IKEA crafted itself into a cult brand by Ken Bernhardt Regents' Professor Robinson College of Business, Georgia State University Atlanta Business Chronicle - November 25, 2005 As anyone tuned in at all to what's happening in Atlanta knows, IKEA opened a store in Atlantic Station at the end of June. Although IKEA is an $18 billion company with 227 stores in 33 countries, this was only the company's 23rd store in the United Stales. The cover story of the Nov. 14 issue of Business Week was "IKEA: How the Swedish Retailer Became a Global Cult Brand." The definition of a cult brand usually refers to the passion customers have for the brand, feelings that go way beyond mere brand loyalty, and IKEA's Atlanta grand opening certainly demonstrated the passion customers have for this brand. One customer, Roger Penguino, pitched his tent seven days before the opening, winning the $4,000 gift card awarded to the first customer. By the opening, he had been joined by 2,000 others. How has IKEA managed to generate this level of passion among its customers? There are a number of things that IKEA, along with other cult brands — such as Starbucks, Harley-Davidson, Krispy Kreme and Virgin — do that turn their customers into brand evangelists. They create a clear positioning of what the brand stands for. IKEA is more than just value-priced, assemble-it-yourself furniture and home furnishings; it is the curator of people's lifestyles, a complete lifestyle solution for consumers. IKEA does things differently from other companies — it determines what the price should be and then challenges its designers to create a beautifully designed product that can be sold for that price. This cost obsession is fused with a strong design culture. How does IKEA do it? By saving on the things that its customers don't care about, including using particle board instead of wood on many items, shipping things flat (even cabinets, dressers, chairs, etc.), having consumers carry items home instead of paying for delivery, and letting consumers assemble the units themselves (using only one  Allen wrench). One of the company's credos is "wasting resources is a mortal sin." As a result, employees serve as the models in the 160 million catalogs the company sends out each year, and they have a goal of lowering prices 2 percent to 3 percent each year. To ensure the best designs at the lowest prices, they use 1,800 suppliers in 33 countries. They know their customers and customize their offerings. They sell products people want to buy. IKEA hired Gallup to poll 14,000 consumers in 27 countries concerning their attitudes toward the bedroom. The manager of the bedroom line in Sweden also personally visited people's homes in the United States and Europe to inspect their closets. She learned that Americans prefer to store most of their clothes folded while Italians like to hang them up. Thus, they designed deeper drawers for the furniture in the United Slates. They visited homes of Hispanics in California and discovered the use of bolder colors, the need for larger tables, and the display of family pictures throughout the house — leanings reflected in IKEA's California stores. The restaurant in the store in Atlanta serves sweet tea and grits. The company regularly has Anti-bureaucracy Weeks where the executives, including the CEO, work on the sales floor or run the registers. They provide a unique experience. A visit to IKEA is an outing. Customers can drop their kids off at "Smaland" when entering the store, which enables them to shop hassle-free. The Atlanta IKEA store is 366,000 square feet (greater than six football fields and equal to Wal-Mart Supercenters) on 15 acres. It has 52 room settings, including four complete model homes furnished for real-life, small-space conditions. They have wide aisles and the displays are fully accessorized, complete with books and picture frames. They provide free paper tape measures and pencils for taking notes and writing down item numbers. Midway through the store they have a restaurant, enabling people to catch their second wind and keep going. There is detailed signage throughout the store documenting the specifications for the items on display (greatly reducing the need for salespeople). They continually innovate, with 30 percent of the more than 10,000 items in the store being new each year. On any given day, 20 percent of the customers of any of their stores drive more than 60 miles to come to the store, and the average visit is for 4.5 hours. Interestingly, IKEA and other cult brands spend very little money on advertising. Instead, they do things that generate widespread word-of-mouth comnnnication about the company and its values. When IKEA opened the Atlanta store, they partnered with Star 94 (WSTR-FM), inviting people to apply for the post of Ambassador of Kul (Swedish for fun). More than 1,500 people submitted essays on why they deserved to win the $2,000 IKEA gift card prizes. The three winners had to spend the three days before the store opened living in the store, sleeping in the bedding department, taking cooking lessons from the restaurant's chef, and playing various games. This generated considerable publicity for the store. The company also has a very impressive Web site. It has features like "New to IKEA: What Should I Expect?" and "A day at the store." The Web site also has consumer guides for bedrooms, mattresses, etc., and detailed descriptions for thousands of items. They treat their employees well. The company's culture is one of egalitarianism with few titles for managers (who regularly fly economy class, even the senior executives). Fortune magazine named IKEA one of the "100 Best Companies to Work For" in 2005, and Working Mother magazine named the company one of the "100 Best Companies for Working Mothers" in 2005. All workers (including those who work less than 20 hours per week) are eligible for benefits as well as coverage for domestic partners and their children. The company provides discounts for weight loss and smoking cessation services as well as free subscriptions to health and wellness magazines. Work arrangements include flex time, telecommuting and job sharing. The "IKEA Spirit" calls for workers to "take care of each other and inspire each other." As a result, the company has experienced a continuous decline in its sales staff turnover. As Bill Marriott has said, "Show me how a company treats its employees and I'll tell you how the employees treat the customers." None of this is rocket science, but it is amazing how few companies truly do the things outlined here. That is why the few companies that do generate such intense loyalty, creating raving fans. IKEA certainly has earned the cult-brand status it has achieved and is a welcome addition to the Atlanta retailing scene. If you haven't visited the store yet, hop in your car and go now; it'll be time well spent.