The success story behind the Swedish-founded furniture store is truly an interesting tale. At the time, IKEA’s groundbreaking ideas were met with skepticism, but no one can deny the success of the mega-popular retailer today.
Ingvar Kamprad’s Family and Background
Kamprad was born March 30th, 1926 in Pjätteryd (now Älmhult Municipality). Kamprad’s grandmother saved the family business and taught him many life lessons that shaped his future.
His aunt helped him discover the art of commerce by buying matches in Stockholm and reselling them for a profit. That experience stuck with Kamprad, even though he was only five at the time.
A Dedicated Entrepreneur
Planning for his future, Kamprad started to save his money. Unlike other students his age interested in dating and sports, he was thinking about his business. He was 17 years old when he added to the business funds and founded IKEA. The business name is a combination of his initials (IK) and the beginning letters of the farm and town he grew up in (Elmtaryd and Agunnaryd).
Wanting to attract more customers to his store, Kamprad offered free coffee and buns to shoppers. The plan turned out better than expected and over a thousand people came to the event. Dedicated to his word, he made sure that every customer received a roll and coffee. The massive turnout gave him the idea to put restaurants in each store.
Selling Affordable Quality Furniture
At the time, furniture was expensive. Kamprad wanted the average family to be able to afford it, so he focused on making furniture IKEA’s main focus.
IKEA’s first furniture displayed was a coffee table and a chair. Kamprad was dyslexic and found it easier to remember simple names instead of product numbers, so the first chair was called ‘Root’ and all furniture after was named.
Kamprad passed out store brochures called ‘IKEA News’, early versions of the IKEA catalog. He wanted to target middle-class families with middle or low incomes. In fact, he once said, “It is better to sell 600 chairs at a lower price than sell 60 chairs at a high price.”
Not everyone was thrilled with Kamprad’s methods. He was boycotted by The Swedish Federation of Wood and Furniture Industry and loggers ceased operations with him. But Kamprad was dedicated to his brand and his customers, so he turned to Polish suppliers that would supply him with materials for less.
By 1953, the very first furniture showroom was unveiled in Älmhult. This revolutionary idea allowed customers to actually see and feel the products before buying them.
Kamprad visited America and was inspired by the trade system he saw there. Customers would pay for their product and carry the items away to their cars. When he returned, he opened a 31,000-square meter store using the American system of cash and carry.
The Birth of Modern IKEA
Furniture was now sold unassembled in small packages. This saved on transportation costs and lowered the prices for his customers. Many people enjoyed putting the furniture together themselves, and Kamprad included detailed directions in each package.
Stores were located in suburbs since the land costs were cheaper. Customers would travel fairly far to pick up their goods, so Kamprad started selling vehicle roof racks for a low price. The idea worked, and the business’ revenue increased dramatically.
Realizing IKEA’s popularity often left stores with empty shelves, Kamprad decided to create self-serving warehouses that could be stocked as needed. Stores became large showrooms and entire display rooms were decorated with IKEA furniture, giving customers an idea of what their homes could look like.
And so, Kamprad discovered the perfect formula for success.
Kamprad’s Success Story
Kamprad was married twice and had four children. In 2014, Kamprad’s net worth was $3.8 billion. He passed away in his sleep at 91 years old on January 27th, 2018.
There are now 338 IKEA stores across 40 countries with more opening all the time. Whether Kamprad knew what his business would become or not, today IKEA is one of the largest furniture retailers in the world.