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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Why You Spend So Much Money At Ikea

[hanabi]

it's only "disposable" to the rich, us middle class ppl dont think that its a "fast fashion" like. if you choose the right product it can be timeless

[triggerfish]

That flamboyant Indian doctor speaking like an upper class Victorian woman while wearing a flower Blazer is everything.

[ReneeStevens]

I disagree with the "fast-fashion of home furnishings"... I've owned many of my IKEA furniture pieces & decor for 10-15 years + and they still look great! Others I sold and made decent $ back.

[jayit]

Bruh, building ikea furniture is like half the reason I like Ikea. It's like adult LEGO.

[dastitone]

Regarding the recalled dressers: I think it's very unfair to put so much blame on ikea. If a child is heavy enough, they WILL topple the furniture over. Any dresser, bookshelf, end table, etc, that is made from soft woods will fall over if not secured to the wall. There is really nothing defective about the ikea dressers themselves. The only issue is parents who are not securing furniture properly, and who are not teaching their children the dangers of climbing on furniture.

[MaHa-qlzv]

I love IKEA because of their showrooms. It feels like you are peeking inside someones home ;) and I absolutely LOVE those cheap white plates and bowls. They last for ever, are thin and light and look fantastic with any kind of table arrangement you want to do.

[GlitterGhoul]

I'll never understand why people are horrified over the idea of eating a horse but don't blink an eye over eating meatballs made out of any other animal. You use products made from horses all the time without even thinking about it.

[MrStars-bjyf]

It’s funny, parents blame ikea for dressers toppling their kids, but don’t think that it’s their fault for not securing the dresser and teaching their children. As usual.

[serenadeofastar]

I was joking in my head, like “I can’t be that addicted.” Then I realized I was typing this from my IKEA bed with my IKEA blanket.

[bubbagene]

The recall isn't there fault. It has been known for decades that you MUST strap your furniture if you have children. If your a parent and didn't know that, you're not reading enough books.

[renanyeil]

I don’t get why some are having a hard time assembling Ikea furniture. I love building Ikea, it’s like legos for adults

[justyourdreamlondon]

I don't like when this girl said. What if you are singing mom...

Woman can do everything and specially if she is single mother.

That's funny that women think she can't build Ikea furniture. Girl please 🤦🏻‍♀️

[Indifferent]

As a Swede, I can say that a real swedish cinnamon bun doesn't have frosting on it.

The "retail expert" guy has it wrong. Mirrors used in a furniture retail setting isn't for people to gaze at their "beautiful selves", rather mirrors reflect light & opens up spaces. Most people find fault in the way they look anyway so using mirrors to remind them of that would be counterproductive.

Nice floral blazer though.

[Clawsome-Clips]

Watching this while my computer is on an IKEA desk, next to an IKEA book shelf, near an IKEA TV stand. My apartment is basically IKEA. This video isn't far off.

[KL-tnzc]

I can't believe she just said she doesn't shop at Ikea for bedding. Their comforters are everything.

[bessycorrales]

IKEA does carry some quality long lasting furniture. I own various pieces that I’ve had for years and are still in excellent condition. The designs are timeless. Also, their customer service is excellent and I can’t ever leave a store without having a meal or enjoying a treat. I love IKEA!

[gabbyvelasquez]

tbh my mom used to take me to ikea for lunch like how other parents take their kids to mcdonalds. i loved the food and i was obsessed with walking around the store pretending like i was rich and lived in glamorous spaces. my cousins and i would go there to play hide and seek.

[ferminmorales]

Once drove 115km to have meatballs for breakfast, spent my day off wandering about in the store, then walked out with ONLY a pack of their cheapest candles. Hah! Self-discipline 🤣😂😅

[elleem]

am the only weirdo that actually likes assembling the furniture together by myself? I find it therapeutic and fun.