Why You Spend So Much Money At Ikea

Today I'm at Ikea. Of course, let's compare prices. Ikea. Ikea. Ikea, Ikea store. I love Ikea. I've been shopping online this morning. I buy a lot of things at Ikea. Yesterday. I love princess cake. While I was in Miami on vacation last week. The Malm collection, of course. And these at Ikea cost $5.99. It was such a good price that I actually bought a second one. The Besta cabinet. I don't think I'm addicted, but if I had a bigger allowance to shop there, probably. Welcome to Ikea. The only place in the world where you can eat Swedish meatballs while shopping for your new Poäng chair or Färgrik mug.

Ikea has 433 stores in 53 countries. Three hundred and sixty-seven of them are owned and operated by Ingka Group. Despite serious product recalls and food court scandals, Ikea remains strong. There is something about the uniqueness of the yellow and the blue and the dumplings and the long walk through the shops and maybe also the sparkle in the eyes. That makes us a little more human than others. But that's just speculation. Ikea's combined global and online presence is huge. It grossed $45 billion in retail sales, had 1 billion store visits and 2.8 billion online visits in 2019. Its closest competitor in the home furnishings sector, Bed, Bath & Beyond, generated 12 billion dollars in 2018 in store sales.

In front of the huge blue and yellow warehouses, there was a young Swede with a simple idea. "Why are beautiful products only made for a few buyers? It must be possible to offer good design and functionality at low prices." Ikea was founded in 1943 by 17-year-old Ingvar Kamprad on the Elmtaryd farm in the village of Agunnaryd in Sweden. He started small, selling things like pencils and postcards. In 1948, Ikea began selling furniture. In 2019, it sold seven million Billy bookcases. One of the main reasons people flock to Ikea is its price. When I hear Ikea, I think of cheap, simple furniture that looks great.

Ikea is on the affordable end of the spectrum, but it depends on what you buy. They have beds that start at $99. They have very well designed beds that cost up to $500. The Ikea brand is elegant, minimalist and affordable. Since its inception, Ikea has focused a lot on its customers building their own furniture and therefore being able to offer them cheaper prices. If you're just starting out, you're moving into your first apartment, you don't have a lot of

money

to

spend

. Keep it simple. Look at the Nordic design. Buy some simple pieces from Ikea and invest in really nice bedding, a big rug and cool side tables.

Prices are lower in part because Ikea is basically a giant storage facility for furniture pieces. It is the design of the warehouse that sets it apart. So what a big box store will do will allow you the pleasure of discovery. So every time I hear a retailer say, "Our consumers want to come in, grab a few things, and run." Yes they will. If you didn't give them the pleasure of discovery. So a large store will give you the feeling of comfort and familiarity and also give you the pleasure of discovery. And that's when retail becomes retail therapy.

The winding maze is designed to make customers stop, shop and

spend

more than planned. You enter an Ikea store and you will find several mirrors. Mirrors placed tastefully here, tastefully there, on a table, on a closet, etc. The brain is fascinated with mirrors. Because? Because? When you look in a mirror, you see the most beautiful human being looking back at you. Ikea plays with the narcissist in us. Ikea uses mirrors throughout its stores. As you pass, you have love because you have love for yourself in the mirror. Point number one. Point number two, Ikea uses white throughout the store.

White cupboards, white closets, white tables. There is almost an app-like view. If Apple designed a closet, it would probably look like an Ikea closet. The brain perceives everything through context. The notion of that white symbolizes order, pure, simple, transparent, without saying all those words, through the judicious use of white, that is, impeccable, Ikea communicates what it aspires for its home. The crisp, clean aesthetic lends itself to a wide audience. But I kea doesn't just sell furniture. Glassware. I always went to Ikea to buy glassware, plates, pots and pans. I love their $500 solid wood bed. Depending on the situation, they have some very nice minimalist sofas.

I don't buy bedding at Ikea. I think pillows, duvets, duvets, sheets, and towels are items you'll really want to invest in. For families shopping at Ikea, some stores have complimentary childcare. With or without children, shopping can be exhausting. Do you know that the most exhausting environment for the entire human brain, the most exhausting environment, is the retail environment? It is the worst environment for the human brain simply because it processes so

much

information. But Ikea has a plan to keep you energized. When I hear Ikea, I think of meatballs. Recognize that customers need sustenance to continue purchasing.

Right in the center of most shops you will find a cafe serving Swedish food. But in 2013, horse meat was detected in Ikea meatballs. The problem traces back to a European supplier and only affected European stores. Ikea recalled all meatballs until this issue was resolved. Even though this news went viral, the iconic dish remains on the menu. Another Ikea classic: the cinnamon bun. Its placement near the exit is no coincidence. There is a part of the brain that activates every time you pay. Good? And so, by having the smell of baking, of heat, of sugar in particular, which takes away their stress, they reduce the stress of payment.

And therefore, the experience is memorable without being overwhelmed by the amount of

money

you spent. But whether you buy Ikea furniture in the store or online, once you open the boxes, it's time to get to work. The problem with Ikea was that you realized that the closet was minimalist and beautifully designed. But, my God. There are 10 million pieces that I have to put together to achieve the minimalist design. What I don't like is that you have to put everything together by yourself. I want a delivery! Give it to me and put it together. What if you are a single mother?

You don't have anyone to do that for you. However, according to a 2011 study from Harvard Business School, you're more inclined to value an item you've built yourself. The study even called this phenomenon the "Ikea Effect." But many customers do not want to assemble their own furniture. One of the other really big trends we're seeing is a shift toward services. Then there are people like Amazon who offer convenience. Now, suddenly, it's not just about how good a product is in your store, but what kind of simplicity we can offer our customers. Besta furniture is the most versatile.

It stands on legs. You can hang it on the wall. Whatever you need the Besta unit to do, I highly recommend it. Hire TaskRabbit to put it together and hang it on the wall. It will simply make your life easier. Then, in 2017, Ikea acquired TaskRabbit. Now, for a flat fee, Ikea customers can hire TaskRabbit to do the assembly. Since the acquisition of TaskRabbit, furniture assembly tasks have increased from 2% to 10%. A lot has happened with Ikea lately. Since 2010, the company has recalled millions of products. The most famous, the Malm line of dressers and dressers. Ikea is recalling 29 million dressers for the second time after the product was blamed for the death of an eighth child in May.

Consumers are asked to insure items or return them. He still sells these items today. Ikea is currently making some necessary changes to its business model. One of the novelties, if you will, are investments in digital. Well, we've given ourselves three years to make a massive transformation. So if you want to do it at home on a Tuesday night when the kids are in bed and done, we'll try to provide you with our solutions and insights digitally. It is investing in its online presence, delivery services and opening smaller stores. Most Ikea stores are managed by the Ingka Group.

Its operating income, a measure of profits, fell 26% in 2018. Ingka Group says the drop in profits is part of the plan. Ikea will close its only factory in the United States at the end of 2019. Ikea Group, which owns most Ikea furniture stores around the world, says it plans to cut 7,500 jobs over the next two years. Those cuts will focus on administrative staff positions. At the same time, however, the group also says it will create 11,500 new positions as it expands with new store and online formats. Ikea thrives on a business of quantity, not quality. Ikea can be said to be the fast fashion in home furnishings because it produces relatively inexpensive products that may seem disposable due to their, let's say, average quality.

You know, whether Ikea is sustainable or not because of that functionality of encouraging people to buy more. True sustainability would be for people to buy better quality things that last longer. And that translates into fewer purchases. But that's not how corporations work. It seems that clients don't work that way either. Depending on the country, people will say that they care about the climate. They care about sustainability. But if there is a higher price, this will deter some people. It's very easy to design a sofa for $3,000, but to make a comfortable, good quality sofa that kids can jump on and with removable covers, you can wash them, that is made of sustainable foam that you can bring back into the supply chain. supply and manufacture a new sofa.

And it's very, very difficult to be pretty and comfortable on the cheap. So our fascination revolves around that problem, not about doing something expensive. Ikea alone used 18 million cubic meters of commercial wood in 2018. It is making a conscious effort towards sustainability. As of 2018, Ikea's Ingka Group owns around 445,000 acres of responsibly managed forests. Combined, that's bigger than Alaska. Ingka Group has planted 3.6 million trees and cut down 700,000 trees in 2018. The clock is ticking. So it's time for companies like us to commit and start drawing up our plans and live with the fact that we may not have all the answers, but we will find them in the next decade.

While the company aims to make internal changes, it is also focusing on extending the life of the products it already sells. Ninety percent or more than 90 percent of all our consumers today are concerned, they are really concerned about the climate. But only 3% know what they can do. So what we're going to try is try different ways to help them save water, waste and energy and also try new ways of renting furniture or leasing furniture from us. This way we keep the furniture in the system for longer. That's just one of the different tests we're doing right now.

Meanwhile, Ikea is opening planning studios in city centers. The showrooms are significantly smaller than traditional Ikea stores. What Ikea and many other retailers are trying to do is reduce their presence and focus on creating smaller stores that can serve today's shoppers. Ikea's first planning studio opened in Manhattan in April 2019. Giants like Target and Dollar General are also opening smaller stores. And online companies like Wayfair are also adjusting their strategies. So, one of the strengths that Ikea has is the fact that it has a physical footprint because people can purchase it and that is cheaper for them to operate.

One of the things Wayfair really struggles with is the cost of doing business. That's why we're seeing Wayfair become brick and mortar. So you're seeing online retailers trying to adapt to brick-and-mortar stores and brick-and-mortar stores like Ikea trying to adapt to online stores. But they both have strengths that others want. Wayfair is just one of many retailers betting on Ikea. For now, Ikea is still on top, but can it stay there? Or will the growing market level the playing field?