Home improvements have become a national obsession. The success of TV programs like Lifestyle and Home Improvements highlights a nation of budding builders, painters and decorators – all looking for the ultimate smarthouse products. Many of them head towards the nearest Ikea branch.Cashing in on the home improvements boom is Swedish furniture giant Ikea, whose stores are springing up all across the country. They have built a reputation for delivering smart design at an affordable price.
As well as its furniture, Ikea is famed for its unique store layouts and queues, where you walk in at one end and stroll through a smorgasbord of the latest in home furnishing, ranging from the home assembly kits to the latest in smarthouse storage. Some families, in fact, tailor their weekends around a trek to Ikea.
Ever since I visited an Ikea store in Europe many years ago, I have been fascinated as to why this organisation is so successful. Its selling methods are unique, the products outstanding for the price and they have an impressive information architecture going on with everything they do.
It’s all in the flow
If you haven’t done it before, try walking into an Ikea store. The first thing you notice is that everything flows one way and is split into smarthouse sections. If you follow the crowd entering their stores you will find that the set purchase displays actually work. You can encounter bin after bin of toilet plungers, pizza cutters and CD holders. These seem to also be roughly laid out according to the rooms in a house, and reminded me more of a regular department store.
All items are clearly labelled with a unique identifier, a style and, strangely enough, the name of the designer. I couldn’t fathom why this was important. Perhaps they like to recognise their designers? Super. Then, later on, I found myself searching for styles similar to one I’d been looking at earlier, and realised that this was just another possible way of organising their material.
Similar to how clothing department stores organise their stock, Ikea is one of those companies that has survived in the cutthroat world of home furnishing products, from space-saving cabinets and smart lighting to the smart home office furniture. So why have they survived and grown to be one of the world’s most successful companies?
Keeping it honest
The quirky, privately held company was run for decades by Ingvar Kamprad, who built the business into an affordable and attractive self-assembly furniture store for the masses. His objective was to deliver smart furniture at an affordable price.
Notorious for cost-consciousness, Kamprad vetoed first-class flights and forced managers to find the cheapest hotels. The egalitarian tone still exists in practices such as “anti-bureaucratic weeks”, when managers work in stores or warehouses.
Ikea likes to think of itself as a better corpo-rate citizen than most companies, and goes out of its way to deliver environmentally friendly products. However, this has not been achieved without confrontation.
A decade ago, the company was stunned by the first threat to its good name. The issue of child labour had just reached popular awareness in Europe in 1992 when Ikea was blindsided by a Swedish documentary. The film showed children chained to weaving looms in Pakistan, and cited Ikea as a customer.
The newly hired business manager for carpets, Marianne Barner, immediately term-inated the Pakistani contract. She then added a clause to all supply contracts forbidding child labour, and set off to Pakistan, India and Nepal to have a look around. On the advice of an activist with the ‘Save the Children’ organisation in Stockholm, Barner hired a company to monitor suppliers in the region.
As an update, Newsweek last year reported that Ikea has drafted a code of conduct for all 2,000 suppliers, governing everything from overtime to recycling techniques. In-house inspectors around the globe will use a 59-item checklist to evaluate suppliers every two years.
For years, Ikea had a naturally ‘green’ reputa-tion, loosely based on its roots in conscientious Sweden and its preference for untreated blond wood. That started to erode in the late 1980s when the finish on Ikea bookshelves was found to have illegally high levels of formaldehyde.
Then Greenpeace started leaning on companies, including Ikea, to stop using PVC, a hazardous plastic. By the early 1990s, Ikea was running environmental awareness sessions for 20,000 of its employees, but the training was so theoretical, it left employees frustrated.
The company founder decided to step in himself to come up with a more practical plan. Kamprad dispatched his personal assistant to Greenpeace International’s Amsterdam headquarters, where staff described faltering efforts to map the disappearing forests of the world. The Ikea representative immediately jumped on board. The stunned activists called in Dirk Bryant, director of Global Forest Watch. He flew to Amsterdam, expecting the Ikea reps to be “corporate suits”, but instead found “they were just like us, in sweaters,” recalls Bryant.
It was a masterstroke. Although most famous for its wood furniture, Ikea is rarely attacked by tree conservationists out to save ancient forests.
Simple steps, big results
While volume is on Ikea’s side when it comes to low prices, it has to compete each year in the battle to capture the minds of con-sumers. Last month, Ikea distributed millions of catalogues to Australian homes, with the theme ‘Discover Space’. With this kind of intense marketing, and with stores now in all Australian capital cities, Ikea has indeed become a household name.
Ikea designers work to simple formulas: they create home furnishings that are time saving, money saving, space saving, to children’s products that are described as sanity saving. You can buy just about anything, ranging from a smart office chair at $89 to a CD tower at $39, to a full modular home theatre furniture system that starts at $518 from an Ikea store. You can also buy online at www.ikea.com.au.
In fact, Ikea has achieved what a lot of retail-ers would love to achieve – the company has designed simple ways to make big differences in the home.