A Man Who Truly Changed the World Has Died. Goodbye, IK, Founder of IKEA

He solved a worldwide problem: the gap between poor domestic circumstances and good taste in living.

At 12:15 pm Swedish time on January 28, IKEA's official Twitter account announced that Ingvar Kamprad had died at 91. Sweden's King Carl XVI Gustaf told reporters that Kamprad was "the man who made Sweden famous around the world."

Everyone knows the story: the boy who peddled pencils became the richest man on earth, and looked, to the end, almost ascetic.

He started the company at 17. Seventy-five years later, IKEA Group's 412 stores reach 49 countries, and the average store runs to more than 37,000 square meters. By the end of 2017, IKEA's total sales had hit 38.3 billion euros, store visits topped 930 million, and the catalog, printed in 32 languages, reached 210 million people.

By Forbes's count, Kamprad was at one point the fourth-richest person in the world, worth $28 billion. The New York Times obituary described his singular thrift. That value was enforced strictly in the company's culture — Kamprad wrote in The Testament of a Furniture Dealer, "Start with the little things. Wasting resources is a crime."

Kamprad had the traits business leaders often share: a prodigious memory, a hands-on streak, the ability to reel off raw-material prices and exchange rates from memory, and to convert between units of timber volume without pausing to think — logs into finished boards, or Polish zloty into US dollars. He was tireless, and patient. He knew how he affected the people around him and used it to steer them: he let subordinates argue freely, and knew exactly when to step in and make the call himself. The classic case was the debate over the "Multi-purpose system" (MPS), which ran for 30 years.

Employees have also described this leader's authoritarian side to reporters. A former IKEA executive told The New Yorker in a 2011 interview that although he still admired the company, "it can be suffocating." According to Johan Stenebo, a saying went around inside IKEA: "It doesn't matter what Ingvar says — what matters is what he means." People had to read the supreme leader's will out of every sentence, every word, even every syllable and every punctuation mark.

Kamprad had been retired from IKEA for 32 years, and off the board for more than four.

Around the time he left the board, Kamprad, like other founders of his generation, was troubled by the question of how the family business would carry on. IKEA runs through a Dutch charitable trust and a tangle of holding companies, all controlled by the Kamprad family and structured to rule out any possibility of IKEA going public or being broken up. But his judgment was coming into question. In 2008, worried that online sales would eat into store traffic, he used his veto to stop IKEA from investing in e-commerce — a decision later read as a missed chance. Since his retirement in 2013, little has been known about Kamprad's three sons, and some people doubt their ability to run the company.

Still, no one can deny that Kamprad was one of the most inventive entrepreneurs in the world.

1. Where the Low Prices Come From: Building a Whole-Chain Furniture Business, From Pine to Desks

Johan Stenebo wrote in The Truth About IKEA that price and volume are the core of the IKEA machine. "Without that core, nothing else could happen. This price-volume structure is about as simple as it gets: use volume to force down price — promise suppliers you'll buy a substantial quantity, then demand a discount in exchange for a contract running several years."

One side of the "volume for price" strategy is that IKEA cannot risk letting a supplier handle more than 70% of production — a lesson from the 1963 supplier boycott: more volume isn't always better, and fewer suppliers isn't better either.

In 1963, Kamprad opened IKEA's first overseas store in Norway, then expanded into Denmark. The low prices caught the attention of competitors and suppliers, who formed an alliance and boycotted IKEA together.

To solve the supply problem, Kamprad turned to Poland, going straight to timber suppliers and furniture makers, with the aim of building a model of "raw-material sourcing + in-house design + in-house production + in-house sales." It was probably the hardest stretch of his working life, and it was then that Kamprad started drinking heavily.

The advantages of owning the whole chain were obvious. It let Kamprad do what he had imagined — sell good design cheaply — while still making money everywhere else. IKEA required its final prices to be at least 10% below competitors', which meant it had to turn a profit at every stage of the value chain: procurement, distribution, product development, in-store operations.

To know the profit margin at each step, Kamprad had to build his own rules of thumb, detailed enough that they could only come from years of talking directly to people in the trade. He knew how many trees could be planted per acre in Ukraine, and how many square meters of board a single beech log would yield. What astonished his assistant Johan Stenebo was that Ingvar wasn't only fluent in converting timber quotes; he was just as quick with glass, cotton, foam plastic, oil and silver, and he had a firm grip on the structure of every market that touched IKEA, directly or not.

Stenebo gives another example in The Truth About IKEA. If a coffee cup sells for 5 kronor, IKEA's target should be 1.5 kronor of factory production cost, 1.5 kronor of IKEA profit, and 1.5 kronor of tax. The real workings are more complicated, but this is exactly the foundation on which IKEA designs and makes everything it sells.

2. Design Isn't Decoration. It's Where Cost Control Starts

On balancing design against cost, there is no better example than the Lack side table.

In 1979, one of IKEA's most iconic products, the Lack side table, went on sale for $7.99. Marcus Arvonen, one of IKEA's lead designers, explained the process to The New Yorker: "Usually the brief you get is a price and a style. For instance: can you design a plastic spatula? It can't cost more than 1 euro, it has to do what a spatula does, it has to be gray, and it has to be plastic."

Starting every design from a price is the most distinctive thing about how IKEA designs. The whole-chain model plays its part here too.

Take the Lack table. IKEA designed it as "part of the wood IKEA buys," not as a standalone product. IKEA is the world's third-largest retail consumer of wood, after Home Depot and Lowe's. The wood goes first into the most expensive product lines; the offcuts become particleboard, which is then cut into 20-by-20-inch squares to make the Lack tabletop. The body of the table was built with cost in mind as well, using a technique called "board-on-frame" — solid wood outside, cardboard filling inside.

3. Why Flat-Pack Packaging Matters

Gillis Lundgren was not, in fact, the first person to design flat-pack furniture. In 1949, a Swede named Fiolke Ohlsson had already designed a chair you could assemble by hand, and patented it. What Kamprad did was make flat-pack furniture the foundation of IKEA's business model.

In 1953, IKEA's fourth employee, Gillis Lundgren — who designed the Billy bookcase — was moving house when it occurred to him that he could take a table apart, fit it in his car, and put it back together at the other end. He passed the idea on to colleagues.

In 1956, IKEA's first flat-pack furniture went on sale, and "flat-pack" became one of the core elements on which IKEA built its global market and its supply chain.

Flat-pack packaging brings at least four advantages. Assembly is handed straight to the buyer, which saves some cost, so the furniture can be priced lower. It expands how much stock an IKEA store can hold, since only the showroom pieces need to be assembled and displayed. On delivery, logistics are cheaper and faster not just for the shopper but for IKEA — on the same fuel it can ship ten times as much merchandise as its competitors. And finally, flat packing pushed IKEA's designers toward a cleaner, simpler aesthetic, which let Swedish design play to its strengths.

4. What the Catalog Changed

Before a unified market existed, mail order was the only business that could cross geographic limits. Aaron Montgomery Ward, of Chicago, invented the model in 1872.

In 1948, Kamprad began selling cheap furniture, copying competitors by using the mail-order format. Every morning at 6:50, a milk truck pulled up punctually at the farm gate to collect the goods and carry them to the train station.

Mail order did raise furniture sales, but customers were often unhappy with what arrived, saying it didn't match the catalog. In 1952, Kamprad bought a carpentry workshop on the Älmhult farm, on the spot where his grandfather's shop had stood, and turned it into a furniture showroom.

"That was the moment the modern concept of IKEA took shape. In essence, we used the catalog to pull people into the store to look at the showroom, and then finish the purchase there. That's the prototype of today's IKEA store."

That little booklet became the IKEA Catalog, which now takes an entire department to keep running. As noted above, the roughly 300-page booklet has a cumulative print run of 2.85 billion copies across 72 countries, second only to the Bible. Every year it eats 70% of IKEA's marketing budget — not only because it shows off the newest products and design ideas, but because IKEA uses it to put across its own values, and because it registers how people in each era define the "ideal home."

We told the story of IKEA's secrets in an article devoted entirely to the Catalog. You can find it in the further reading section.

5. It Sells Swedish Taste, and Ends Up Merging With Tastes Everywhere Else

Bill Moggridge, who ran the National Design Museum in the US, called the IKEA look "global, functional minimalism." "It's modern, but also fairly neutral. It avoids obvious local character, and that's what lets it use scale to push prices down."

To meet the specific needs of local markets, though, IKEA does an enormous amount of research every year. As we have reported before, IKEA has a separate home-life research department that studies the latest trends in each market. That emphasis on research goes back to 1985, when IKEA first entered the US. IKEA had changed nothing about the products it sold in Europe, and only after launch did it find that its cabinets and bed frames didn't match the dimensions of American homes, and its curtains were too short.

After that, IKEA began adjusting product mixes and sizes for particular markets, and adding products with local character — chopsticks and fly swatters in China, for instance. Even so, 95% of its products still follow the same standard set by headquarters in Sweden.

In recent years, to attract more young people and push product innovation, IKEA has gone into more cross-industry collaborations. In earlier years these tended to be narrow, showing up mostly in prints and materials — the French fashion designers who worked with IKEA last year, Pınar Demirdağ and Viola Renate, were responsible only for print design. Since 2017 the collaborations have become more varied and more substantial: the open-source sofa IKEA developed with Tom Dixon, and the bags and skateboards made with Off-White founder Virgil Abloh and Stampd founder Chris Stamp.

6. It Doesn't Sell Furniture. It Sells an Idea of "Life"

In a paper called "How France Became Ikea-ized," the sociologist Tod Hartman argues that IKEA solved a puzzle posed by the French novelist Georges Perec: the gap between poor domestic circumstances and good taste in living.

In the 1999 film Fight Club, the character played by Edward Norton sits on the toilet leafing through the catalog and says, "Like a lot of people, I was captured by IKEA's idea of home. Seeing something exquisite — a yin-yang coffee table, say — was enough to make me want it."

Kamprad understood this perfectly. "We've always had strong opinions about what a home should be like." The changes in the Catalog make the point best. Since IKEA published its first product catalog in 1951, the Catalog has grown steadily more magazine-like. We summed it up in an earlier article: the opening editor's note has gotten longer, the themes vaguer, the boundaries between sections blurrier, the emphasis has shifted from value for money to creativity, and it now carries more interviews that have nothing to do with furniture.

In a 2016 interview with Dezeen, Mette Hay and Rolf Hay, founders of the Danish design brand Hay, said IKEA's stores were helping Chinese consumers acquire a taste for contemporary design. Mette said: "They're teaching people how to make a beautiful home. I believe they're helping us."

It's worth noting that choosing a piece of furniture used to be a serious decision, because you knew you'd live with it a long time. The New Yorker once described the American habit of keeping a sofa longer than a car, but "IKEA has made interior decorating a far more temporary act... one that changes with an owner's relationships and circumstances."

7. Ten Thousand Products, Sorted Into Four Development Quadrants

IKEA carries more than 10,000 products, and new ones keep arriving every year. Since 2011 they have been sorted into quadrants divided by four styles: Traditional, Scandinavian, Modern and Popular.

Within those styles there are sometimes finer divisions: Continental Dark, Continental Light, Contemporary, Ethnic.

In other words, IKEA doesn't develop new products by chasing each year's trends. Trends are only one input (color is the clearest case). The matrix lets IKEA see what it is missing in the market, and develop products in one particular style deliberately and under tight control. The biggest benefit, of course, is saving money.

IKEA doesn't usually say so in public. In the 2014 Catalog it explained: "We put different materials, designs, details, colors and patterns together to produce a harmony that comes out of collision." That "collision" is not random. IKEA's staff generally start with large furniture in a single style, then pair it with soft furnishings and small items from the same quadrant or one next door. To reach harmony, they will never reach for an opposing style.

8. Cold Zones and Hot Zones: Why It's Hard to Leave IKEA Empty-Handed

The route through an IKEA store is laid out to encourage particular buying behavior. It has become a classic case study in retail flow design.

An internal IKEA booklet talks about "three kings and one queen." The three kings are three categories every product area is sorted into: the item that contributes most to revenue (the bestseller), the item that contributes most to gross margin (the highest-margin item), and the item in the section that "makes people's eyes light up" (the rock-bottom-priced item). The queen is a new product about to become a bestseller, or one that contributes well to margin.

In practice, IKEA divides the whole store into super-hot, hot and cold zones. Bestsellers go in the super-hot zone. The hot zone follows an 80/20 rule, mixing regular products with slower movers. The cold zone uses a handful of rock-bottom-priced items to warm it up.

As for the route, IKEA stores are laid out along a gray main path. "This main path turns every 50 feet, so shoppers stay interested. It's also the safest route — shoppers can follow it without worrying about getting lost," the manager of a New York store once told reporters. The store also has plenty of secret doors that only staff know about — how to get from the children's section straight into the bedroom section, for instance — and these are never opened to ordinary shoppers.

9. What Happens When You Make Customers Do It Themselves?

A Harvard Business School professor once wrote a paper on "the IKEA effect." The finding was that making consumers put in a little effort of their own raises their satisfaction with the product.

Call that another advantage of flat-pack packaging. But when it came to Asian markets like China and South Korea, flat-pack furniture did not catch on easily. Before IKEA arrived, the British home retailer B&Q spent more than two years pushing the idea of DIY in South Korea, got little for it, and eventually pulled out.

Chinese consumers didn't take to it at first either. Zhu Changlai told QDaily in a 2015 interview: "Chinese consumers demand more service. They don't like doing it themselves. There are outside factors too — abroad you can put flat-pack furniture on your car roof, in China there are restrictions on that. Our pricing for delivery and installation also tends toward the low end. We want to give customers a paid service, but one they can afford."

By Zhu's account at the time, China was, along with Japan, the country where customers used IKEA's delivery and installation services most. Three big furniture categories — large furniture, sofas and mattresses, and the Pax system — accounted for more than 85%.

IKEA's answer was to offer more home solutions, such as showing customers how to fit a coat hook on a door without losing space. The other answer was service: after launching a commercial design service in China, IKEA's Xihongmen store in Beijing also began offering home renovation design plans.

10. The Democratization of Home Design

IKEA's idea of democratic design owes a great deal to Swedish tradition. As early as the 19th century, the Swedish artist Carl Larsson painted watercolors of an idealized family life — blond children, golden furniture, teapots, cats, striped cotton cushions. In the 1930s, the social democratic movement spread the concept of "folkhemmet" (literally, the people's home), using the word home as a figure for a harmonious, classless Sweden. After the war, the idea seeped into the Nordic design movement: mass production could let everyone enjoy good design. Sweden's welfare state also built more than a million new homes, and issued new rules on interior design, sanitation and health.

Cilla Robach, a curator at the Nationalmuseum in Stockholm, commented: "What IKEA did was commercialize that concept. Kamprad understood very early how to turn this social-democratic idea into money, and to open up a whole new industry with it." In a sense, IKEA is Lego for grown-ups, delivering in furniture what the postwar adult world longed for — democracy, equality and harmony.

Founded in the 1940s, IKEA became a force that changed how the world buys for the home. Now history is repeating itself. Talk of a rising middle class is back, minimalist taste is back in fashion, and companies from fashion to technology are all discussing the secret to selling a way of life, and the openings created by a new round of globalization.

These are all new chances for IKEA, but the company needs new methods to meet the problems in front of it: how to keep innovating its products, how to remake the way it sells.

In the 1970s, some Swedes unhappy about Kamprad's expansion staged a play in which he was nailed to a cross.

Kamprad's answer was: "What could stop Kamprad?"

Appendix I: Ingvar Kamprad and IKEA, a Timeline

March 30, 1926: Ingvar Kamprad is born.

1943: Kamprad founds IKEA, registering a mail-order company with money his father paid him for doing chores, selling watches, Christmas decorations and stationery.

1948: IKEA begins selling cheap furniture made by local manufacturers.

1950: Kamprad marries Kerstin Wadling; they have a daughter, Annika, and divorce in 1960.

1951: IKEA's first mail-order catalog appears.

1953: Kamprad opens a showroom in Älmhult.

1955: IKEA employee Gillis Lundgren proposes the concept of flat-pack furniture.

1956: IKEA launches its first flat-pack piece, the Lövet table.

1958: The Älmhult showroom becomes the first IKEA store.

1963: Kamprad marries Margaretha Sennert; they have three sons. The same year, IKEA opens a store in its first overseas market, Norway, then expands into Denmark.

1970: IKEA opens stores in Switzerland and Canada.

1973: Kamprad moves to Denmark.

1976: To escape Sweden's high tax rates, Kamprad moves to Switzerland. The same year, he writes The Testament of a Furniture Dealer.

1982: Kamprad transfers control of the company to a foundation in the Netherlands.

1985: IKEA opens stores in the United States.

1986: Kamprad announces his retirement, but keeps visiting stores around the world and directing the company's major decisions.

1987: IKEA opens stores in the United Kingdom.

1990: IKEA opens stores in Eastern Europe.

1994: The Swedish newspaper Expressen reports that Kamprad had ties, before and after World War II, to the Swedish fascist leader Per Engdahl.

1998: IKEA enters China.

2011: Kamprad's wife dies.

2013: Kamprad resigns from the board of Inter IKEA Group, the company at the core of IKEA, and appoints his youngest son as chairman.

2014: Kamprad returns to Sweden to live.

January 28, 2018: Kamprad dies.

Appendix II: The Testament of a Furniture Dealer

1. Product development — an expression of who we are: offer a wide range of well-designed, fully functional home furnishings at low prices, so that as many people as possible can afford them.

2. The IKEA spirit: it rests on enthusiasm, a constant will to renew and to change, thrift, a sense of responsibility, humility before the task, and a simple, unpretentious manner. We must look out for one another and encourage one another. It is a great pity for anyone who cannot or will not join us.

3. Profit gives us strength. Profit is a good word. IKEA earns its profit through low prices, high quality, developing economical products, buying in greater volume, and cutting costs.

4. Start with the little things. Wasting resources is a crime.

5. Simplicity is a virtue. Complicated rules paralyze. Grand plans are often the prelude to a company's collapse. Simplicity and an unpretentious manner give us strength — IKEA people never drive flashy cars or stay in luxury hotels.

6. Blaze your own trail. If we had asked the experts back then whether we should build a big store in Älmhult, they would certainly have told us not to. IKEA has always gone its own way: getting a shirt factory to make chair cushions, a door-and-window factory to make table frames, raising the price of umbrellas on sunny days and selling them when it rains. In fact, the "experts" never thought much of IKEA's business. Fifteen years after the company opened, they brought in a Norwegian consultant to advise it; he stayed one day and left, thoroughly disappointed with the wretched place. He said: "I have nothing to offer you. I'm going home."

7. Concentrating our strength — vital to our growth: you cannot do everything, everywhere, at once.

8. Taking on responsibility — a privilege: the fear of making mistakes is the cradle of bureaucracy, and it harms any process of development. Make full use of your power and your responsibility. Make decisions.

9. There is still so much to do. The future is bright. Let us keep a team of people eager to push forward — they are the ones who turn the impossible into the possible.

Cover image: IKEA's official website