Adapt to thrive: Re-affirming our purpose, products and service offerings - IKEA UK
IKEA UK’s Javier Quiñones releases the company’s annual results, showing total UK sales of £1.965 billion – an increase of +5.9% and explains how IKEA is adapting to changing consumer behaviour.
Starting a new role always comes with lots of firsts. Six months after becoming IKEA’s UK and Ireland Country Retail Manager, there’s already a long list, as I look to build on the successes of my predecessor Gillian Drakeford MBE.
This week is no different, as we release our annual business results, looking back at our performance, progress and successes for the financial year 2018 (FY18).
Despite a very challenging retail environment, we’ve continued to grow and transform our business, delivering a seventh year of consecutive UK growth with total sales of £1.965 billion. This was an increase of +5.9% on last year, cementing our position as one of the UK’s leading retailers and helping us increase our home furnishings market share to 8.4%.
During FY18 we opened two new stores in Exeter and Sheffield, bringing our total number of large UK stores to 21. In October, our first city centre Planning Studio opened its doors on London’s iconic Tottenham Court Road, the country’s capital of home furnishings and design. We also launched our updated People and Planet Positive strategy to set our new and ambitious sustainability goals.
For 75 years, IKEA has defined and redefined the home furnishings market with well-designed and affordable products. Our business model, based on customers visiting our stores, collecting their own furniture and assembling it themselves, has helped IKEA grow into the world’s largest home furnishings retailer.
But while this model has given us a successful foundation, our entrepreneurial spirit means we’ve always recognised the need to adapt to make sure we live up to our business promise, to create a better everyday life for the many people.
This spirit couldn’t be more relevant now. It would be hard to ignore the impact that changing consumer behaviour is having on the retail sector, and we are not immune. One big factor driving this change is the way people live, shop and interact with brands.
I only have to look at the way my daughters use technology to understand that the next generation interacts with the world differently and with a new set of expectations. We are witnessing a rapid rise in e-commerce, as well as increased urbanisation. Globally, by 2050, around 70% of people are predicted to live in cities.
With so many of us owning a smart phone, convenience and bespoke shopping experiences are now the norm, especially when you can buy a bookcase on the bus or a new outfit from the comfort of your sofa. On the flipside, when it comes to planning for larger, more complex purchases, we still seek expert advice. This is why we recently opened a new city centre Planning Studio on Tottenham Court Road, our first high street location and part of our growth strategy to increase accessibility.
Stores will always have an important role when it comes to inspiration, touching and feeling the product, but the overall offer needs to evolve and become an experience that consumer’s value – across all channels and touchpoints.
As retailer, if we view this period of change as an opportunity to harness advances in technology, to re-think and re-affirm our purpose, our products and our service offerings, this moment in time will become a catalyst for us to innovate and better meet the needs of our customers. This is exactly what we aim to do at IKEA.
As our founder, Ingvar Kamprad, said “A company which feels that it has reached its goal will quickly stagnate. We will move ahead only by constantly asking ourselves how what we are doing today can be done better tomorrow.”