In the late 1980s, IKEA started selling hot dogs at a few of its stores in Sweden. The first one was in the southern city of Jönköping, and after a shaky start all stores in Sweden came to have a hot dog area after the checkout. Ingvar insisted that an IKEA hot dog should cost far less, even half as much, as one you would buy in the city. People should be amazed at how affordable it was, and how delicious. And it couldn’t be just any old sausage, this had to be a frankfurter-quality sausage! It should be the perfect way to end a visit to the IKEA store. However you were feeling out there among the sofas and saucepans, you always had a hot dog to look forward to at the end of it – for just fifty cents. Not one euro, and definitely not one euro twenty cents. Ingvar wouldn’t budge whenever some crafty management group tried to raise the price even a little. “Forget it!” he would bellow when he heard such nonsense.
Do you speak hot dog?
Learning by challenge.
How many brilliant ideas can you get thinking about a hot dog? Quite a lot as it turns out. In the mid-1990s, IKEA realised that the hot dog was a great symbol for good quality at a low price. That may be a lot to expect from a humble sausage, but it became an important piece of the puzzle in thinking freely and innovatively when it came to product development. But let’s start at the beginning, when a hot dog was just a simple hot dog.
The idea of having a far lower price for a product that everyone knew the price of was crucial, and while the hot dog offer was being developed, the hot dog itself came to symbolise the whole idea. Imagine if the price could also be reduced for products that customers are just as familiar with as they are with a hot dog. “They should cost no more than the loose change in people’s pockets,” was Ingvar’s stance. They should be products like consumables, which people buy often and know the price of. IKEA should put all their energy into these ‘hot dogs’ and really achieve almost impossibly low prices.
What he was looking for was a kind of hot dog mentality among his employees.
To communicate his hot dog metaphor, Ingvar did what he usually did – he wrote a letter, by hand, to the people he thought ought to be able to do something about the situation. He established that the range is relatively mediocre in terms of price. But what if IKEA could show that the company was impossible to beat when it came to good quality at low prices? “We must start showing off the impossible IKEA!!! A nice big chopping board for one euro is definitely possible if we join all our great forces along the whole line,” Ingvar writes, finishing off with a resounding, “A dozen or so new hot dogs would taste good!”
What he was looking for was a kind of hot dog mentality among his employees. He wanted them to look at what competitors were charging for coffee mugs, washing-up stands and plant pots. Look at the products people are already familiar with and know the price of. This is where IKEA can really make a difference – making frankfurter quality at a great low price. As it turned out, the hot dog as a symbol of innovative thinking around product development worked rather well, and all kinds of products were developed. Still today one can hear product developers speaking hot dog when discussing their range.
The hot dog remained a firm favourite with Ingvar. So much so, that when he was made a Knight of the 12th Order of the Seraphim, the hot dog made an unexpected appearance in his acceptance speech: “I would just like to add that a good frankfurter in a bun costs just five kronor (EUR 0.5) at IKEA.”