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Thread: Why You Spend So Much Money At Ikea

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    Why You Spend So Much Money At Ikea


    Ikea was founded in 1943 by a young Swedish man named Ingvar Kamprad. Today, there are 433 stores in 53 countries. The name Ikea comes from Ingvar's first and last initial, the farm he grew up on — Elmtaryd — and the village he lived near — Agunnaryd. Initially the company started by selling pencils and postcards. In 1948, it began selling furniture, and the rest is history. In fiscal year 2019, Ikea sold 7 million Billy bookcases, and brought in $45 billion in retail sales.

    At the heart of Ikea's success is value: You know what you're going to get when you shop at Ikea, and it's going to be affordable.

    In fact, price is so important to Ikea's strategy that the company first decides on the price of a piece of furniture and then reverse engineers the construction, the company says.

    Ikea has a "democratic design approach," according to Antonella Pucarelli, the chief commercial officer of Ikea retail U.S., which means that it "deliver[s] form, function and quality products at a low price. Even though our products are affordable, we don't compromise on quality," she says. (Ikea has had high profile recalls of millions of chests and dressers after several tipped over, killing children. In response, Ikea admitted the chests and dressers could be dangerous and offered free kits to anchor the chests and dressers to the wall, as well as refunds.)

    Some of Ikea's furniture is made from wood, some is made from particleboard (recycled wood chips fused together), keeping production more affordable. Ikea furniture is shipped and sold in flat-packs, which makes transporting it cheaper, and customers put it together themselves (or pay for someone to do it for them), keeping labor costs down.

    And the trademark simple style of the furniture Ikea sells is not just because it's a Scandinavian aesthetic. It's easier and cheaper to make affordable versions of such furniture look good.

    "Ikea's aesthetic is pared down and minimal, which is not an accident. Uncomplicated forms with very little applied decoration are easier to manufacture. More can be produced in a shorter amount of time, increasing efficiency and decreasing production costs," Ashlie Broderic, interior designer for Broderic Design, tells CNBC Make It. "The Malm bed is an excellent example of simple rectangular shapes combined to create a very chic bed."

    And "most of Ikea's furniture is available in black, white, or unfinished wood. By producing more items in fewer finishes, Ikea takes advantage of economy of scale," she says.

    All this makes Ikea's "aesthetic per dollar" ratio very high, says neuromarketer and author of "The Buying Brain" Dr. A. K. Pradeep. Ikea's affordable style is its "category-busting-metric," or what makes it stand out from all the other brands in that space, he says.

    The brain looks for a single defining characteristic to differentiate among brands, products and services, and if that's not easily identified, the brain falls back to price, says Pradeep, who has worked with companies including Coca-Cola, Procter & Gamble, Pepsi, Subway and Mondelez in the neuromarketing space.

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    Our Ikeas looks like a Middle Eastern parade. I haven't been to Ikea over the years since it stocks mostly items from China and India. I'm not surprised with the structural problems from the light-weight flimsy wooden furniture in which children might attempt to climb at younger ages. Also, the food prices are higher than Aldi's along with less selection of European foods. They lost my business years ago.

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    I have had to constantly retighten the screws and apply glue to keep my kids' IKEA dresser functional since I assembled it, but it's fallen apart anyway and we've had better luck with no-name American brands, one new and three used. We also had a pullout couch that becomes a bed, from Copenhagen Imports and that one quit working properly a year later, but the couch was comfortable and the bed frame was scary to feel like we were going to fall right through it. We can't say that either Swedish or Danish furniture is of higher quality to bother going out of our way, so we won't recommend them and never felt like we could, because our first impressions didn't match the hype. "Made in America" isn't something to be ashamed of.

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    I've never spent a nickel at Ikea. Buy quality furniture and it will last a lifetime.

    Solid hardwood and hardwood veneers, glued woodworking joints, and quality hardware are the keys to quality furniture.
    American by birth, made of parts from Emmingen, Baden-Württemberg.

    Der Familie Rentz seit 1535 - Meine Ehre heißt Treue

    Das Leben ist zu kurz, um billiges Bier zu trinken!


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