I'm at Ikea today.

Of course, we're
gonna shop around.

Ikea. Ikea. Ikea,

Ikea store.

I love Ikea. I've

been shopping online, this

morning. I buy a lot

of things from Ikea.

Yesterday. I love
the princess cake.

While I was in Miami

on vacation last week.

The Malm collection,

of course.

And these at
Ikea are $5.99.

It was such a great

price, I actually grabbed a

second one. The

Besta cabinet.

I don't think addicted, but

if I had a bigger

allowance to shop
there, probably.
Welcome to Ikea. The only
place in the world

where you can snack

on Swedish meatballs while

you shop for your new

Poäng chair or Färgrik mug.

Ikea has 433 stores

in 53 countries.

Three hundred sixty-seven of

them are owned and

operated by Ingka Group.

Despite serious product recalls

and food court

scandals, Ikea is
going strong.

There is something about

the uniqueness with the

yellow and blue and the

meatballs and the long

way through the stores and

maybe the twinkle in

the eye as well. That makes

us just a little bit

more human than others.

But that's
just speculation.

Ikea's combined global and

online presence is

massive. It brought in
$45 billion in retail

sales, had 1 billion

store visits and 2.8

billion online visits

in 2019.

Its closest competitor in

the home furnishing

space, Bed, Bath & Beyond,

brought in $12 billion

in 2018 in
in-store sales.

Before the massive blue

and yellow warehouses,

there was a young Swedish

man with a simple idea.

"Why are beautiful products only

made for a few

buyers? It must be possible

to offer good design
and function at
low prices."

Ikea was founded in

1943 by 17-year-old Ingvar

Kamprad at Elmtaryd farm

in Agunnaryd village in

Sweden. It started small,

selling things like

pencils and postcards.

In 1948, Ikea
started selling furniture.

In 2019, it sold
seven million Billy bookcases.

A major reason people flock

to Ikea is its price

point. When I hear Ikea,

I think of cheap, simple

furniture that looks

really nice.

Ikea falls in the

affordable area of the

spectrum, but it depends

on what you buy.

They have beds that

start at $99.
They have really well designed
beds that go up to

$500. The Ikea brand

is sleek, minimal and

affordable. Ikea from its

very beginning has

focused a lot on its

customers building its own

furniture and therefore they

could offer them

cheaper prices.

If you're starting out,

you're moving into your

first apartment, you don't have

a lot of money to

spend. Keep it simple.

Look at Nordic design.

Buy some simple Ikea pieces

and invest in some

really nice bedding, a

great rug, cool side

tables. Prices are lower in

part because Ikea is
basically a giant storage
facility for furniture

parts. It's the warehouse's

design that sets it

apart. So what a great

store will do will allow

you the pleasure

of discovery.

So anytime I hear
a retailer saying, "Our

consumers want to come in,

take some stuff and

run out." Yes, they will.

If you didn't give

them the pleasure of

discovery. So a great store

will give you the

sense of comfort and

familiarity and will also

give you the

pleasure of discovery.

And that is when

retail becomes retail therapy.

The winding maze is

designed to make customers
stop and shop and spend
more than they planned.

You walk through an Ikea

store and you'll find a

number of mirrors.

Mirrors placed tastefully

here, tastefully there,

on a table, on
a closet, etc.

The brain is
entranced with mirrors.

Why? Why?

When you look in a

mirror, you see the most

gorgeous human being looking

back at you.

Ikea plays to the narcissist

in each of us.

Ikea employs mirrors

everywhere through their

stores. As you walk by,

you have love because you

have love for yourself

in the mirror.
Point number one. Point
number two, Ikea uses

white everywhere through

the store.

White cupboards, white

closets, white tables.

There is almost an
App le-esque view.

If Apple was to design

a closet, it would

probably look like

an Ikea closet.

The brain perceives

everything through context.

The notion of that

white there symbolizes

clutter-free, pure, simple,

transparent, without

saying all those words,

through the judicious use

of white, that is
spotless, Ikea communicates

what you aspire

for your home.
The crisp, clean aesthetic
lends itself to a

broad audience. But I

kea doesn't just sell

furniture. Glassware.

I would always go to
Ikea for glassware, dishes,

pots and pans.

I love their $500

solid wood bed.

Depending on the situation,

they have some very

nice minimal sofas.

I do not shop
at Ikea for bedding.

Pillows, duvets, comforters, sheets

and towels I

think are items that you

really want to invest

in. For families

shopping at Ikea,

some locations have

complimentary daycare .

With or without the kids,

shopping can
be exhausting.

Do you know that the

most tiring environment for

the entire human brain,

the most tiring

environment, is a
retail environment?

It is the worst environment

for the human brain

simply because you're

processing so much

information. But Ikea has a

plan to keep you

energized. When I hear

Ikea, I think of

meatballs. It recognizes
that customers need

sustenance to
keep shopping.

Right in the center of

most stores, you'll find a

cafeteria serving up
Swedish fare.
But in 2013, horse meat
was detected in Ikea's

meatballs. The problem was

traced back to a

European supplier and

only affected European

stores. Ikea pulled all

meatballs until this

issue was resolved.

Despite this news going

viral, the iconic dish

remains on the menu.

Another Ikea classic: the

cinnamon bun. Its placement near

the exit is no

accident. There's a part of

the brain that fires

every time you pay.

Right? And so by having

the scent of baking, of

warmth, of sugar in
particular, that takes the

stress out, they get down

the stress of payment.
And therefore the experience
is memorable without

it overwhelming you with how

much money you spent

out there. 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

you realized that the

closet was so
minimalist and beautifully

designed. But, oh my God.

There are 10 million parts

I got to put together

to get the
minimalistic design.

What I don't like is

that you have to put

everything together
by yourself.

Like, I want a delivery!

Deliver it to me
and put it together.

Like, what if you're

a single mom?

You don't have anybody to

do that for you.

However, according to a
2011 study by Harvard

Business School, you are

more inclined to value

an item you
built yourself.

The study even named

this phenomenon the "Ikea

Effect." But many customers

don't want to

assemble their
own furniture.

One of the other really

big trends we're seeing

is a shift
toward services.

So you have people like

Amazon that are offering

convenience. Now, all of a

sudden, it's not just
how good is a product
in your store, it's what

kind of simplicity can

we offer our customers?

The Besta cabinet is

the most versatile.

It stands on legs.

You can hang it

on the wall.

Anything you need the Besta

unit to do, I highly

advise it. Hire TaskRabbit to

put it together and

hang it on the wall.

It'll just make your life

easier. So in 2017,
Ikea acquired TaskRabbit.

Now, for a flat fee,

Ikea customers can hire

TaskRabbit to do
the assembly.

Since the acquisition

TaskRabbit's, furniture

assembly tasks have gone up from

2 % to 10 %.

There's been a lot going

on with Ikea lately.

Since 2010, the company

has recalled millions of

products. The most infamous,

the Malm line of

chests and dressers.

Ikea is recalling 29
million dressers for a

second time after the product

was blamed for the

death of an eighth
child in May.

Consumers are being asked to

secure the items or

return them. It still

sells these items today.

Ikea is currently making

some necessary changes

to its business model.

One of the new things,

if you like, is the

investments in digital.
Well, we have given ourselves
three years to make

a massive transformation.

So if you want to do
it at home on a Tuesday

evening when the kids are

to bed and things are

done, we will try to

bring our solutions and our

knowledge digitally
to you.

It's investing in its

online presence, delivery

services and opening

smaller stores.

The majority of Ikea stores

are operated by Ingka

Group. Its operating income,

one measure of

profits, was down 26

% in 2018.

Ingka Group says the drop

in profits is part of

the plan. Ikea will

close its only U.S.

factory at the
end of 2019.

Ikea Group, the owner

of most Ikea furniture

stores worldwide, says it plans

to cut 7,500 jobs

over the next

couple of years.

Those cuts will be

focused 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 formats

and online.

Ikea thrives on a
business of quantity, not

quality. You can say that

Ikea is the fast

fashion of home furnishings

because it does
produce relatively inexpensive
products that may

seem disposable because of

the, say, average

quality. You know, whether

or not Ikea is

sustainable because of
that functionality of

encouraging people to
buy more.

True sustainability would be

people buying better

quality things that

last longer.

And that results

in fewer purchases.

But that is not

how corporations work.

It seems like customers

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's a higher

price tag, to that, it

will deter some people.

It's very easy to design

a sofa for $3,000, but

to do a comfortable sofa
with good quality that

the kids can jump up

and down in with removable

covers, you can wash them,

that is made of

sustainable foam that you can

bring back in the

supply chain and make

a new sofa.

And it's beautiful and

comfortable at the low

price is very,
very difficult.

So our fascination is around

that problem, not to

make something expensive.

Ikea alone used 18

million cubic meters of

commercial wood in 2018.

It's making a
conscious effort toward

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 had

harvested 700,000 trees in

2018. The clock

is ticking.

So it's time for companies

like us to commit and

start working out our plans

and live with that

we might not have all

the answers, but we will

find them in the decade

or so to come.
While the company aims
to make internal changes,

it's also focusing on

extending the life of

products it's
already sold.

Ninety percent or north of

90 % of all our

consumers are concerned

today, are really

concerned about climate.

But only 3% know

what they can do.

So what we will try is

to try different ways of

supporting them with saving

water, waste, energy

and to that testing, trying

new ways of where you

can also rent furniture,

or lease furniture from

us. So we keep the

furniture in the system a

longer while. So that's just

one of the different
tests that we are
doing right now.

In the meantime, Ikea

is opening planning studios

in city centers.

The showrooms are

significantly smaller than

traditional Ikea stores.

What Ikea and a lot

of other retailers are trying

to do is downsize their
footprint and focus on

doing smaller stores that

can cater to today's

shoppers. The first Ikea

planning studio opened

in Manhattan in
April 2019.

Giants like Target and

Dollar General are also

opening smaller shops.

And online companies like

Wayfair are also
adjusting their
strategies.

So one strength that Ikea has

is the fact that it

does have a brick

and mortar footprint because

people can pick it up

and that's cheaper for them

to operate. One of the

things that Wayfair really

struggles with is its

cost of doing business.

That's why we're actually

seeing Wayfair go into

brick and mortar. So you're

kind of seeing online

retailers trying to adapt to

brick and mortar and

brick and mortar like Ikea,

trying to adapt to

online. But both

have strengths

the others want.

Wayfair is just one of

many retailers coming for
Ikea. For now, Ikea is still
on top, but can it

stay there? Or will

the growing marketplace level

the playing field?