Why is IKEA so successful? IKEA brand deep dive cover image
Brand Deep DivesJuly 29, 2022

How IKEA Leveraged Brand To Become A Global Behemoth

July 29, 2022
Ashley Lightfoot Photo
Ashley Lightfoot
Content Marketing Manager

The IKEA experience is, for many consumers, a rite of passage. For those who’ve just bought a home or have relocated, a trip to one of its gigantic blue stores can feel like an essential part of “moving in” — and it's something consumers have in common from Burbank to Bangkok, Columbus to Cairo.

It’s no secret that IKEA is a successful brand — no other supplier of furniture or household essentials even comes close to commanding the type of influence that it does. Referenced in films like Fight Club and 500 Days of Summer, American consumers, in particular, have openly embraced this unique Swedish import.

And so much is unique about this brand — particularly its customer experience. Weaving through its labyrinthine aisles or walking through its film-set showrooms, filling the shopping cart with products that have unpronounceable names, ordering a plate of Swedish meatballs, and then assembling the flat-packed furniture at home in a mess of screws and hinges.

IKEA has used its colossal cultural footprint to slowly conquer the market in household essentials, branching out from flat-packed furniture to become a one-stop shop for everything a house needs — from home goods such as fridges and dishwashers to mattresses.

But how did a plucky Swedish furniture company pull off such a startling feat of market domination?

In this brand deep dive, we’ll take a look at the story behind IKEA and discover how it leveraged its unique brand and customer experience to win over consumers in diverse markets and establish itself as the name in furniture and household goods.

Humble Beginnings

It all begins with Ingvar Kamprad — raised on a farm called Elmtaryd near the town of Agunnaryd in Sweden (Ingvar, Kamprad, Elmtaryd, Agunnaryd). An entrepreneur at a young age, Kamprad sold whatever he could get his hands on, such as matches, pens, wallets, and belts. As a graduation present, his father paid the registration fees for his fledgling business, a mail order service selling general goods to the surrounding rural areas.

Indeed, IKEA had humble beginnings, far removed from its current size and stature — Kamprad even had to hire a milk van in order to make those first deliveries. Five years on from the official registration of IKEA, Kamprad added furniture to his brochure as an experiment, to gauge whether there was any demand for such products from his clientele. It was so successful that, by 1951, it was the focus of IKEA’s business.

The low prices at which IKEA was selling its goods made many consumers dubious. Kamprad felt that they needed a way of seeing the goods in order to see that the low price did not come at the cost of quality. Thus, a showroom was opened in 1953 and seemed to do the trick — so successfully, in fact, that by 1958 it made sense to open a store, which Kamprad did in the town of Älmhult.

A Self-Assembled Revolution

One by one the hallmarks of the IKEA brand were born out of the ingenuity and adaptability of Kamprad and IKEA’s other employees. Flatpack furniture began with the leaf-shaped Lövet table in 1956 but came about simply as a solution to shipping bulky items that wouldn’t always fit in customers’ cars. Soon after, the company added a dining option when “Kamprad noticed customers would leave the Älmhult location empty-handed if they were hungry.”

A fire at the brand’s flagship store in 1970 actually provided an opportunity to rebuild better and improve on a number of issues that had been dragging down the customer experience. One key change was to allow customers into the warehouse to pick out their own items, “streamlining the selection, delivery, and checkout process”.

The 1970s marked the beginning of the brand’s expansion, which has only intensified over time. This growth was so frantic that executives in Germany accidentally opened a store in the wrong town — Konstanz, rather than Koblenz as intended. This continued into the 80s — when the brand adopted its now iconic blue and yellow colors — through to the 90s and beyond.

As it grew, more and more consumers filled their homes with IKEA products and the brand began to worm its way into popular culture. The “IKEA effect” probably played a part in helping the brand form this oversized relationship with consumers.

Put simply “people tend to value an object more if they make (or assemble) it themselves.” That cheap new coffee table made of recycled wood chips squished into boards isn’t just an IKEA table, it’s _your _table. This, paired with the brand’s unique Swedishness, helped it grow from a furniture supplier to a whole brand experience.

Embracing The Future

While IKEA’s strength certainly lies in its in-person experience, the brand has only slowly embraced the possibility of selling its products online. Though doing so might risk diluting its famous brand experience, it also represents a huge opportunity to reach more consumers and provide increased flexibility.

IKEA held out until 2018 before it appointed its first-ever chief digital officer, Barbara Martin Coppola — by this point, IKEA’s leadership was eager to speed up the pace of change and Coppola was given a mandate by CEO Jesper Brodin to “change almost everything”.

Over the last few years, more and more of its product range has been available online in selected markets — as a result, online shopping has jumped up to now comprise 26% of IKEA’s total revenue.

While this jump can likely be attributed to the effects of the COVID-19 pandemic, which forced IKEA to close its brick-and-mortar stores and rely solely on its online operation, the brand’s ability to so quickly pivot from a strictly offline business model was due to prior investment in diversifying its offering.

Beyond this, the brand plans set to keep on adapting with a slew of policies aimed at future-proofing its business. Not only has the brand pledged to be climate positive by 2030, but it’s also testing the plausibility of rental programs and researching “how to make their wood products’ life cycles circular”. This would allow old products that might otherwise be thrown away to be repurposed into new pieces of furniture — two initiatives that could lower the impact of the brand’s products on the environment.

With IKEA expanding its services into all manner of household goods, to become a true one-stop shop for new homeowners, movers, landlords, and fans of meatballs — it looks that the future, for the time being, is sure to stay flat-packed and distinctively Swedish.

But what lessons can you learn from IKEA’s quirky brand? Let’s find out.

1. Leverage The Diderot Effect

Have you ever bought a new item of clothing and suddenly find that all of your old clothes now seem old and boring by comparison? This is exactly what happened to French philosopher Denis Diderot when he was gifted a luxurious new dressing gown — so much so, in fact, that he put himself into debt by splurging on products that matched the elegance and style of his new possession.

This is the eponymous Diderot Effect in action and it’s something that IKEA’s matching product ranges perfectly leverage to encourage consumers to fill their shopping carts.

While it’s easy to view this in a cynical way, as an example of consumerism running out of control — for IKEA, it represents the success of its brand in becoming a truly one-stop-shop destination with an exhaustive range of products and, despite its low price points, fostering an aspirational element in its identity.

This has allowed the brand to become a dominant force in household goods. If a consumer is outfitting their kitchen, they can choose from a series of unified looks and buy as many items from that collection as they want — including items originally reserved for specialist brands, such as washing machines and dishwashers.

The weaponization of this effect is clear as day in IKEA’s “Silence The Critics” campaign, which demonstrates the transformative power of a whole range of products on a tired-looking living room.

An expansive product range is the first step to achieving this — if your main product or service is used in tandem with another, it makes perfect business sense to allow consumers to buy the whole package at your store. But then your marketing and brand need to make this clear.

Leveraging the Diderot Effect means upselling customers to “complete the look” while using your campaigns to flesh out your entire range to represent an idealized lifestyle.

2. Weird is Wonderful

A huge part of IKEA’s success comes from its unique and somewhat idiosyncratic customer experience and brand identity. In embracing its Swedish roots proudly and celebrating that it offers a unique way of purchasing items for the home, IKEA has created an iconic brand that has wormed its way into the popular culture of many of the markets it has expanded into — particularly the US, UK, and Germany (its biggest market).

A similar effect has happened with the expansion of German budget “supermarket” Aldi into the US. While its key selling point is its low price points, the fact that Aldi does things differently has gained it something of a cult following.

Indeed, as a CNN report put it, “New customers may be jolted at first by the experience of shopping at an Aldi… Shoppers need a quarter to rent a shopping cart. Plastic and paper bags are available only for a fee. And at checkout, cashiers hurry shoppers away, expecting them to bag their own groceries in a separate location away from the cash register.”

By importing an unconventional customer experience, Aldi, just like IKEA before it, has managed to make an oversized impact on consumers, and is now on track to become “America’s third largest supermarket chain”

Leveraging the unique identity of your hometown or country of origin is a great way of creating a brand that is distinct from the competition and is something that IKEA does with aplomb. You can read more about other brands that do this to spectacular effect here.

For your own brand, daring to be a little peculiar — at least in comparison to the competition — can sometimes pay dividends. Use your brand identity as a means of celebrating your product’s idiosyncrasies and you’ll not only stand out from the crowd but you’ll stand a real chance of forming stronger bonds with consumers.

3. Take Extra Care When Expanding

Although IKEA's expansion has, at times, been dizzying and chaotic, the brand has worked hard to earn its reputation as a place where consumers can purchase everything for their home under a single roof.

Being a one-stop shop might offer more convenience, but consumers still understand that it can often come at the expense of quality and expertise. A specialist brand that deals only in a particular product, such as mattresses, will likely command a greater level of trust from consumers.

IKEA, which already has a somewhat muddled reputation when it comes to the quality of its products, has had to take extra care to convince its customers to abandon the specialists and purchase with them.

While the aforementioned Diderot Effect might play a part in this, generally, IKEA works hard to match the level of expertise that a consumer might expect from a specialist provider. Sticking with mattresses, the IKEA webpage covers a wide range of topics relating to this product — addressing all the concerns, questions, and considerations that consumers might have when purchasing such a specialist product.

Expanding the impact of your brand, growing it into new markets, or trying to reach new types of consumers will usually mean stepping on the toes of a brand that has already planted its flag in this territory. In these cases, remember that, as a new player, you need to build consumer trust — but with an in-depth content strategy, like that displayed by IKEA, you can easily put your consumers’ misgivings to rest.

Final Thoughts

IKEA offers a range of interesting lessons that demonstrate the importance of building a strong, distinctive brand. In managing to be both affordable and aspirational, while also taking ownership of its shortcomings and turning them into something that it openly celebrates, it has managed to capture a huge slice of the furniture and home essentials market. And it has done this while being wonderfully weird.

Indeed, IKEA also offers a masterclass in how to take an idiosyncratic import and make it something that consumers can relate to whether they’re American, African, European, or Asian. And while it might have its critics, the expansion of IKEA into every room of the house represents a brand success that is definitely worth unpacking.

Brand Deep Dives

Related Articles

Image of Veganz bar
Brand Deep Dives

Veggie-Mania: How Veganz Hooked German Consumers on Greens

What’s fueling Veganz regional success? How can other vegan-friendly or vegan-curious FMCG brands connect with new target audiences? Here’s our strategic brief.

Elena Author Photo Framed

Elena Prokopets

Freelance Writer & Content Strategist

How Branding Has Evolved with an old-fashioned Coca-Cola ad (Thumbnail)
Brand Strategy
Brand Deep Dives

How Branding Has Evolved: An Infographic

Ever wondered how much branding has changed over the years? This handy infographic will give you a helpful retrospective!

Cory Profile Picture

Cory Schröder

Senior Content Marketing Manager

Free Brand Insights and Tips

Sign up for our Newsletter to receive free, insightful tips on all things brand!