe.

B. Analyzing IKEA’s Category Page

• Compare, quick-add-to-cart, and quick-view functions: A very successful element is the quick features, as they make the visitor experience smoother and a lot easier. As far as the “compare” possibility is concerned, now this is amazing. Customers can compare up to three different products and estimate what suits them best without opening multiple tabs or searching endlessly. 
• Reward points: Each product includes the exact amount of points that the loyal members of the IKEA family will collect from their purchase. The company’s loyalty program offers different prices to its subscribers, making it all the more seductive. 
• Out-of-stock notifications: Interesting feature that lets the customers know when a product is out-of-stock, it offers simultaneously the option for a notification when available. 
• Recently seen section: The “recently seen” reminder is a nice way to increase AOV while keeping your customers engaged in your website a little longer.
• In need of more sticky elements on the menu: The presence of sticky elements is paramount due to its increase in mobile conversions. Besides the technical standpoint, it makes the interface more functional and cohesive.

C. Analyzing IKEA’s Product Page

• Credit card monthly installments: Customers always appreciate alternative payment options, and IKEA has made sure to present lenient options.  
• Availability per store: Location, location, location. Convenience is the mother of revenue and website users wish to know the whereabouts of their favorite products. 
• Relevant product recommendations: Divided into three categories: “similar products”, “other people also bought” and “especially for you”, the Swedish company invests in the boost of the average order value (AOV), personalization, and the need to create scarcity and demand.  
• Detailed product description: The product page includes everything; from dimensions to product guarantees, and of course, the most important info of all: the PDF assembly instructions. 
• Not enough visuals: Unfortunately, the IKEA product page does not have enough clear product photos. This can prove potentially harmful for the retailer and prevent potential buyers from completing their purchases.

D. Analyzing IKEA’s Checkout Process

• Delivery options and shipping charges: Apart from the Click & Collect service, visitors can place their postal code and schedule their online delivery. Both options are located in the Checkout menu and are really user-friendly. In the case of home delivery, the shipping costs are already included.
• Guest checkout : Always a favorite eCommerce best practice, the guest checkout alternative increases conversions and revenue. Approximately, 28% of the customers abandon their carts when asked to create an account.
• Bestselling recommendations: Another resourceful and frequent way to increase the AOV is product recommendations and the brand has done that incredibly well.  
• No exit-intent pop-up: An exit-intent pop-up is always eye-catchy and informative. It is also a very well-known eCommerce best practice that increases conversions by ~1-2%.

Interesting eCommerce technology and tools IKEA uses

Using the buildwith tool we scanned the Swedish conglomerate’s website and we highlighted the most impressive technologies spotted. 

• Microsoft Bot Framework : Sofia the AI was built with this framework. Great tool for constructing conversational virtual assistants. 
• Google Conversion Tracking: Free tool that monitors and analyses customer behavior towards the website’s ads. 

Some other interesting eCommerce tools that are worth mentioning, are the ones used by the top supermarket chains in the UK, like  ASDA with the Omniture SiteCatalyst and Hotjar, Sainsbury’s with the Pay@Browse and Screwfix with the Content Square & Bazaarvoice.

Retail technology that IKEA is missing

Apart from the tools we did find on the company’s website, we could not omit the ones that were missing. The IKEA omnichannel strategy would significantly improve with the use of a powerful marketing automation solution. 

• ContactPigeon: To fully nullify the distance between the offline and the online world, IKEA could include some of ContactPigeon’s unique key features. Integrating data from physical stores with online customer data and running omnichannel QR code campaigns would be a significant step in that direction.

Impressive IKEA stats you shouldn’t miss

To fully grasp the company’s reach in the global retail industry, we present you with some interesting statistics and facts about IKEA. 

• As of 2021, the Swedish group is valued at $48.1 billion and has stores in 55 countries around the world.  
• IKEA has 445 warehouses on a global scale.
• In 2020, more than 800 million people made their purchases from an IKEA store. 
• IKEA has 52 warehouses in 27 states in the US. 
• IKEA Canada operates 12 robots, 30 storage and retrieval systems, and a floor conveyor system that reaches 750 meters. 
• Germany has 53 IKEA stores and in 1974opened its first warehouse in Munich. 

Omnichannel leads you to the top

As you can imagine, the IKEA omnichannel strategy has been at the forefront from the beginning, even if Ingvar didn’t intend to at first. This success, undoubtedly, was the result of a consistent, carefully executed strategy across all channels, and customer touchpoints. 

Although, even in major cases like IKEA, where every part works perfectly towards a common goal, constant optimization and restlessness are very important. Omnichannel technologies evolve day by day, therefore keeping up to date with the latest technologies is essential. Customer retention and customer lifetime value (CLV) are immediate results of brand loyalty, and brand loyalty is based on customer engagement. 

ContantPigeon’s sophisticated platform is dedicated to building strong relationships between customers and the brands they love. Specifically designed for the retail sector, our company’s advanced automated features allow retailers and marketers to reach their audience through a wide range of channels. As one of the leading omnichannel marketing automation brands in Europe, we invite you to book a free consultation and explore in detail the benefits of a truly customizable platform. 

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IKEA's Winning Formula: An Analysis of IKEA's Marketing Strategy

Archana Karthikeyan , Bhoraniya Huda Hifzur Rehman

Ingvar Kamprad, a 17-year-old carpenter, founded IKEA in 1943. IKEA is a well-known global brand today. It began with the sales of pens, wallets, and jewelry to satisfy consumer needs at reasonable costs.

Today, IKEA focuses mostly on ready-to-assemble furniture, kitchenware, and home furnishings with the same motto. The introduction of furniture in the business model was done after five years of its inauguration.

IKEA now operates with 422 stores in 50+ markets. IKEA is a well-known furniture brand that has an extensive customer base in Europe with over 70% of its stores. Recently it launched 19 new stores. With recognizable logos, campaigns, and advertisements, Ikea has set a strong brand example with its marketing plan.

IKEA's success may be attributed in large part to its high-quality goods, reasonable prices, and DIY assembly philosophy. Additionally, the company's marketing plan is customized to be among the best in the industry, which also helps.

IKEA Target Audience IKEA Business Model IKEA Marketing Strategies

IKEA Target Audience

IKEA caters to the specific functional requirements of each target market , with a focus on people between the ages of 16 and 34. It has offerings for bachelors, singles living alone, newly married couples, families with children below 6, Older couples, the labor force, students, professionals, etc.

It caters to the requirements and preferences of a specific client segment that values affordability.

IKEA provides customized options to the client based on their shopping taste and also frequently repositioned the products and services in order to let the customer experience each and every detail of their products. With ongoing popularity, it is not inappropriate to say that IKEA reflects minimalism through its products.

IKEA Business Model

They employ a price-leadership tactic. Low prices serve as the primary pillar of the IKEA vision, business strategy, and philosophy. IKEA products are a spotlight for people looking for deals.

The foundation of its whole business strategy is pricing its product as affordably as feasible . IKEA's business strategy is centered on its goal of offering a wide selection of well-designed, functional home furnishings at prices that allow as many people as possible to afford them.

IKEA Marketing Strategies

One of the most profitable sellers of home furnishings and accessories in the world is IKEA. The business has established a solid name for its chic, cost-effective products and cutting-edge marketing techniques.

Product innovation, improving the customer experience, digital marketing , and sustainability programs are among IKEA's primary marketing methods. These tactics aid in ensuring that Ikea can continue to serve customers' demands ethically while still being competitive in the market for home furnishings.

IKEA maintains its position as a market leader and is well-positioned for expansion in the future by utilizing these basic methods.

1. Brand Identity

The brand employs a consistent and easily recognizable theme. The blue and yellow logo with the bold font was first published in 1967 and it has been consistent over the years.

The product names and colors are also easily recognizable.

It has also remained consistent with its original mission of high quality at affordable prices. IKEA which started as a seller of pens and wallets has grown into a globally acclaimed furniture store but stays strong about its mission. “To create a better everyday life for the many people”.

You must build your brand in a way that makes clients choose you over rivals. IKEA is extremely focused on this. Its goal is to take leadership of every household. IKEA puts the customer and the product first, something that many companies struggle to do.

If you produce what your clients desire, you may establish a strong brand identity. Your brand should be reflected in all of your actions. IKEA uses this tactic in its marketing . You won't have to think too hard to recognize this as an IKEA advertisement if you've been following IKEA for a long time

IKEA boldly displays its cultural history, from the national colors of Sweden painted on its buildings to the delectable meatballs served in its store cafeterias. It's better to flaunt your heritage!

Delivering a cohesive experience to your audience is made easier by brand consistency. It gives your offerings authenticity, increases customer confidence in your business, and distinguishes you from your rivals.

Because of its strong brand image, IKEA is quickly recognized. It has put in countless hours to create its reputation as one of the biggest furniture manufacturers in the world. Today, before consumers look at the products, it is the name that draws them in.

2. Product Innovation

The key to IKEA's commercial success is its product design . To produce well-planned, subtle, and useful goods, it draws on the democratic approach and the distinctive Nordic style. Consequently, in addition to being aesthetically pleasing, its homeware is also created to meet the demands and preferences of its target market.

IKEA furniture is well-liked by consumers due to its appealing designs and customization options. They fit into a tiny flat with ease and give your space a trendy, airy appearance.

IKEA supports versatility, individualization, and mix-and-match furniture modules. The secret to this achievement is the union of affordability and sustainability.

Keep in mind that you are essentially expelled into a warehouse after meandering around IKEA's eye-catching showrooms. The company's supply chain is streamlined and end-user prices are decreased by outsourcing some of the logistics and assembly to customers.

An excellent product design balances visual appeal and usefulness just perfectly. It ought to live up to your customer's expectations and provide the value it guarantees.

3. Clever packaging

What do you think helps IKEA provide quality products at much lesser prices than their rivals?

It’s their flat packaging!

It helps the business save on raw material costs of close to $175,000 and transportation costs of $133,000 annually.

Furthermore, by letting consumers assemble the furniture themselves, IKEA is able to deduct a percentage of shipping costs from their prices.

The flat packaging serves two purposes. Firstly, it reduces overhead costs and reduces the price of products. Secondly, its unique packaging makes it easily identifiable.

The company first developed flat packaging to save money and space, but subsequently, it evolved into its hallmark design. It now intends to increase the number of sustainable solutions to further cut costs by 50% while enhancing its brand.

Despite being a minor aspect of your company's operations, product packaging may significantly affect your earnings and brand reputation. Your packaging style may reduce costs, promote your brand, and boost sales all at once.

4. Vast User Insights

While some companies use chatbots to interact with their audience, IKEA uses them to learn more about its consumers. Instead of publishing dull surveys to acquire data, the research team instead offers engaging questions to make its audience's experience entertaining.

It makes the most of visuals and user interactions to collect updated information about its target market.

One Shared House 2030 is a survey that is a prime illustration of its insightful market research methodology.

IKEA conducted an interactive study to gauge public interest in shared living space design. Not only did it receive a significant response, but it also discovered that by 2030, about one in three city dwellers will likely choose co-living.

In order to better understand its customers' demands, IKEA uses digital media, sophisticated technologies, and interpersonal interactions.

Your marketing plan is built on the foundation of your preliminary study. It enables you to develop a data-driven action plan and comprehend your prospect's demands.

While traditional surveys do yield useful information, IKEA has shown us that there is another, more effective approach to identifying our customers' problems.

5. Excellent In-store Experience

IKEA excels in product displays and understands how to present products in the best possible way to increase sales.

In order to stimulate decorating ideas and promote impulsive purchases, it carefully arranges the best-matched objects in mock rooms.

It gives guests a memorable experience that entices them to return by having aesthetically pleasing décor and first-rate customer care.

IKEA's structure, in contrast to typical stores, has a single-route architecture that guides you step-by-step through its full product line. There is a cafeteria to take short breaks while on a shopping spree! The cafeteria has delicious food to make the shopping experience more memorable.

The design purposefully takes the shape of a maze to maximize product exposure and extend visitor stay.

6. The food Court Experience

The IKEA store has lavish Swedish restaurants in all their stores. The IKEA Restaurant offers delicious food at great prices, making it a great place to visit for a quick snack or a leisurely meal.

The food court features an array of Swedish-style dishes, local specials, and a range of healthy, organic, and vegetarian options that cater to the whole family. Whether you’re looking for something tasty on the go or a cozy spot to enjoy some delicious food with friends and family, the IKEA Restaurant is sure to have something for everyone.

This tactic accomplishes two goals at once: it gives consumers a positive shopping experience and lures in new customers who come to the restaurant to check out the store. Additionally, it serves as another source of revenue.

7. Content Marketing

To stand out from other furniture businesses, IKEA has always turned to its content marketing approach.

The attention-grabbing substance of all of its advertisements, whether they appear in print ads, television commercials, or social media posts, stands out. In order to create advertisements that catch people's attention and motivate them to purchase its products, it combines humor, creativity, and its brand core values.

To boost its brand, IKEA also makes significant investments in direct marketing. It has been successfully employing one of its most popular tactics, the product catalog, for the past 70 years.

One of the most difficult components of marketing is surely regularly producing content, especially hilarious material. But it also produces three times as many replies as other forms of advertising.

8. Adapting to advancements in technology

IKEA has transformed from a modest Swedish retailer to a global brand by keeping up with trends and embracing new technology.

In order to make its products more accessible to its audience, it has revolutionized the retail experience over time by digitizing its processes.

It has always employed newer technology like Augmented reality(AR) and Virtual reality (VR) to provide a better customer experience . These technological advancements help customers check out the products, their functionality, and their use in the customer’s space.

People download its 3D modeling program mostly to visualize their ideal home.IKEA can upsell its low-demand products by inspiring consumers to redecorate the area, one of its most effective marketing strategies.

IKEA's marketing strategy is multifaceted and effective. They prioritize offering low prices to their customers, while also promoting self-serve shopping, introducing new innovative technology, focusing on the food court experience, providing more accurate packaging, etc.

Additionally, IKEA has made a significant investment in digital marketing to stay relevant and reach a wider audience. All of these elements combine to create a unique brand identity for IKEA that resonates with consumers around the world. Overall, IKEA's marketing strategy has been successful in establishing them as a global leader in home furnishings and retail.

Who is IKEA's target market?

IKEA's target market is the global middle-class group and those falling between the 20-34 age group.

What is IKEA's unique selling point?

IKEA's most unique selling point is its low prices on unique and flat-pack furniture that can be easily delivered to different locations.

Who is IKEA's biggest competitor?

The biggest competitor of IKEA is Walmart.

How does IKEA engage with its customers?

IKEA follows multiple ways to be in touch with its customers. Some of the common ways used by IKEA are to visit them at home, be in touch through an online platform, present them with in-store options, and also through the IKEA family. IKEA also uses AI and virtual reality to make the process more fruitful.

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What IKEA Do We Want?

By: Juan Alcacer, Cynthia A. Montgomery, Emilie Billaud, Vincent Dessain

In 2018, Swedish furniture maker IKEA was undergoing a significant transformation. Challenged by the rise of online shopping and changing consumer behavior, and mourning the death of its founder, the…

• Length: 34 page(s)
• Publication Date: Jun 16, 2020
• Discipline: Strategy
• Product #: 720429-PDF-ENG

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In 2018, Swedish furniture maker IKEA was undergoing a significant transformation. Challenged by the rise of online shopping and changing consumer behavior, and mourning the death of its founder, the Company's top executives knew they had to step out of their comfort zones and embrace new strategic initiatives to stay relevant. But which initiatives, executed where, when and how, would enable IKEA to achieve its goals in a way that was profitable while creating an IKEA they would want to pass on to the next generation of co-workers and customers?

Learning Objectives

Strategy Identification and Evaluation: Learn to identify the key elements of a firm's strategy, and why it is effective or ineffective. Students are asked to identify IKEA's historic strategy, its key supporting elements, and what made it successful for so long. Added-Value: Learn to de-compose a firm's added-value. Did IKEA increase customers' willingness to pay, reduce the total cost of supply, or both? How did it do it? Environment and Competitive Analysis: Understand the key factors in the external landscape that impact a firm's success and the ways those factors can change over time. What is notable about the macro environment, the furniture industry, and consumer behavior and preferences at the time IKEA's initial strategy was developed? Globally, what has changed? What are the implications for IKEA? Change at an Iconic Firm: Iconic firms are set apart by their distinctiveness. Often, their strategies are developed over years and reflected in a host of unique, interconnected elements, a system of advantage. This case gives students an opportunity to consider when, as a leader, you might want to change a strategy, or key elements of a strategy; the possible risks and benefits of doing so; and how one might want to proceed.

Jun 16, 2020

Discipline:

Geographies:

China, India, Netherlands, Sweden, United States

Industries:

Retail and consumer goods

Harvard Business School

720429-PDF-ENG

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IKEA Marketing Strategy and practices: A Case study

Ikea marketing strategy, introduction:.

Building a global brand is not an easy task. While excellent product quality and affordable prices can be good for penetrating new markets, the way a brand is marketed decides its fortune in the long term. In the global environment, success rests especially on marketing. IKEA is a well-known global brand of home furnishing products. Behind its global presence and excellent performance is an excellent marketing strategy. However, IKEA has not achieved its success without being through its fair share of troubles. It too has experimented and been through ordeals before being successful in the foreign markets.

Cultural sensitivity has grown important in the 21 st century. The one size fits all strategy will not work any more. IKEA too had to face cultural hurdles while trying to penetrate new markets. Today, it is a highly recognized brand and behind it is the power of marketing. The Swedish brand of furniture sells a wide range of home furnishing products. Its affordably priced but good quality products have grown popular in several countries globally. This is an analysis of the marketing strategies and techniques IKEA utilized to achieve global success.

Store design and location:

IKEA sells more than 9500 products from its stores. For such a large range of products, a brand must also have excellent store design. This does not just increase shopping convenience for the customers, but provides a pleasant experience and helps create a great brand image. If shopping from a store is an exclusive experience in itself then more and more customers would like to visit and revisit. Traditionally, the IKEA stores have been like warehouses located outside the town where customers can shop in peace. However, rising urbanization and e-commerce have made IKEA experiment with new formats. It introduced pick up points, small stores and inside the town stores. The pick-up points are for the online customers from where they can pick-up the products they ordered online.  The smaller stores are built in towns where a full size store may not be necessary. These stores showcase a limited range of products. The third type, full size inside the town stores with transporter bikes are being opened at city centers in the large towns. However, IKEA has designed its stores in a manner to provide its customers with an unforgettable experience.

Their maze like design provides a unique experience. There are maps to guide you through the labyrinthine stores so no customer feels lost. Its stores’ design is a primary attraction and apart from customer convenience it helps at customer engagement. Both these factors have grown important to marketing a retail brand successfully in the 21 st century. Inside the stores there are tiny model homes so the customers can borrow ideas for ;interior decoration. They can grab ideas from the models at IKEA store. There is also space for you to drop your kids or have lunch if you are feeling hungry. The IKEA cafeteria serves cheap yet good quality food. In this way, IKEA has designed an entire experience inside its stores that maximizes shopping pleasure. The purpose is to engage the customers and attract and retain them in larger numbers. Such an experience also creates a lot of favorable buzz for IKEA.

Target market:

The target market of IKEA is mainly the global middle class. It sells good quality and durable but affordable home furnishing products. The middle class consumers generally look for products that are good in terms of design and quality and come for low prices. It is also a reason behind the increasing presence and popularity of IKEA globally.  The consumer demographics are also changing globally and the focus is now on the millennials. However, IKEA sells contemporary and stylish designs that are a big favorite among the millennial customers.  Through its affordably priced and good quality products, the brand has been able to attract the millennial and middle class consumers in large hoards. It complements its products with a great customer friendly shopping experience.

Promotional techniques:

IKEA uses a variety of promotional techniques to promote its brand. Most unique and most successful among the tools used by IKEA to promote its brand are the promotional catalogs. It is also the most used and most effective of all its marketing communication channels. These catalogs of IKEA products are printed in several languages and different catalogs are served in different markets. Apart from unique home furnishing ideas, there are real life stories and a wide range of products showcased through the hundreds of pages of the catalog. The catalog is available both in print and online. Apart from that an extended version of the catalog is available in the IKEA app. The IKEA websites, publications, brochure, advertising and public relation campaigns are also used for the promotion of the brand.

IKEA uses both traditional and digital channels to advertise and promote its brand.  It has used social media to attract and engage customers. Separate country pages are used to engage customers on Facebook. Pinterest, Twitter, Google plus and other social media channels are also used by the brand to promote itself. From time to time, it also uses well designed outdoor campaigns for promotion. Now, IKEA is using augmented reality to help customers get a better experience of how well IKEA products fit into their homes and lives. Another key area where IKEA has focused to build a better reputation is sustainability. People and environment are an important focus area at IKEA. This has helped it build a stronger brand image.

Brand localization:

When IKEA started expanding to overseas markets, it did not outright see the kind of success it expected. It researched to find out the reason. The reason was that people’s taste, style and preferences varied from market to market and culture to culture. It was not essential that the furniture or the glasses popular in Sweden were going to be loved in the US or UK too. So, IKEA decided to bring changes to its products and marketing techniques and adapt them to the local markets. It studied local cultures and their preferred styles before introducing products in new markets following which its products started selling and growing popular. From product designs to its catalogs all are developed keeping local culture and tastes at the center. Brand localization has helped IKEA find quicker success in the overseas markets.

CSR and Sustainability:

Apart from everything IKEA invests in CSR and sustainability to improve its image and reputation in the society and among its customers. While investing in CSR and sustainability is good for the planet and for the future of the communities, it is also good investment in a brand’s reputation and helps engage the customer audience better. It is investing in healthy and sustainable living, energy and resources as well as people and communities and governance and ethics. It starts with making more sustainable and affordable product range. Sustainability is one of the five dimensions of democratic design at IKEA.  By investing in more sustainable products the brand is investing in a  greener future for the brand. Apart from these things, IKEA is working to improve the condition of migrant workers as well as that of social entrepreneurs and children in disadvantaged communities. Its publishes its efforts .and investments in CSR every year in the for of an annual publication in its annual CSR report. The brand has also partnered with Save The Children for the protection of the children’s rights and to prevent child labor and promote the welfare of children globally. The two organizations are working together to address the root causes of child labor in several parts of the world including India and Pakistan. IKEA also raises money to provide quality education to children from disadvantaged classes. Over the several years along with Save the Children and UNICEF, IKEA has reached out to more than 11 million children in 46 countries providing them quality education and saving them from utter poverty. Involvement in such programs globally has helped the brand grow a strong reputation and create a better image among its customers and the community.

Controversies:

All has not been so easy for IKEA and it faced several big challenges on the way. Primarily, the challenge of culture and adapting to suit local cultures has been the biggest one. In 1994, IKEA had to face significant protests and criticism for using ads casting gay couples. Again, it has faced severe criticism for not casting women in its Israeli catalog. “The male-only catalog featured ultra-Orthodox models (wearing sidelocks and kippah hats) and highlighted items in demand among ultra-Orthodox families, such as bookshelves carrying extensive collections of books on Jewish law, and folding tables and beds meant to accommodate visitors during big family gatherings on Jewish holidays”. (DW, 2017) The cultural challenges abound and one or another challenge always troubles the international brands like IKEA. While designing and printing its catalogs, IKEA has to ensure that they rhyme with the local culture and flavor. It is not just IKEA, several other brands too have born the ire for using culturally offensive material for advertising.

Conclusion:

Today, IKEA is a successful brand. However, the power of marketing is evident behind its success. One key thing that is important to focus when operating in a global environment is cultural sensitivity. IKEA has responded to the cultural challenges by using product designs and marketing techniques that suit the local markets. Most important things to be successful in any market are product quality and pricing strategy . IKEA has managed these two factors very well. Its products are not just affordable but also of great quality. Apart from that, IKEA has complemented it all with great customer convenience and tried to engage shoppers in the best possible manner. Its catalogs are its main medium of marketing communication. Print and digital channels also play an important role in the marketing of  its products and promote its brand. It has also released an app and is using augmented reality to provide customers with a better experience. IKEA’s case suggests that marketing in the international environment requires intense focus and apart from advertising you must engage your customers better.

Abhijeet Pratap is a passionate blogger with seven years of experience in the field. Specializing in business management and digital marketing, he has developed a keen understanding of the intricacies of these domains. Through his insightful articles, Abhijeet shares his knowledge, helping readers navigate the complexities of modern business landscapes and digital strategies.

Ikea Branding Strategy and Marketing Case Study

Analysis and examples of ikea’s identity, positioning, key messages, tone of voice, brand archetypes, customer benefits, competitors, and marketing content..

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Brand Overview

• Home and Garden

Business Type

Physical Products

https://www.ikea.com

Target Customer

Budget Home Shoppers

Primary Need ( Job To Be Done )

Furnish my home with goods that are fashionable but affordable

Brand Visual Identity & Content

Primary brand colors, brand typefaces, hero content.

Hero Content Type

Content features people, brand messaging, key messages, benefit or feature focus, tone of voice, brand archetypes.

( Learn More About Brand Archetypes )

Everyperson

Brand Positioning Strategy ( Elements of Value )

( Learn More About The Elements of Value )

Aspirational

Self-Actualization

Design & Aesthetics

Reduces Cost

Brand Benefits

Ability to furnish everything I need in my home at one single shopping location 

Access to modern and trendy design aesthetics at extremely affordable pricepoints

Consistent, well thought out assembly instructions to get new furniture ready to use quickly

Competition

Key competitors.

Target, Wayfair, Amazon, Lowe’s, Home Depot, Ashley Furniture, Cost Plus World Market, Floyd

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Liquid Death Marketing Strategy: A Case Study for Branding Success

• Amelia John
• Published: November 7, 2024
• 7 minute read

Table of Contents

About the Report: This report provides an in-depth analysis of Liquid Death’s performance on Amazon in October. It analyzes the company’s marketing strategy, sales trends, product performance, and ratings across 22 products and nine categories.

• Introduction

Imagine your everyday drinking water just got a punk rock makeover. Liquid Death marketing strategy did just that. It slayed its dull bottled water rivals with two main strategies: no plastic and no bland branding. 

These guys took one look at the generic bottled water aisle and thought, “Nah, we can do better.” Instead of sleek, clean designs, they went full death metal, packing their water in tall, black cans with skulls and calling it Liquid Death. 

It’s not just a gimmick, either. Liquid Death drinking water comes in eco-friendly aluminum, delivering a brutal blow to plastic pollution. They’re not here to politely quench thirst; they’re here to “Murder Your Thirst” and start a movement.

• Origin of Liquid Death

Liquid Death was founded by former Netflix creative director Mike Cessario in 2017 as a response to the dull, corporate feel of most bottled water brands. 

He tapped into the idea of selling canned water that not only “murdered your thirst” but also stood up against plastic pollution with a punk rock and anti-establishment edge. 

This approach helped Liquid Death capitalize on two distinct values: environmental sustainability and rebellious identity. This made the brand unforgettable in a market typically driven by health-focused messaging and minimalist design. 

By presenting itself as an edgy lifestyle brand, Liquid Death quickly carved out a niche and grew to an estimated value of over $1.4 billion, which is impressive for a comparatively new brand.

This is where the importance of product page optimization through digital shelf analytics software becomes relevant for e-commerce brands. Product pages are the ideal site for communicating your brand narrative to consumers so that they can align with your brand’s vision. 

READ MORE | Looking to boost your digital commerce sales? Check out our blog on How to Increase E-Commerce Sales?

• The average price of Liquid Death products on Amazon is $14.23. 
• The most expensive Liquid Death product on Amazon is Still Mountain Water, 16.9 oz Tallboys (18 pack), which costs $50. 
• Dead Billionaire Iced Tea is the only Liquid Death product to rank first in the Amazon Bestseller Category between October 2nd and 8th.
• Liquid Death Products have a total review count of 392K, with a seller count of seven. 
• Liquid Death is a brand known for its mountain spring water packed in aluminum tallboy cans, which gives it a bold and edgy aesthetic.
• Why Liquid Death Marketing Stood Apart

Liquid Death’s branding and marketing strategies break all traditional rules, with campaigns designed to surprise, entertain, and sometimes shock its audience. 

These strategies include:

Death Metal & Drinking Water

Liquid Death’s name, skull logos, and bold can designs give it the look of an energy drink rather than a water brand, challenging conventional packaging norms. 

The brand created viral content featuring anti-corporate messages and rebellious humor. They even collaborated with famous figures like Tony Hawk and Martha Stewart in unusual and memorable ways. 

For example, they released a skateboard deck infused with Hawk’s blood to reinforce their “killer” brand image, a stunt that won significant attention and loyalty.

Creating a brand voice that your target consumers can relate to and maintaining the narrative through online and social media requires a deeper understanding of the consumer buying process . 

Subverting Traditional Marketing

Instead of traditional advertising, Liquid Death’s brand strategy leaned into content creation that entertained its audience with humor and shock value, positioning it more as an entertainment brand than a water brand. 

Campaigns included releasing albums based on online hate comments, collaborating with metal musicians, and even setting up a “Sell Your Soul” booth at Bonnaroo. This approach appeals to younger audiences by pushing boundaries and embracing a culture of counter-marketing. 

By challenging standard norms and effectively capturing the attention of Millennial and Gen Z consumers, brands can appeal to these dominant economic groups, who place a lot of importance on the brands they prefer buying. 

So, e-commerce brands must monitor and analyze their target consumers’ choices and perceptions. Review monitoring software with advanced analytical capabilities, such as thematic review analysis, can be of perfect assistance. 

The Eco-Conscious Brand

Sustainability is woven into Liquid Death’s brand DNA, with initiatives like #DeathToPlastic and an all-aluminum can that promotes infinitely recyclable packaging. 

Liquid Death commits 10% of its profits from specific products to clean ocean plastic pollution, aligning with the values of its audience, which includes environmentally conscious Millennials and Gen Z. 

This eco-friendly stance adds depth to its irreverent brand voice and resonates with consumers who want their purchases to have a positive environmental impact.

• MetricsCart Experts on Liquid Death’s Target Consumers

By understanding the preferences of Millennials and Gen Z, Liquid Death brand strategists developed an unconventional marketing playbook. It didn’t just create a brand value. 

It also focused on communicating a lifestyle choice for its consumers that deviates from the usual branding techniques of “gentle” and “pure” adjectives associated with drinking water.   

Gen Z values authenticity, humor, and companies that stand up for causes they care about, making Liquid Death’s approach appealing to them. Through digital channels like TikTok, Instagram, and its e-commerce channels, the brand engages consumers in a way that’s less about advertising and more about building a community around shared values. 

This focus on audience engagement has earned millions of followers for Liquid Death and turned it into a brand that people not only recognize but want to associate with.

Even on a super competitive platform like Amazon, Liquid Death secured the Best Seller badge in just three months. Ryan Dietrich, a retail media and technology expert, observed that Liquid Death cracked the Amazon algorithm by driving external traffic to Amazon. They redirected their customers to Amazon when they clicked the “Buy” button on their website. 

READ MORE | Curious to know about Gen Z shopping habits? Check out our blog Decode How Gen Z Shops on Amazon: Supercharge Your Brand’s Sales Today 

• Most Expensive Liquid Death Product on Amazon

Liquid Death Still Mountain Water is the most expensive product on Amazon, at $50. It is considered to be one of the brand’s most iconic products.

This is followed by others like Iced Black Tea Mixed Pack (24 x 19.2 oz King Size Cans) and Martha Stewart x Dismembered Moments Candle, which are priced at $43 and $40, respectively, in second and third place.

Following Amazon’s dynamic pricing, the average price of liquid death products changed within low margins during the analysis period. The highest average price was recorded at $15.4, and the lowest was $13.1.  

• Most Popular Liquid Death Product on Amazon

According to experts at MetricsCart, Still Mountain Water, 8-Pack Natural Minerals & Electrolytes is the most popular Liquid Death product on Amazon, with 289 K total reviews and an average rating of 4.6.

The second most popular Liquid Death product is Dead Billionaire Iced Tea, 8 Pack, Half Lemonade Half Black Tea Sweetened with Real Agave, which has 53K reviews and an average rating of 4.4.

During the analysis period, the experts at MetricsCart saw a consistent increase in the reviews of Liquid Death products on Amazon. This shows how consumers are regularly engaging with the brand and buying their products on the online platform.

• Liquid Death Flavors Available on Amazon

MetricsCart experts found that Liquid Death offers around 14 different flavors on Amazon. Mountain Water- Still flavor has the highest product number, 24, and Unflavored has the fewest.

Mango Chainsaw Flavored comes in second place with 16 products. Overall, Liquid Death’s wide variety of flavors increases consumer’s confidence in the brand. 

• Liquid Death Products with Top Amazon Best Sellers Ranking

Still, Mountain Water, 8-Pack (King Size 19.2 oz Cans) Real Mountain Source, Natural Minerals & Electrolytes was ranked 11th in the Amazon BSR under the Grocery & Gourmet category and second in the Still Water category.

The Still Water category ranking for this product remained consistent throughout the analysis period, which shows its popularity among consumers.

Liquid Death’s bold marketing, innovative packaging, and commitment to sustainability transformed it from a mere canned water brand into a movement. By defying norms, it captivated an audience eager for brands with personality and purpose.

Did Liquid Death impress you? Do you think your brand can be the next big thing in digital commerce? A digital shelf analytics solution will make this job easier for you by providing you with the essential insights needed for e-commerce success. 

While creative marketing helps grab attention, MetricsCart ensures product page optimization, price monitoring, and consumer feedback analysis are done right so that you can stay on track. 

Any brands looking to create a presence on the digital commerce platform should also align their brand messaging with their consumers’ interests and trends. This can depend on multiple digital shelf factors, such as pricing, product descriptions, competitor analysis, etc.  

Digital shelf analytics software can be an invaluable partner for brands looking for a breakthrough. It offers tools for optimizing digital shelf performance, managing reviews, and maintaining a consistent brand narrative online.

Disclaimer: MetricsCart is the exclusive owner of data used in the Digital Shelf Insights reports. Any kind of third-party usage entails due credit to the source material.

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• Published on: November 7, 2024

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