IKEA, the Swedish home furnishing giant, recently unveiled its 10th Life at Home report, shedding light on the evolving dynamics of how Indians perceive and live in their homes.
Fifty percent of Indians say their home is their favourite place to be and 63 percent of Indians shared that they feel positive about their current life at home. One of the standout findings of the report is the profound sense of home pride among Indians. Susanne Pulverer, CEO of IKEA India, emphasised this sentiment, stating that the fact that Indians prioritize their homes as the most important place in their lives is a significant advantage for IKEA. In an exclusive interview with Storyboard18’s editor Delshad Irani, Pulverer shared how the insights help IKEA create better experiences for consumers and she also shared the highlights of IKEA’s India journey.
Edited excerpts.
How has the past year fared for IKEA but also share your thoughts on IKEA’s India journey so far? Give me the highlights.
We have seen so many synergies between IKEA, India and Indian homes. When we talk to Indians, when we visit Indians’ homes and when we do research on how people live and what they think, we see so many similarities. Indians are very home proud and see the home as the most important place to be. The love for the family, for the children, for food, it all puts us together. And we feel very welcome for the five years we have been operating in India. This is a journey we are on and where we will continue to build our accessibility to the many Indians and to be affordable to the many Indians.
In Davos at the World Economic Forum Ingka Group deputy CEO and CFO recently said that IKEA is going to cut prices and up to 20 percent price reduction in more than 250 articles. It will be implemented in the coming weeks, of course. And I’m going to quickly quote him, he said, “We have a long term vision to create a better life for the people. So, we have a long term approach at everything we do and the time is ready with high inflation with high interest rate.” Can you shed more light on the pricing strategy, especially in the Indian context, and will we see more such measures going forward?
We have seen a positive development when it comes to getting better prices on the products post-Covid when there has been a lot of inflation and increased costs on raw material, transports and everything. So that’s what we immediately will give back to the customers and the consumers worldwide. That is what our CEOs and the Deputy CEO are referring to in Davos. Of course, that goes for India as well. We are currently working on how we can further invest in lowering the prices on the number of products that we know are loved by our customers. You will see more in the coming months.
Let’s talk about the Indian consumer, you were mentioning earlier how home-proud Indians are, for instance. While every market and its consumers have unique attributes, dig a little deeper into the Indian market and consumer insights that are driving your marketing strategies in India?
We are always building on our curiosity of what’s happening at home. Home visits are essential for IKEA for many years. We have done more than a thousand in India only to understand in depth what’s happening in the home. It’s not just to look at how the home is furnished, what kind of furniture and things. But to really understand what’s happening. What are the rituals in the home? What are the needs of the people living in their homes? What are their dreams? What can we do to offer something that is meaningful? That’s something that is ongoing every year. On top of that, we do the research. The Life At Home study is in its 10th year. We have talked to a quarter of a million people in 40 countries to understand more about what is important and what we can do to serve the many people. It’s the fifth time we did it in India. Every time we get the result, we get more insights, more understanding. We can also then further develop our offer to better serve the many Indians. This year, for example, we talked a lot about well-being, on sleep, how people are planning their lives in the coming years, if they are going to move, and what is essential in the home. Last year’s report was about storage and how you organize your home. And we learned that 9 out of 10 Indians actually think that they are not happy with how it’s looking. Here we have many solutions that we can offer and that has been a focus for this year in our offer to the customers and the consumers.
I’ll draw on what you said and ask you exactly who IKEA’s typical Indian consumer is? We are a young and growing population. But who is the customer and how have they changed or evolved since IKEA launched in 2018?
The starting point is that we are for many people. We don’t want to be too narrow in how we look at our customers, but very inviting and inclusive. India is a very diverse country with people from many different backgrounds and possibilities, household incomes and living situations, etc. So we try to see how we can be relevant for the many. We have low prices and really affordable products. We have around 1,000 products below Rs 200 that we think can be the entry point for many. If they can’t afford furniture, at least some accessories for the home or try the food that you can experience at IKEA. So that’s one way to meet the many. When you come to the store, you will see all kinds of customers.
Read More: 56 percent Indians planning to shift homes in next two years: Ikea report
IKEA has its iconic catalog, a physical book that was almost like a collectible for an entire generation of shoppers. It was such a key part of experiencing the brand. Which brings me to my next question about how the buyer’s experience and journey has evolved? In India especially where offline shopping is still preferred even as we make the leap to digital mobile channels and the number of online shoppers is increasing rapidly. How is IKEA responding to these changes?
It has been a big shift for IKEA, if we talk overall, to move from brick and mortar. From a very successful way of meeting customers with the big blue boxes where you can have the full experience, a full day out with all activities and the inspiration you get in the store to new ways of meeting new needs of consumers. We have to be accessible, to make it a smoother journey, to also be able to consume online. It’s easier when we start from scratch, like in India where we are already building the omni-channel, compared to countries where we are more mature and have to turn. India is a very fast evolving society and the digitalization rate is amazing. The competence that we have on the digital side is incredible. We can drive a lot of development. And also the formats. We have learned over the years that yes, the full experience in a flagship store, we believe a lot in, but we need to complement it with smaller size formats to be more accessible and closer to where people live.
So will we be seeing a lot of these smaller format stores in India going forward?
I think you will see the mix. We are still going to build the full-size stores like we have projects in Delhi now, which is the next big market. We are trying and testing relevant formats depending on the market and the needs from the customers there.
How many of your customers are shopping online versus getting in the store and buying products from IKEA?
It’s between one-fifth and one-fourth of the sales that are currently happening online. We see a lot of growth online, and we believe it’s going to grow even further. So, it’s a big potential to further develop it. As people’s lives are busy, it’s not so easy to always take the time to travel to an IKEA store. We believe this is going to grow in importance. At the same time, I see it’s important also to have the offline experience where you can really see and get inspired and see solutions in a different way than you can on the online market.
We’re also in a very big year for India. Apart from other big events happening in the country, 2024 is also an election year. Give us your outlook for 2024, what are you optimistic about and what are some of the challenges that you foresee?
The Life At Home report was released just a few weeks back. It shows that when we ask Indians how they think about the future in a two-year perspective, 71 percent say they have a positive outlook. If we compare it to global, it’s 47 percent. People believe in the future. Then we ask about the home and they say sleep and well-being are the most important things for them. We asked about how the Indians see moving and if they will move in the coming years, and it’s a quite high figure of people moving – 56 percent are planning to move within the two coming years. We know when you move, you will have a lot of needs for home furnishing and new solutions. So, we believe we have a very positive role to play here. We have a positive outlook. Overall, India and the economy look very promising, with zero risk for recession and a lot of growth coming. We look forward to these coming years to be good years.