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