Worldwide if you are looking to buy furniture the best place to head to is an IKEA store or website, after all it is the place where you find ‘Affordable Solutions for better living’. The Swedish company has brought a renaissance in the furniture industry and here are ten things that you should know about IKEA –
10 Key Things about IKEA
1. IKEA is synonymous with furniture worldwide and has created a niche for itself with large format retail stores that offer modern furniture to suit every pocket. It was founded in Sweden in 1943 and currently has its headquarters in Delft, Netherlands. The company name IKEA is created out of the name of the founder Ingvar Kampard, Elmtaryd (a farm where he spent his childhood) and Agunnaryd (the town he belongs to in Sweden). He was all a mere 17 years old when he started the company and currently is one of the richest men in the world.
2.The IKEA product catalogue has more than 9,500 products across furniture out of which at least 2,500 products keeps changing every year. The retail store company has changed the way people shop for furniture and has a unique store structure. It has a long one way layout to the store where they expect the customers to view all the stores products. It also has a restaurant and a shopping outlet for food and the food business alone has raked 1.6 billion EUR in sales. It also has a playing area keeping in mind that several families shop at IKEA. Although, this traditional format is changing in new countries where land availability is an issue and newer multi storey store formats are coming up.
3.IKEA’s growing popularity worldwide is seen in its rising profits over the years. In FY15 it made revenues of 32,658 million Euros, an increase from 25,200 million Euros in FY11, a percentage increase of almost 30%. Its net income was 3,329 million Euros in FY15 and it paid a dividend of 666 million Euros to its holding owner Stichting INGKA Foundation. Another indicator of financial health is compliance with tax laws and IKEA has paid 822 million Euros as corporate tax in FY15, while other local taxes and other business taxes increased the total tax paid in FY15 to 1.5 billion Euros.
4.Started as a retail store model IKEA today functions both online and offline. Online sales brought in 1 billion EUR in FY15 with 13 of the 28 retail countries having online stores. The retail offline distribution works right from a production unit to a distribution centre and finally to a retail store. There are 43 production units worldwide, 33 distribution centres and 328 IKEA stores some of which are located in 40 IKEA shipping centres and 25 retail parks. They also have a global franchisor for countries where they are not retailing.
5.IKEA’s aim is to help more people live a better life at home. It is the only furniture retail store of its kind globally and ranks among the top Global brands in the world, it has a brand value of USD 17,009 million in 2016. The reason why IKEA does well is due to the unique product designs which suit the new consumer choices as well as the affordability that IKEA promises. The products are constantly evolving keeping in mind the anthropological changes in the society.
6.IKEA has moved along with the times and from selling online it has moved further into the mobile world. It has developed an augmented reality app which allows customers to test how IKEA furniture will look in their homes through AR technologies. This app is available on iOS and Android called the IKEA Catalogue and shows a real world picture of their entire catalogue.
7. Customers are now demanding energy efficient products not to only reduce their energy costs but also to reduce their carbon footprint. IKEA is constantly innovating with its product line and has till date proved it by shifting to LED which consumes less power and lasts longer than regular bulbs. It has also created products that are 50% more efficient than they were in 2008. It also does the same with sourcing of products, 50% of its wood and all cotton comes from sustainable resources.
8.155,000 employees work with IKEA worldwide. IKEA cares about the wellbeing of their employees even after retirement and has set aside 105 million Euros in FY15 for an additional contribution to pension fund under the TACK loyalty program. Gender inclusion is also an important aspect for IKEA and it became the first company in the world to reach the highest level of gender equality certification from EDGE, a leading global standard for gender equality. 55% of all co-workers are women whereas 48% of all managers are women.
9.As a company with worldwide sourcing and purchasing of natural products like wood and other natural materials, IKEA is affected by climate change. It also sets benchmarks in creating sustainable products and has set aside 1 billion EUR for climate action out of which 600 million EUR will be invested in renewable energy, while 400 million EUR will be used to support families affected by climate change. This change can be seen in the way the company is energy independent in the Nordic countries with the operation of 30 more windmills in 2015.
10.Many companies spend on social causes or donate money and manpower; however IKEA goes a step ahead and involves itself in creating solutions for those who need help. The IKEA Foundation is the philanthropic arm of Stichting INGKA Foundation and works for creating long term programs to create lasting change. It has worked with UNHCR to create a Better Shelter Unit for refugees that acts as emergency shelter. However, it has also donated funds to 45 organizations globally and in turn supported more than 178 million children since 2009.