First of all, we would like to congratulate you with your appointment – How do you feel?
“I’m very happy! It’s really a fantastic opportunity and a dream come true. We have such a strong heritage to stand on, and there are so many opportunities out there. It could not have happened at a better time.
Under Torbjörn Lööf’s leadership, we took steps to complement our traditional stores with more city-centre stores, online shopping, home delivery and assembly. Going forward we will continue this work. We want to make IKEA affordable for many more people, and we want to make IKEA more accessible for many more people. At the same time we want to help many more people to live a more sustainable life at home.
Doing these three things together is a great opportunity for IKEA going forward. A lot of people across IKEA have already put in so much hard work to get this far. On top of that there has been a lot of work to structure and set up an even more solid franchise system that we can continue to build on for many generations to come.
So I think the table is set to continue that journey. Now we can develop even better products, find more clever solutions and create an even more rewarding customer meeting – in an even more sustainable way. I think that’s when we’re at our best at IKEA. Through innovation, constant improvements and occasional fundamental changes, we can create more sustainable products at better prices.
We have lots of good examples already: board-on-frame coffee tables, affordable low-energy bulbs and – coming soon – plant balls in our restaurants and Swedish food markets. The ingredients have just 4% the climate footprint of a traditional meatball, it tastes better, and it comes at a lower price.
There’s a lot to like about that example. If you create something more sustainable and raise the price, people can’t afford it. So you limit its impact. And if you make something affordable at the expense of sustainability, it doesn’t help anyone either. To be successful long-term, you have to put affordability and sustainability together. That’s a lot of hard work! But we’re in a position to lead the way.
For me it’s actually our duty. Our vision is to create a better everyday life for the many people, and we do this by making our products both more affordable and more sustainable. Luckily we have the long-term view and structure to make it possible.
We have 9,500 IKEA products, and our range is very focused. That means we get big volumes for every product. And we’re very focused on a limited number of products that you can combine in different ways. Today we’re looking at each step in the product life cycle – from raw materials through manufacture and distribution and finally to people’s homes. At each step we ask “what can we do differently to prolong its life?” With big volumes like ours, even a small change can make a big impact.
This is not a sprint, and we need to set the right conditions for long-term growth.
IKEA started in Sweden more than 75 years ago, then it expanded to the Nordics, Europe, North America and Asia. Today we’re in a little over fifty markets. Now we’re taking the natural step into South America with our partner Falabella, a South American multinational retail group. We’re working with them to open IKEA stores in Chile, Colombia and Peru.
As I said earlier, we think a lot about the “back-end” when designing new products. The same goes for our stores and e-commerce. We need to have the back-end in place first. So opening stores on a new continent takes time. But we’ll soon be ready.
These kinds of partnerships are key to our success. Our franchise model gives us a strategic advantage: a local anchor and a strong player who knows the market. Of course there is a long selection process to become an IKEA franchisee. We look for companies with good business- and investment capacity. More importantly – we look for companies that share our values. So we’re happy to partner now with Falabella. They’re a great match, and they know the South American market so much better than we do. This is the strength of our franchise system.”
How do you implement the Swedish-based IKEA values into the new markets where you operate?
“It’s a lot of hard work. And you’re never really done – you always have to work on it in one way or another. We were talking about it the other week here in the office. You can visit IKEA anywhere in the world and meet new people you can connect with right away.
It all starts with the recruitment process and continues as people grow and develop within IKEA. Being close to or far from Sweden isn’t really the challenge – it’s the constant changes. So we have to nurture our culture and values in all parts of our business. Worldwide! The IKEA culture and value are our core strengths.
We achieve this by being consistent about our culture and our vision. Our values have always been the backbone of IKEA, and of course it all started with our founder Ingvar Kamprad. Business and People together form our core values, and that’s how we run IKEA still today.
Ingvar always talked about the importance of creating good conditions for everyone that works at IKEA. When you visited a store with Ingvar, he was always engaged with our co-workers. We were at the store at five o’clock in the morning because that was when the truck drivers arrived, and he wanted to know how they were doing. He wanted to make sure they got a sandwich and a place to sit and rest and refresh. And whenever we visited a store, we always visited the staff areas to see what they were like. Again – business and people together.”
What does IKEA look like in 5 years?
“We’ll be more affordable. We will lower our prices even more so that more people can afford us. This is still our number one goal. Our biggest hurdle is to be truly affordable in all parts of the world. For everyone, really.
We’ll also be more accessible. Today our 436 store are a fantastic cornerstone of our customer experience. This year we had one billion visitors, and it’s still increasing. Our e-commerce share is 8% of our total sales, and we plan to continue to grow in all channels. And then of course we’re also testing new formats and smaller formats so we can be in even more places than just out by the big highways. In city centres, but also shopping centres and suburbs. We want to be where people are.
Finally, we’ll be an even more sustainable business. IKEA is committed to make a positive difference on climate change. By 2030 our ambition is to reduce more greenhouse gas emissions than the IKEA value chain emits, while growing the IKEA business. We made a small step this year by reducing our climate footprint even as we continued to grow.
Transforming IKEA into a circular business is one of our biggest ambitions and challenges for the future. It will impact the business in all aspects: from how we develop products and services, source materials, develop the IKEA supply chain, to how and where we meet our customers. This will enable us to prolong the life of products and materials.
So five years from now we’ll be affordable for many more, we’ll be accessible for many more and we’ll do it all in an even more sustainable way. That I promise you.”
You have been working with Ingvar Kamprad and of course he is the founder and icon of IKEA and even of Swedish industry. What have you learned from him and what kind of leader are you and how will you lead the way for the coming years?
“Working with Ingvar was a fantastic opportunity, and I learned a lot from him. But there are two things in particular that super inspire me and I try to do a little bit of myself.
One is that he was constantly curious. Curious all the time about everything actually! And of course he very quickly related it to IKEA. But he was really very interested about what was happening all over the world. He was also very curious about people. This nearly constant curiosity was really a very good skill.
The second thing was that Ingvar was consistent about the big picture – yet he was always open to test, try and explore in the details. He created an amazing balance between consistency and renewal, and I do my best to do keep the same perspective.
IKEA and the Swedish Chamber of Commerce collaboration
We are very happy with the cooperation with the Swedish Chamber of Commerce here in the Netherlands and in many other places as well. There are two reasons for this. One is of course that it is a part of our Swedish heritage and a very good link and connection to Sweden that we value a lot. The second is based on my experience with IKEA in China and Canada, where the chamber provided great opportunities to meet a broad spectra of influencers. It’s a very good vehicle for us to meet other companies, academic resources and the public sector. That’s why I value this kind or cooperation so much.”
We would like to let you know that the support from you is very important for the Swedish Chamber of Commerce in the Netherlands. And since this year, we are celebrating our 60 years anniversary of the Swedish Chamber and we are very happy and grateful that you are supporting this as Exclusive Sponsor together with Handelsbanken.
By Kerstin Gerlagh and Josefina Lund
Welcome to read more Member interviews in the Swedish Chamber of Commerce Annual Review 2019 https://swedishchamber.nl/wp-content/uploads/2020/05/2020_Annual-Review-2019_FINAL.pdf