IKEA boss Mirja Viinanen is shaking up the big box retailer in Australia

“You need to go back and be very agile when it comes to how you want to expand, and where you spend the money.”

Conveniently accessible

The first of these IKEA order sites will be up to 500 square metres and will open in north-west Melbourne, followed by Newcastle in NSW by the end of the year.

It is a major change for a business that has traditionally owned most of its stores outright – IKEA holds a $1 billion-plus property portfolio – but Ms Viinanen said consumers want IKEA’s products to be more conveniently accessible.

There will not be any hot dogs or soft serve on site – the focus is on assisting customers to create dream kitchens and wardrobes – think inside door lighting and soft close drawers.

Ms Viinanen is also keen to further penetrate online. Pre-COVID, IKEA generated about 12 per cent of its sales online, but it now sits at about one-third of group sales, which reached $1.62 billion in the full year to August 31, 2021, according to accounts lodged with the regulator.

After several years of bottom-line losses, IKEA swung back to a $7.8 million profit. Gross profits reached $623 million, but the local group pays millions back to its parent company, Ingka Holdings BV in the Netherlands.

Despite starting the year with six of the 10 stores in lockdown and a competitive landscape, whether it be Bunnings, Kmart or pure play online retailers such as Temple & Webster, Ms Viinanen has confidence in the retailing outlook and IKEA’s ability to beat last year’s numbers. She also has plans to open a first store in New Zealand.

Everyday sustainability

And it is not just all about store expansion – Ms Viinanen is chief sustainability officer.

“One day, we should not even have to have sustainability managers in companies. It should be everyday business decisions,” she said.

Ms Viinanen grew up on a farm in Finland surrounded by forests and with a lake nearby. She said being in nature was a core part of who she is, just as it is for IKEA.

She left home at 18 years old for Germany, where she studied economics and met her husband. The 54-year-old joined German-Austrian furnishing company Lutz before the rival Swedish retailer scooped her up in 2011 and sent her to Japan. She moved back to Germany with IKEA before taking the top job in Australia.

“I have to say the way German people are structured, how they do business, how they understand how we need to achieve the goals, I think it is very straightforward, and I like it. The Finnish people are quite stubborn. They are not the biggest small talkers, but we are good listeners,” she said.

The flat pack furniture maker, which was founded in Sweden in 1943, has introduced more than 30 big-impact, sustainable-focused initiatives globally, with some in Australia.

A clean energy storage initiative was launched to support the South Australian power grid as IKEA aims to achieve 100 per cent renewable energy by 2030.

The retailer is using high-end technology to meet some of its sustainability goals, such as robotic automated box cutters and shredders in the distribution centres, which, it says, has saved 1107 tonnes of cardboard over three years by using the correct size box cut on demand for shipping products.

According to recent research undertaken by IKEA, nine out of 10 Australians believe businesses can do more to reduce emissions, and Ms Viinanen is firmly committed to delivering on those expectations.

Other initiatives include its circular hubs in stores where shoppers can buy floor stock or get furniture that others have returned through the buyback scheme.

“All of this should be everyday business decisions, as part of business helping to create better everyday life,” she said.

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