IKEA: The Best Loved Swede since ABBA
Few would have predicted 4th place for the Swedish democratic design giant (€23billion+ annual sales!). OK so they cannot quite compete with the tech trail-blazers Apple and Google but would BMW, Audi or Nike expect to be behind them? We think not.
Not many brands manage to combine a strong value proposition with healthy cultural resonance. When they do it’s a winning combination as witnessed by Target’s strong VIBE scores in North America and IKEA’s place just below the global podium.
Let’s take a look at some of the key factors driving this performance:
IKEA has been quick to surf on the socio-economic trends impacting the world today:
- Rampant urbanization and unprecedented real estate prices result in smaller homes and so IKEA have focused its offer and marketing on delivering clever small space solutions
- The enduring economic crisis in the West coupled with the expanding middle classes in developing markets (China in our study) make IKEA’s great value proposition relevant globally
- People are increasingly interested and involved in design and fashion, as demonstrated by the multitude of home improvement/make-over TV shows the world over. IKEA’s modern and fun furnishing solutions enable people to indulge their growing appetite for design and refresh their homes without busting the bank
AN ENGAGING BRAND PERSONALITY
The big blue and yellow box has built an empathetic persona around the world, becoming the best loved Swede since ABBA! A closer look reveals the portrait of a friendly and inspiring democratic design partner:
- IKEA sees the world with fresh and hopeful eyes (Innocent)
- It has a practical yet creative spirit (Creator)
- It believes in offering ‘many people a better life at home’ (Nurturer and Regular Guy)
- It never takes itself too seriously (Jester)
THE GUARANTEE OF AN EXCITING OUTCOME
Looking at the 4 dimensions of VIBE (Visionary, Inspiring, Bold, Exciting), IKEA stands out on ‘Exciting.’ What’s behind this sense of enterprising energy? Browsing at IKEA is framed around excitement and surprise. The store walkway literally puts something new around every bend. Quite often the products aren’t on your shopping list going in, and you haven’t seen anything quite like them before. Yet they seem instantly clever and originally designed in function and aesthetics. There’s a certainty you will not leave empty handed – especially with the Ali Baba cave of affordable goodies in the market hall. As well, IKEA shakes things up by granting customers the ability, via its easy-to-download planner tools, to become one’s own custom designer, and to reap the emotional reward of having enhanced one’s life. And IKEA keeps it fresh: the company’s new interactive seasonal catalogue is the ticket to ‘Celebrate Brilliantly,’ with hidden videos and interactive content unlocked by smartphone or tablet. It’s intended to both inform and spark imaginative home design ideas. The Life Improvement Project offers an ‘open house’ for customers to post inspired changes to a particular room, inspiration that in turn acts to inspire other customers, ratcheting up the relevance and momentum of IKEA. And, let’s not forget the eternal excitement of Swedish meatballs in lingonberry sauce.
Consumers also applaud the ‘Boldness’ of the IKEA brand with its distinct, undiluted Swedish identity whatever the market, its super smart design solutions and quirky, conversational tone of voice. It says we may be big, but we’re not stuffy, cold and corporate. As a French consumer put it: ‘Suédois avec un sens de l’humour.’ (‘Swedes with a sense of humour’.)
Once a pioneer in the retail arena, IKEA is still seen as ‘Visionary’ somewhat more so than most, but it’s not a fame-claiming dimension these days. The self-serve and assembly, ‘you do your bit, we do our bit, together we save’ concept was ground-breaking at its inception, but IKEA may be a victim of its success as it is now imitated around the world. To remain visionary, IKEA needs to face some big challenges: how to insert more flexibility into a rather monolithic concept, how to become a fully integrated click and mortar retailer, how to bring the brand and offer to time-starved urbanites rather than impose an exodus to the outer suburbs, how to do more to become a global beacon for CSER (IKEA have purchased wind farms and is aiming for 100% renewable energy across its 300+ stores).
IKEA’s roots as ‘Inspiring’ also run deep…after all, they came up with the brilliant invention of the life size doll’s house: the show room settings. It’s so easy to get ideas and project yourself at home. But with a just-above-average score as “Inspiring”, the brand may benefit from some fresh ways of connecting with consumers, to bolster people’s sense of pride and perception that IKEA is making the world a better place. It will necessitate greater offer renewal and more creative and aesthetic design to counterbalance the functional basics.
The enduring health of IKEA’s VIBE will be contingent upon its ability to fully embrace the digital revolution and channel integration, build greater flexibility into the concept and revitalize its democratic design credentials.