IKEA is a company that hates air. Not the kind that you can breathe freely in the Swedish forest, but the kind that you pack and ship for no reason. In the beginning of the 2000s, the company organized a competition among its employees. The challenge: find a new way to get rid of air. The winner came up with a better way of transporting tea lights, - the metal cups around the candles were redesigned to sit neatly on top of one another - and so received a two-week vacation to Thailand.
Packing furniture in such a way that it is flat, light and easily taken by the clients is one of the many inventions that made IKEA’s founder, Ingvar Kamprad, one of the richest men in the world. People who closely work with the Swedish entrepreneur say that he is a brilliant marketer, who never makes a mistake. The strategies of Kamprad are studied and examined by major entrepreneurs from around the world.
The story goes that Kamprad founded IKEA at the age of 17, after his father gave him money because he had done well in school. But even before this, the youth made extra money by buying matches in the city and reselling them in smaller quantities in the village. He made up the name IKEA from his own initials (I.K.) plus the first letters of Elmtaryd and Agunnaryd, the farm and village where he grew up.
In the beginning Kamprad traded many different things, but the biggest demand was for pens. At the beginning of the 1940s, pens were a novelty in Sweden. Kamprad ordered 500 pens from Paris, taking a loan of 63 USD in a district bank. According to Kamprad, this was the first and the last loan that he took in his life. The first furniture he sold was a chair, which he called Root. This was the beginning of another IKEA trend: naming products after lakes, cities and people, instead of numbering them. Some sources say this is because Kamprad is dyslectic and couldn’t remember numbers.
The IKEA restaurant was another brilliant marketing tools the young entrepreneur came up with. To attract prospective customers to the presentation of the store, Kamprad promised a free cup of coffee to everyone who would come. To his surprise and probably consternation, this attracted more than a thousand people. In the end, everybody got coffee and every IKEA store ended up with a fast food restaurant.
In the early 60’s, Kamprad went on a trip to the United States. There he first saw how the Cash & Carry trade system worked. He liked that form of trade where customers paid in cash and then carry the goods away themselves. Back home, Kamprad opened a 31,000 square meter IKEA Kungens Kurva store near Stockholm and arranged his goods the American way, with improvements.
First, the store was opened in a suburb, where rental land costs were much lower, and there was space to park. Second, the company started selling the ready-to-assemble furniture, wrapped in a flat package. This was easier and cheaper to transport, and Kamprad had noticed that people actually liked to self-assemble cabinets and sofas. To encourage customers to go shopping in IKEA, he started selling roof racks for cars for a knockdown price.
There was one thing Kamprad did not take into account when opening his shop: a possible shortage of goods. A huge number of people swept the IKEA products from the store’s shelves. Even in such a large store there weren’t so many goods and staff couldn’t keep up with the demand, so Kamprad opened a self-service warehouse. So, quite by accident, IKEA found another formula for success. Now every IKEA furniture store is a kind of showroom, where visitors can see rooms in a row and imagine what a particular style will look like in their own house. The customers then pick up the packages in the warehouse, take them home and assemble the furniture themselves.
In 1986, Ingvar Kamprad retired and became advisor to the parent company INGKA Holding B.V. With an estimated net worth of $3.8 Billion in 2014, Kamprad has a reputation of not liking to spend money. In some stories about him, it is said that he takes the subway to work, and that when he drives, it's an old Volvo. There is even a rumor that when he stays in a hotel, and wants to drink one of those expensive sodas from the minibar, he replaces it later with one picked up from a nearby supermarket.
As of June 2015, IKEA owns and operates 353 stores in 46 countries, and it still doesn’t ship air.