Something in Forbes' recent ranking of the world's richest billionaires truly shocked me. There at number four is Ingvar Kamprad, the 79-year-old Swede who founded Ikea, the furniture chain. He is, according to Forbes, worth some $28 billion. That makes him richer then Michael Dell and George Soros and Rupert Murdoch, and richer than the Google boys combined.
But what a brand. The Chicago Tribune reports today that "[h]undreds of screaming, arm-waving shoppers stormed Michigan's first Ikea store Wednesday, unable to pass up the spectacle of opening day and the combination of functional furniture and low prices." Some shoppers camped out in the Canton Township store's parking lot for as much as 48 hours, the paper says, in order to be first in line when the doors opened at 8:45 this morning. (Here's the link to the story.)
Similarly, in the Detroit Free Press over the weekend, journalist Greta Guest writes:
"Ikea has become a global phenomenon that prompts the same wild devotion in Saudi Arabia and London as it does in Bolingbrook, Ill. It has done this by selling stylish furniture and home accessories at low prices, similar to what Meijer Inc. has done with food and Wal-Mart Stores Inc. with general merchandise. And it keys into a fascination with bargains.
"'I think one of the most interesting things about their philosophy is to start out with a price that the consumer will want to pay and figure out a way to make it,' said Ken Bernhardt, a marketing professor at Georgia State University in Atlanta. 'That is completely backward from the way other companies do it.'
"The company keeps a zealous focus on cost control, similar to Wal-Mart's practice of squeezing suppliers and Toyota Motor Corp.'s elimination of waste and errors in manufacturing." (Here's the link.
I find the passion that Ikea generates among consumers a little mind-boggling. Yes, you can get good values there, but they also use cheap materials. And yes, the design is pretty cool and the experience is pleasant (I love Swedish meatballs), but it's not exactly a life altering experience.
What do you think? Why is the Ikea brand as potent as it is, and what lessons can other businesses take from it's success?
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