Ikea Prepares for Future of Mega Cities and ‘Thin Wallets’

10/04/2018 - Ikea Group, the world’s largest furniture retailer, is getting ready for a future where people have little to spare: both in their wallets and in terms of space.

The Swedish furniture giant is now abandoning its custom of planning five to 10 years ahead, setting a new three-year approach to keep pace with a rapidly transforming society.

The strategy will ensure that the company caters to an urbanized world where people “live in small spaces,” have “thin wallets” and “little time,” according to Chief Executive Officer Jesper Brodin. Company research shows that by 2030 about 60 percent of the world’s population will live in large cities, double from now, he said.

“We will take three years where we increase our ambitions for our business targets and where we also partly transform how we meet our customers,” he said in a phone interview on Tuesday.

The company is in the midst of a transformation where it’s placing more stores in city centers to better reach customers. It has opened more than a dozen small showrooms in cities such as London and Paris to better cater to urban buyers.

Brodin said the strategy is to reach directly into people’s living rooms by increasing its digital focus, online shopping and provide better service to those that need home delivery. The focus on large warehouses will remain, but it will be tempered by other priorities.

“We need to think about where we will open our large warehouses and also a lot of investments in the city centers and then scale that up to our mega cities and then to all countries and markets,” he said.

Overall, the company won’t abandon the low-cost obsession of its founder Ingvar Kamprad, who passed away this January.

“We have a financial plan for all of this, taking into account investments in lower prices,’ Brodin said. “It’s always the no. 1 priority for us.”

The company’s full-year operating profit fell 33 percent to 3.0 billion euros ($3.71 billion) in the 12 months through August, following increased costs to support its expansion and loss of profit from subsidiaries sold to brand owner Inter Ikea a year ago.

Fonte:https://www.bloomberg.com/news/articles/2018-04-10/ikea-prepares-for-future-of-mega-cities-and-thin-wallets

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