Not anymore characterised only by cheap prices, globalised IKEA is searching for its proof of Swedishness. In small, peripheral Älmhult.
Älmhult is a small rural town in Småland in Sweden. The growth of Älmhult began with the founding of IKEA in 1943 by the 17-year-old Ingvar Kamprad, and the opening of the first IKEA showroom in 1953 and a larger store in 1958. The success of IKEA’s business model and its globalisation increased the importance of Älmhult, as several production-, design- and management functions were kept there. In recent years, Älmhult has experienced several investments in infrastructure, connectivity and housing areas, as more and more people (4500 daily) commute to it. In total, there are about 500 registered companies and 1500 business owners in the municipality, the largest being IKEA-affiliated companies (Ikea of Sweden, Ikea Test Lab, Ikea Corporate Cultural Centre, Ikea Museum, Ikano Bank). With the shift of IKEA from Fordism to post-Fordism and the diversification of its businesses, Älmhult, before important but an unknown node in IKEA world, is becoming not only a managerial and design node, but also a showcase of IKEA’s ideas and values, and a testbed for new products/services.
IKEA is changing
For several decades, the USP (Unique Selling Proposition) of IKEA has been cheap prices, practical storage solutions and average design quality. The Taylorist and Fordist approach to production, management, design, marketing and sales was thus based on efficiency, profitability, mass production and mass consumption. In this production system, Älmhult lost the role of headquarters as the company was divided into several corporations and foundations located in the Netherlands, Luxembourg, Liechtenstein and Sweden in order to ensure the stability of ownership and optimise the costs. Nevertheless, Älmhult remained an important research and development centre, design node and management location, and it retained some of the production facilities.
In the last decade, IKEA has moved towards post-Fordism as it has reinvented its brand, business model and management structure to adapt to market changes and the increased demand for vintage, handmade and customised products (Steven, 2015). Moreover, IKEA’s globalisation and outsourcing of production to suppliers from across the globe is hurting IKEA’s “Made in Sweden” brand and IKEA is trying to strengthen its “Swedishness” protecting it from recent attacks and scandals.
With this shift, Älmhult is becoming an increasingly important city in its vast network of stores, logistical centres, storages and post boxes (Svengunsson, 2012: 27). If for several decades the city of Älmhult was reminiscent of a Fordist company town, it is currently transforming into a post-Fordist company town and becoming a showroom, flagship and testbed of IKEA.
In recent years, several new investments in representative programmes and branding activities in Älmhult have been initiated. In 2010, the Inter Ikea Culture Centre was inaugurated with the “Ikea through the Ages” exhibition of memorabilia, early logos, catalogues and furniture from the 50s to the 2000s on a mere 798 m2 of exhibition spaces (Steven, 2015). Only a few years later, in 2014, it was announced that in 2016 the museum will be moving into the Älmhult’s first IKEA store, opened in 1958. After moving Älmhult store to the outskirts of the city, its original store just next to the railway station will be transformed into a museum celebrating the history of the company and its hugely popular products.
The museum, with a 3.493 m2 exhibition area is expected to attract 200,000 people annually (BD+C Staff, 2014) and is announced to be “’a house of stories’; stories about people, challenges, opportunities, design, homes and home furnishing” (BD+C Staff, 2014) and will try to encourage visitors to take an active part in the IKEA story (BD+C Staff, 2014).
Moreover, the IKEA Vardshuset hotel is experiencing its second refurbishment and rebuilding in last decade. Originally build in 1964, already as a hotel, it was first extended and refurbished in 2004-2007. In 2016 the second renovation will be finished (Vardhuset, 2016). The hotel, furnished with IKEA furniture and serving IKEA food, has the aim of becoming a conference centre for IKEA-related themes and most importantly, one of the venues of the Democratic Design Day, IKEA’s attempt to rebrand itself as an innovative and unique furniture producer. To strengthen its brand, IKEA is launching several new collections and limited edition products in partnership with social enterprises and craftspeople. The Democratic Design Day thus showcases “furniture which interacts with technology, including lights and bedside tables which can wirelessly charge phones and laptops, to ranges which offer ‘mass produced uniqueness’” (Steven, 2015).
Älmhult: not just a symbol, but the real heart of IKEA
Despite IKEA’s parent companies’ being located outside of Sweden (in the Netherlands, Luxembourg and Liechtenstein) and on 301 locations in over 30 countries (Steven, 2015), all communication still needs to go through Älmhult’s office. All important decisions are made in Älmhult and it was Älmhult’s management that envisioned and created IKEA’s business model, based on efficiency, optimisation, cost cutting and mass production/consumption.
Moreover, Ikea of Sweden, an affiliated company responsible for designing most of IKEA products, is located in Älmhult and employs 600 workers (Baraldi, 2003: 6). All IKEA’s products are thus designed in Älmhult, even though a team of international professionals from Denmark, UK and the Netherlands is participating in the design, too. The design team works on around 2000 new products every year, assisted by up to 75 freelancers and well-known furniture designers brought in for one-off projects (Bell, 2015). In order to strengthen the design department and enable faster and better product development with the customer in focus, a New Ikea Democratic Centre (NIDC) is currently being built in Älmhult (RCP Construction, 2016).
Together with other contemporary IKEA investments, NIDC is supposed to create a lively, creative milieu that would attract and retain “Ikeans” and increasingly needed new talent. The municipal strategy that aims at increasing the number of inhabitants, levelling up public services, improving connectivity and creating an attractive brand is providing the necessary support, while the ongoing redevelopment of the city centre (Älmhults Kommun, 2016) is providing the physical support for a “creative scene”.
Besides generating an innovative and creative milieu, Älmhult is a pioneering ground for IKEA’s new products and services – most notably its move into hospitality services, and real estate and construction industry. The IKEA hotel Värdshuset has pioneered IKEA’s entry into hospitality services that recently resulted in the announcement of a new brand and chain of Moxy Hotels in cooperation with the Marriott hotel chain. Moreover, in Älmhult IKEA has built one of its first housing projects already in the 1990s. Nowadays, the BoKlok housing – a housing concept, developed by IKEA and Skanska, which features affordable blocks of flats and terraced houses – is being built all over Sweden (BoKlok, 2016).
The home of home
The main goal of Älmhult’s development strategy is the growth of population, increasing it to “20,000 residents in the long term, while the short-term goal is for the population to grow by at least 1 percent a year” (Älmhult Kommun, 2016). The strategy is in accordance with IKEA development plans and highly influenced by the presence of IKEA in the city. In 2015, the main branding slogan of the city has thus become “Älmhult – Home of home”, based on the fact that Älmhult is the heart of IKEA (Älmhult – Home of home, 2016). Älmhult is thus becoming the spatial embodiment of IKEA, “the home of home”, a showroom of IKEA values and IKEA Concept, a proof of IKEA’s Swedishness.
Älmhult – Home of home (2016) Älmhult – Home of home. Available at: http://almhulthomeofhome.se/instagram/ (Accessed 23 March 2016).
Älmhult Kommun (2016) Älmhults Kommun. Available at: www.almhult.se (Accessed 3 March 2016).BoKlok, 2016
Baraldi, E. (2003) The Places of IKEA: Using Space as a Strategic Weapon in Handling Resource Networks. Available at: http://www.impgroup.org/uploads/papers/4289.pdf (Accessed 23 March 2016).
BD+C Staff (2014). IKEA to convert original store into company museum. Available at: http://www.bdcnetwork.com/ikea-convert-original-store-company-museum (Accessed 23 March 2016).
Bell, J. (2015) Behind the scenes at Ikea’s top-secret furniture lab. Available at: http://www.wired.co.uk/magazine/archive/2015/10/features/behind-the-scenes-ikea-design-lab (Accessed 23 March 2016).
RCP Construction (2016) New IKEA Development Center. Available at: http://www.rcpconstruction.lt/project/ikea/ (23 April 2016).
Steven, R. (2015) Behind the scenes at Ikea HQ. Available at: https://www.creativereview.co.uk/cr-blog/2015/may/behind-the-scenes-at-ikea-hq/ (Accessed 23 March 2015).
Svenungsson, M. (2012) ‘IKEA: Made in Sweden’. THE IRE JOURNAL.
Vardhuset (2016) Vardhuset. Available at: http://www.vardshuset.nu/ (Accessed 23 March 2016).