This is a guest post by Dan Wang.
The shopping experience at IKEA is like no other.
Most of us have at one point gone to one of its giant stores, unmistakable in blue and yellow; wandered through its carefully-designed paths; tasted its Swedish meatballs and lingonberry preserve; and most importantly, assembled its beautiful, Modernist furniture.
Now did you know that IKEA is a company that practiced early methods of dropshipping?
IKEA was founded in 1943 by Ingvar Kamprad at the age of 17. Working out of his family farm near a small village in Sweden, Kamprad made his start by selling matches he bought from Stockholm.
He soon expanded as a mail-order business to fountain pens, udder balms, wallets, and other small items. Kamprad didn’t always stock the items he sold, and he arranged for customers to receive their wares by bicycle, train, and often with the help of a friendly milkman.
After initial success, Kamprad scaled up, displaying his goods in a showroom. A few decades later, IKEA was growing so quickly that executives opened a store in Konstanz when they had meant to open it in Koblenz. Nowadays, IKEA has over 300 stores in 30 countries, and its catalogues are only slightly less popular than the Harry Potter books.
So what can you learn from a company with such humble beginnings? We share five lessons.
Think you can be as cool as Ingvar Kamprad, founder of IKEA?
1. Get Your Lista On
IKEA is obsessed with lista, which translates roughly to “making do”. Here are a few examples.
First, IKEA uses employees as models for its catalogues. The happy people sitting by the dining table are available employees, not specially-trained models.
To see how much IKEA values practicality, look no further than its very name, which was the mailing address of Kamprad’s farm. The “I” and “K” stand for “Ingvar Kamprad”; “E” for “Elmtaryd,” the name of his farm; and “A” for “Agunnaryd,” the name of the local village. Talk about simplicity.
One more story: In early days, someone once tried to sell Kamprad an intercom system for a store. Kamprad turned to a worker to bellow: “We already have one!” This is the billionaire famous for always flying in the economy class and who often recycles his teabags.
Here’s the lesson:
Try to make do. You don’t need special shots of your team in a studio setting for company bios: grab an iPhone and go outside on a sunny day for perfectly good pictures. Unless you’re a Fortune 500 company, you probably don’t need a subscription to an expensive media monitoring service; make do with Google Alerts. And are you sure that you need that (SEO consultant)? Really sure?
2. Leverage Local Colors
It’s absolutely no accident that the IKEA colors of blue and yellow match exactly those of Sweden’s flag.
Far from hiding its Scandinavian roots, IKEA embraces its Swedish heritage. Just take a look at these zany names: FYRKANTIG, DAGSTORP, and ÖDMJUK. (They’re candles, a couch, and a cup, respectively.) Unmistakably Scandinavian, with those unfamiliar scrambles of consonants and umlauts.
And the Swedish meatballs and lingonberry sauce that’s served in every store: Isn’t it much easier to serve hot dogs and pizzas?
Here, take a look at this short IKEA ad directed by Spike Jonze, with an announcer whose accent to our ears might best be described as “Swedish Chef.”
Finally, those of us who know just a little bit of Swedish probably picked it up in the IKEA stores. Hej – that means “Hello.” And hejdå – that’s “goodbye.”
Here’s the lesson:
Don’t homogenize. Emphasize your differences.
You’re not Walmart, you’re special. You should be bold about what makes you different, so long as you do it tastefully. When you’re authentic about your distinctiveness, your passion will attract those who love your products as much as you do. It’s going to be a lot easier to build up your community, whether that’s men who love their beards, who ladies who appreciate well-designed tights. Heck, the latter community was built without a cent in the marketing budget. That was pure love.
Having said that, you should probably make sure that you have a good grasp of Lesson 3…
3. Really Understand Your Customers
IKEA designers are among the foremost anthropologists of home life.
Designers create rooms for eight types of people: “baby,” “toddler,” “starting school,” “tweens and teens,” “living single/starting out,” “living single/established,” “living together/starting out,” and “living together/established.”
IKEA does endless research on each of these categories. It starts targeting its customers since birth. Per an internal memo: “Cots are our ticket to building a life-long relationship with our core customers.”
Every year, IKEA conducts thousands of “home-visits,” in which its researchers ask consenting customers to look around their homes and figure out their domestic habits.
That’s in addition to the studies it runs to carefully create a path that curves at the right points so that every item in the store gets noticed. IKEA practices a technique called “bulla bulla”, in which a bunch of products are jumbled together to create the impression of volume, and therefore inexpensiveness.
Here’s the lesson:
You won’t often understand your customers by giving them surveys. People aren’t always conscious of their own habits, or care more about appearing normal. So go out there and make sure that your product has its community. It’s much easier to do this if you have a loyal fanbase already and can easily leverage their insights. See Lesson 2 on using your authenticity and passion to build a loyal fanbase.
4. Let Your Customers Have Fun
Visiting an IKEA store is an experience in itself, almost like visiting an interactive art gallery.
The company likes it that way, and often looks the other way when customers treat the store as their home. Consider IKEA in China. Customers there are especially delighted with the company’s patience.
For a family in Beijing, going to IKEA on the weekend is like going to the park: you have to dress properly, it’s going to be a good time, and you don’t need to buy anything. People go there to take a nap under the display beds, to enjoy the air conditioning, and to drink free refills.
The experience is even more extravagant in Shanghai. A tradition has somehow emerged that every Tuesday and Thursday afternoon, 45 to 65 year old locals bring their lunch and take advantage of free coffee to seek new love. No, really.
The company’s response? Instead of prickly signs telling people to lie on beds and asking people not to abuse free refills, the company welcomes them, and has set up designated corners for matchmaking.
Here’s the lesson:
It’s great (perhaps even necessary) to have a clear vision for the optimal use of your products, but if people are finding little ways to be creative with them outside of that vision, you should encourage it. Don’t go crazy telling people something should be used. Make it clear, but you should be very happy if people are finding new and novel ways to play with your product. It’s a great sign of engagement.
For a little more info, take a look at our post on growth hacking: How to Growth Hack Your Ecommerce Business for More Traffic and Sales
5. Supply Chain Matters
IKEA should be recognized to be just as innovative in supply chain management as it is in design. Not only is its furniture beautiful, it’s also amazingly cheap. Price is as much a draw to IKEA as the shopping experience and the great products.
One of its major innovations came from the lista efforts (see above) of an early employee. In 1951, he tried to fit a table into his Volvo. When it wasn’t going in, he removed its legs.
And so flat-pack furniture was born.
One of the goals of designers is to create products that can be as tightly-packed as possible to minimize damage and shipping costs. Its motto is: “We hate air!”
IKEA has been innovative in other areas as well: it was an early adopter of particleboards, and uses a construction technique called “board-on-frame,” in which products with solid-wood exteriors are stuffed with paper innards.
Here’s the lesson:
Shopify stores sell things. Not software, real things. That involves a minimum of obtaining supplies and assembling them in some way. Even when you think that you have the perfect product, you need to be thinking of ways to reduce costs, improve the ways it can be used, and think whether it can be relevant to a broader community. Shopify is taking care of building the store and processing your payments so that you can focus on making a better product.
Hey, we hope you enjoyed this article. IKEA is fascinating, isn’t it? If you’re wondering if you too might build an empire from humble dropshipping beginnings, check out The Ultimate Guide to Dropshipping.
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