With the immense success of IKEA, it can be difficult to imagine a time when the company was struggling. But in the 1940s and 50s, Ingvar Kamprad, founder of IKEA, encountered several frustrating challenges that threatened to destroy his life’s work.
To learn more about how IKEA overcome these challenges, this blog post will provide a “walk-through” or guide to the marketing strategies that have made the company thrive.
What is IKEA?
Established in 1943, IKEA is a Swedish company known as one of the world’s largest furniture retailers. It has 473 stores in more than 64 markets. In 2014, the company had worldwide sales of 67.0 billion, which is about $86.2 billion.
In the first year of IKEA’s entry into the U.S., they opened a store in Arlington, Virginia, with sales of $1 million on opening day alone! Since that time, it has grown to be one of the most successful furniture companies in America. It is well-known for its low prices, fun shopping concept and modern designs that fit almost any decor.
IKEA’s Marketing Strategy
Like other iconic campaigns and brands, IKEA had to go through several iterations and formulate a solid marketing strategy to triumph over its competitors.
How does the company manage to excite everyone by whipping out a flat pack and doing it yourself?
Through its unique selling proposition (USP), IKEA offers a wide range of furniture, accessories and home appliances at an incredibly affordable price. This is accomplished using what the company calls a “flat-pack” design, where the products are stored in flat boxes with minimal assembly.
The whole idea is distinct, creative and original.
IKEA has become so synonymous with buying flat-pack furniture that it has included the term itself in its product names. One of the most famous examples is IKEA’s bestselling wagon, known initially as “Vagn” in Swedish to English translation.
IKEA, therefore, managed to create a brand that is instantly recognizable and beloved by consumers all over the world, but in addition to this, it also attracted customers by offering products at a highly competitive price.
Creating the need
Can you blame customers for buying from IKEA? After all, it’s a renowned, successful brand that has managed to create a loyal customer base and has built up trust. In addition, IKEA had the luxury of having a solid USP and enjoyed incredibly competitive pricing, which helped it stand out against its competitors.
However, this didn’t mean people weren’t still suspicious of the company’s quality.
Today’s consumers are more aware of the quality of goods and search online to determine if they can trust a company before making a purchase. IKEA could implement this through its “Never had a problem” guarantee.
Over its lifetime, IKEA has sold over 1 billion flat-pack furnishings to 4 billion customers worldwide. With such a massive number of customers, it is likely that some would still have a negative experience with the product.
Offering a Solution
To overcome this negative perception and appeal to potential customers, IKEA has formulated a solid and proactive solution that guarantees customers that they would never have a problem with the product. As a result, customers have complete confidence in the brand and are therefore willing to spend more money on them.
IKEA also identifies potential customer needs, such as when organizing and remodeling their home with various products. They then respond uniquely to these needs to appeal to consumers more effectively.
The company started with a simple way to set themselves online free of charge. They created an online forum where they provided information, tips and solutions to their customer’s problems. This was especially helpful for those living in apartments or small spaces, which is in IKEA’s target market.
IKEA further appealed to consumers by bringing together innovative technology with fashion and design. For example, the company created a storage option to inject speakers into specific products. As a result, it was able to design this in its furniture and marketed them as offering both functionality and aesthetic appeal.
Simplicity and Convenience
Additionally, IKEA has established a simple and convenient identity, which helps it stand out from the rest of the competition.
For example, take the simple instruction manuals and menus in each IKEA store. These are essential factors that allow customers to easily determine their options and make a purchase without having to consult or talk to anyone else.
Consumers also appreciate that IKEA focuses on making life easier by providing products that require no permanent installation, tool assembly or maintenance. IKEA’s self-service approach also appeals to everyone, as customers do not have to wait in long lines and can proceed with their purchase on their own time.
Value for Money
IKEA’s key strength is its price. With an affordable price range, the company has managed to attract large numbers of customers, many of whom were previously apprehensive about the quality of the products.
The company also developed a range of products that help to boost sales and gain loyalty from customers. For example, IKEA launched an initiative featuring complete families. This allows customers to find exactly what they are looking for without searching for prices or matching set options.
Why It Works
It’s Simple
Easily accessible and user-friendly, customers can “buy it and build it themselves.” They don’t have to worry about paying for installation service or the amount of time invested in putting together the furniture.
IKEA has successfully managed to create a product where assembly time is not considered a part of their product’s life cycle cost. This has allowed them to keep prices low so consumers can experience value for money.
It’s Consistent
IKEA has a clear and consistent identity. The company’s color schemes and shapes remain constant across different locations and forms of marketing. This builds trust between customers and the brand, as they are aware that they know what to expect when they purchase something from IKEA.
It’s Inclusive
IKEA has successfully created a product that appeals to people of all ages and backgrounds. For example, they have created products in a range of styles that are perfect for different types of living spaces.
Wrap Up
The way IKEA achieves value by simplicity is by designing, delivering and supporting products that are durable, functional and affordable. They also provide free shipping to all their customers and have a generous return policy. All of these factors contribute to the trust they have created with their customers.
At the end of the day, it is all about creating a value gap to appeal to your target market and make them feel appreciated.
Staying true to your message is critical when creating a successful brand or product.
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