Revealed: How after 30 years, Ikea is undergoing a radical overhaul
Ashley Armstrong
Updated
Ikea has realised it needs to open up as it looks at playing catch up next year - EPA
When IKEA first opened its doors in the UK 30 years ago, it made the mistake of assuming that everyone lived like Scandinavians.
But while many of us have now wholeheartedly embraced the clean lines of “Scandi” design, there was less enthusiasm in 1987 for the Swedish approach to sharing a bed.
“We didn’t have any doubles or king covers because in Scandinavia it’s not done like that – couples have their own separate quilts despite lying side by side in bed”, says Gillian Drakeford, Ikea UK boss, about the furniture retailer’s early days. “I remember thinking ‘this ain’t going to sell’.”
Ikea's catalogue cover from 1987
IKEA now sells double duvets along with 9,500 other products which helps drive 1.2m shoppers a week to its blue and yellow stores.
“We are now very much part of UK society,” says Drakeford, acknowledging with a hearty laugh that an IKEA trip is often listed by couples as one of the main causes of marital arguments. “We’ve been here for 30 years now. There’s probably lots of people who were even conceived on an IKEA bed. We’ve had people buy with us for their first home, as their children were born and then went off to university, and now empty-nesters who are buying new furniture as they downsize,” she says.
Ikea boss Gillian Drakeford
Drakeford’s own experience of IKEA started on the shop floor in Warrington back in 1987. Following a break away from the retailer when she trained to become a teacher she was lured back to run IKEA’s Asian operations, which saw her young family move to Hong Kong and China, before she returned to run the UK arm in 2014.
Drakeford says her time outside Britain made her appreciate how different cultures behave differently in their homes, from the importance of sharing meals together to whether shoes are worn indoors or not. The way people live in the UK has also changed dramatically.
“If you go back 30 years people tended to buy their house and move in after they got married. It was the done thing. A relative would buy you a suite of furniture and the idea was that you lived with that for the rest of your life.” Drakeford says. “And it was the ‘good furniture’ that you didn’t even use, it was kept in the spare room ‘for best’.”
IKEA’s intervention in the sleepy home furnishings market triggered a profound shake-up, driving down prices to make furniture more affordable for the average home owner. That remains the primary aim.
Ikea
The furniture giant obsesses over how people live, with Drakeford and her team often paying house visits to check whether the moody teenagers still retreat upstairs to their bedroom or people still eat dinners on their laps.
The enthusiasm for food, driven by celebrity chefs and a boom in casual dining, has seen the return of the dining table, while our screen addiction has meant that families are spending time together in the same room, albeit doing different things.
IKEA now sells a “Byllan” laptop cushion and “Grimar” bamboo iPad holder in a fresh sign of these digital times. Drakeford also reveals that the chain is even working with Nasa on storage solutions for life on the moon, based on cramped Mars research stations.
“We need to think about what people might want in the next 30 years”, Drakeford giggles, aware at how madcap it sounds.
While IKEA products have evolved as lifestyles have changed, IKEA bosses have realised that the retailer needs to do its own bit of home improvement. Its trusted “big box” retail model, which relies on people being happy to drive for hours to then spend half a day zigzagging warehouse aisles, is now under threat due to the rise in online shopping which has warped customer expectations.
“The world has changed”, says Drakeford. “Our business model was originally ‘we do half, you do half and you save money’ but now saving time is equally important to people as saving money.”
IKEA has also been partly caught out by the decline in car ownership – owning a vehicle is not as aspirational as it once was. For example, in 1994 75pc of 21 to 29-year- olds held driving licences but that has dropped to 66pc as rising insurance costs has made driving extortionate.
Because fewer people own cars there has been a boom in demand for IKEA to deliver its flat-pack furniture. But IKEA has lagged far behind its retail rivals in online shopping, reluctant to interfere with its successful store model, which encourages consumers to impulse-buy tea-lights on their way to the tills.
That is now changing. In a radical overhaul of how IKEA has been operated for decades, Torbjorn Loof, boss of parent group Inter IKEA, last week said that the business was prepared to sign partnerships with internet giants such as Amazon and Alibaba in order to beef-up its e-commerce business.
Ikea has relied on customers being happy to walk miles of its warehouse stores
“Previously at IKEA we kept everything inside,” explains Drakeford. “But we know now that if we want to be relevant and agile and where the customer is, we need to open up and engage in new partnerships.”
The most recent example of this is IKEA’s swoop on TaskRabbit, a website that allows users to hire people for odd jobs, last month. The purchase followed UK trials that revealed customers were more than willing to pay for someone else to assemble their wardrobe with the 55 screws and nails required. Until now IKEA had only offered expensive assembly fitters that were better suited to kitchens and bathrooms rather than smaller jobs.
“Instead of closing ranks we realised that we could engage with TaskRabbit and it means that now we have a service offer,” says Drakeford. She admits that IKEA realised one of the biggest off-putting factors for people to shop with them was the dread of having to build the furniture.
Ikea is exploring ways to be closer to its customers
Drakeford is also aware that with only 20 shops in the UK there are still swathes of society that can’t reach a store within two-and-a-half hours, which means the business has committed around £250m on new stores in Sheffield, Exeter and Greenwich. “We still have an expansion strategy because we don’t have enough stores, despite a lot of other retailers complaining they have too much space. We are not accessible to the many yet,” she says.
Last year IKEA flirted with the idea of opening a high-street store in BHS’s old shell on Oxford Street but it never came to pass. The company is still exploring opening a rash of smaller click-and-collect sites to bring it closer to the customer.
It is also looking to follow its Swedish business by offering customers second-hand IKEA products, having realised how much of it is available on the internet. “I see 2018 as a year of catch-up,” Drakeford says. Now that the Swedish furniture giant has woken up, it could bring fresh chaos for the retail market.