Maybe furniture?

In the early days, Ingvar kept his stock of pens, watches and stockings at the family farm in Elmtaryd. Orders came in via post or telephone, and then Ingvar, with help from family members, would pack them up in the evenings. Sending parcels to customers at that time was as simple as it was ingenious. Every morning, the milk-collecting lorry stopped at the farm to pick up milk to take to the dairy. Ingvar had convinced them to also pick up his parcels and take them to the post office or railway station. After a few years selling pens, watches and stockings, Ingvar Kamprad saw the potential of selling furniture by mail order. And thanks to his financial success with pens, he had a small amount of start-up capital. But it was a tough industry. Really tough. To survive, he had to act in bold new ways – something that became his hallmark.

But before we find out what Ingvar Kamprad was up to in the late 1940s, let’s take a brief look at what happened in Sweden in the years immediately prior. Just like the rest of Europe, Sweden had been hit by the Great Depression and economic problems of the 1930s. The Kreuger Crash worsened the economic crisis in Sweden. But the Social Democrats’ 1932 election win marked the beginning of a new era, with politicians deciding to invest themselves out of the crisis, rather than saving. Out of this the idea the welfare state was born, and later on the concept of Folkhemmet (literally ‘the people’s home’), whereby the state offered favourable loans to everyone who wanted to start a home. Put simply, the government was investing in people and their homes. Sweden and the Swedes, who had been somewhat spared the horrors of WWII, viewed the future with optimism. So when a young Ingvar Kamprad turned up with his first attempts to sell furniture, it was in a relatively positive climate. A time of faith in the future, where people’s own homes were important. A time when demand for furniture was increasing and people actually had some spare money to make a home.

So in 1948, five years after IKEA was registered, the very first furniture was advertised in a small brochure. A few easy chairs and a couple of tables were displayed to a population that wanted and was able to buy furniture for their own homes. IKEA did still sell crystal jewellery and Argentinian leather briefcases, but it was the furniture that brought success. The next brochure featured even more furniture – a sofa bed from Elfs Möbler in Älmhult and a crystal chandelier from Örsjö. Everything sold out. Customers ordered by coupon, and the factories delivered.

Ingvar reasons about the combination of low price and high quality in the 1948–1949 issue of ikéa-nytt. Some suppliers cheat on quality to keep their prices down. He assures people that this is not something IKEA does. Well, unless customers want products at even lower prices of slightly lower quality. But “because we work with such small profit margins, we can offer prices that are very competitive in relation to the quality”. Ingvar explains how the prices can be so low in the brochure text. “Our low prices – by far the lowest in the land – are possible thanks to a high turnover, direct delivery from the factory and very low overheads.” He had his family to thank for the low overheads. They were all involved in the business and helped out with shipping and administration. And they did a great job. Even so, in 1948 the company had to take on its first employee, Ernst Ekström, to take care of the bookkeeping.

But what else could be done to keep overheads down? Could the purchasing be even more rational, for example? One area where money could be saved, without compromising on quality, turned out to be furniture fabrics. All upholstered furniture at IKEA was sold without fabric. Customers themselves chose which fabric the easy chair or sofa should be covered with. IKEA offered its customers a limited range of suitable furniture fabrics, and if they were uncertain whether it would suit, IKEA was happy to send a small fabric sample. The key lay in the limited range of furniture fabrics, which enabled higher volumes, and higher volumes means lower prices. Ingenious. But it didn’t stop there. What if IKEA started buying the fabrics for all their suppliers of upholstered furniture directly from the textile mills? That would mean even higher volumes and even lower prices. Ingvar realised that individual suppliers would never be able to order these kinds of volumes. The price came down, but the quality remained the same. Perfect. So Ingvar bought furniture fabrics directly from the textile mills and stored them all at home at Elmtaryd. When an order for an easy chair came in, the right size of pieces were cut and sent to the furniture factories. And to keep costs down even more, who did the cutting? Ingvar himself and his family, of course.

Ingvar worked closely with the furniture factories. His ideas about purchasing and efficiency were good for them, and they were probably caught up in his enthusiasm. On one occasion Ingvar asked a Danish furniture factory to make the seat of a chair one centimetre shorter. It made no difference to the chair’s comfort or appearance, but it had an effect on fabric consumption. If the seat were just a little bit shorter, the fabric could be used slightly more efficiently with slightly less waste. The gain from a single chair was of course not that great, but once you get to 100 or 1,000 chairs, that centimetre of saved fabric had quite an impact.

Starting in 1949, Ingvar Kamprad occasionally sent out an advertising supplement in agricultural weekly Jordbrukarnas Föreningsblad. Previously, ikéa-nytt had primarily targeted dealers, and this was the first time IKEA focused on the wider public. The supplement featured in a publication printed in 285,000 copies. And the message? Good stuff at low prices? Partly. The text focused on the everyday lives of the many people, with a message for country folk. It was a kind of manifesto of things to come.

Much later, Ingvar made a comment regarding the text, saying that he wanted to mean something to the many people. The farmers and small business-folk he had grown up with. People whose everyday lives he had seen during his childhood and met when selling his fish and matches. Hardworking people who were careful with their money, and their trust.

The mail order business continued, but IKEA soon found itself at a crossroads. Competition for customers was extremely tough, and price proved to be the only competitive tool. The other mail order furniture dealers were constantly undercutting each other. When his competitors reduced a product from 50 to 45 kronor (EUR 5 to 4.50), Ingvar had to go even further. And the competition responded with even further reductions. Low prices are usually a good thing for customers, but in this case the price war was having an impact on quality, which was getting worse and worse. The low price essentially lost its meaning. The prices were low, but the furniture was of too poor a quality. The result was more and more complaints and returns for IKEA. Mail order companies were getting a bad reputation, and IKEA risked being severely affected. The problem with mail order was that people couldn’t try out the products, touch and feel them, see how they looked and grasp the level of quality. All customers had were the mail order companies’ – sometimes overly glossy – descriptions in the brochure. How could IKEA survive? Were there any new ideas to try? What if IKEA could keep customers’ trust while also making money?

Ingvar Kamprad and Sven-Göte Hansson spent a long time discussing exactly that. Sven-Göte had been employed as an office clerk in spring 1951, and Ingvar later called him one of the most important employees ever. In Sven-Göte he had a discussion partner for virtually everything IKEA. In one of these long talks, the idea of arranging a permanent exhibition of furniture began to take shape. What if people could come and see the furniture they’d read about in the brochure? They could compare IKEA to other furniture retailers and see that yes, the prices were low, but the quality was actually good. A furniture showroom could be a way of breaking free of the downward price and quality spiral. Around the time Ingvar and Sven-Göte were thinking these thoughts, they found out that the Albin Lagerblad carpentry factory in Älmhult was closing down. Ingvar didn’t hesitate. A contributing factor was that the milk-collecting lorry later decided to focus only on milk, and would no longer handle the growing volume of IKEA parcels. Moving the business from the country farm to Älmhult, close to both the railway station and a post office, solved that problem too.

The Lagerblad building became a kind of laboratory for Ingvar and his ideas about selling. There was plenty of room to show what the furniture looked like in reality. In fact there was even space to arrange a sofa and a few easy chairs, lay a rug, and add a coffee table and lamp to show customers what it might look like at home. The former carpentry factory was cleaned out, freshened up and repainted, and the floors were propped up and strengthened. All ready to display some home interiors.

1952 saw the last ever issue of ikéa-nytt. It let customers know that from now on, IKEA would only be selling furniture and home furnishings. All the watches and briefcases and jewellery and pens were sold off at a discount to make way for furniture. The back of the brochure had a coupon which customers could use to order the first IKEA catalogue that only contained furniture.

The Lagerblad building opens on 30 March 1953. The overall style is youthful, and there is great interest. IKEA offers “Your dream home at a dream price” and attracts people from all over Sweden. Permission is sought from the County Board to stay open when people have time to go shopping. On Saturdays, the store is open right up to 8 pm. A lot of Älmhult residents shake their heads at the strangeness of it all – it’s unlikely to last! But the customers do come. And Ingvar Kamprad becomes a true furniture dealer. These were the foundations of IKEA as we know it today. A catalogue of texts and images would attract people to a showroom where they could see, feel and try out the furniture – furniture that would then be delivered to their homes.

This is where IKEA as a company really started to take shape. The family spirit from Elmtaryd – thrift, helpfulness and a sense of responsibility – were transferred to the tiny office in Älmhult.