The Story of IKEA

Introduction

• IKEA as a psychological trap designed for overspending.
• Largest furniture retailer globally, with over $50 billion in annual sales.
• Founded by Ingvar Kamprad, who had a dyslexic background.

A Dark Beginning

• Background of IKEA's founder, Ingvar Kamprad.
• Family tragedy: Akim Kamprad's suicide after financial difficulties.
• Ingvar's grandmother, Franziska, raised him and instilled in him entrepreneurial skills.

Ingvar’s Early Entrepreneurship

• Ingvar's first business at age 6: selling matchboxes.
• Young age: selling various items to reinvest profits.
• Family support: encouraged by his grandmother.

Controversial Ideologies

• Franziska's German background influenced Ingvar's politics.
• Involvement in the Swedish Nazi Party during teenage years.

Foundation of IKEA

• Founded in 1943 as a mail order company.
• Name derived from Ingvar Kamprad, Elm to Rood (family farm), and Agunarud (nearby village).

Growth and Innovations

• Transition to furniture sales in 1948 due to post-WWII demand.
• Unique naming system for products to help with dyslexia.
• Shift to retail model to ensure quality and lower prices.

Marketing Strategies

• IKEA’s showroom and product display evolution.
• Psychological tricks: one-way store flow, Gruen effect, price anchoring.
• Implementation of in-store restaurants to keep customers longer.

Controversies and Challenges

• Accusations of tax avoidance and labor issues.
• Ingvar’s Nazi ties resurfacing in media, leading to public scrutiny.
• Various strategies employed to maintain supplier relationships despite boycotts.

Flat-Pack Revolution

• Introduction of flat-pack furniture: reduced costs and increased efficiency.
• The IKEA effect: customers value products more when involved in assembly.

Expansion and Success

• Rapid growth through the 1990s, leading to over 450 locations worldwide.
• Ingvar maintained a frugal lifestyle despite immense wealth.

Conclusion

• Ingvar Kamprad's legacy and influence on retail innovation.
• IKEA as a unique blend of psychological marketing and efficient business practices.
• Ingvar's passing in 2018 and IKEA's continued global presence.