Retail giant IKEA Canada continues to show its resilience and strength despite the ongoing COVID-19 pandemic with strong sales in its fiscal year.
The company recently reported total sales increased 11.8 per cent to $2.59 billion for the financial year ending August 31, 2021, while online sales increased substantially by 161.5 per cent to $969.48 million. Reflecting IKEA Canada’s ongoing transformation to become more accessible and better reach customers, however they choose to shop and given pandemic-induced closures, online visits to IKEA.ca and the IKEA app increased by 32 per cent to 236 million.
Geoffrey Macdonald, IKEA Canada’s CFO, said it has been an unprecedented year, with some challenges, but a really successful year for the retailer.
“If we look at pre-pandemic levels, we’ve returned back to growth from those levels,” he said. “It’s been not without a lot of work but what’s been great is how those sales have developed and something we tracked through fiscal year 20 but then also fiscal year 21 is the online versus the typical store sales.
“And of course store sales being challenged with stores being closed but online sales growing dramatically. And that we saw heading into the pandemic, just the shift in consumer behaviour but what we’ve been able to accelerate through the pandemic from a transformative perspective to meet the customer in a good way. It’s great to see how our sales are developing headed into the new way of meeting the customer and how they want to shop.”
The company said the past year brought with it continued shifts in the way people use their homes, and the pandemic has irrevocably changed the way people choose to shop. IKEA Canada’s omnichannel transformation has included new ways to shop, prioritizing meeting customers wherever and however they choose; enhancing in-store experiences; strengthening ecommerce capabilities; and optimizing fulfillment.
Macdonald said the way consumers interact with the brand and interact with their homes is tending toward greater online activity which is obviously a shift from the original model for IKEA.
He said the pandemic offered the company an opportunity to challenge some of the old ways of working and to focus on providing a more wholistic omni channel customer experience.
IKEA Canada Customer Distribution Centres handled 1.8 million orders in 2021 (a 63 per cent increase from last year), while IKEA co-workers filled an average of 4,195 Click and Collect orders per day (up from an average of 645 orders per day, pre-pandemic).
“Demand has been high . . . (we’ve been) a bit of a benefactor for the way our lives changed during the pandemic. How we imagine our homes, how we interact with our homes, is certainly much different,” said Macdonald.
“That has been an opportunity for us and it’s given us the ability to transform how we interact with the customer, but also what we want to offer from an accessibility perspective, how we’re affordable to the right goods and right services and also in the space how do we enhance sustainable operations within how we operate as a company but also for our consumers to enhance their ability to operate sustainably.”
In its fiscal year, IKEA Canada:
- Announced the location of its new small-format shopping experience at the corner of Yonge and Gerrard streets in downtown Toronto;
- Launched IKEA Design Studio, a new small-format concept offering dedicated studio space for personalized design and planning services with IKEA design experts;
- Expanded the network of Collection Points and Penguin Pick-up locations to 42 nationwide;
- Enhanced home delivery through options like Doorstep Delivery, and a partnership between the Swedish Food Market and DoorDash; and
- Introduced in-store experience enhancements, including new shopping functions via the IKEA App and express returns.
“This year, we’ve seen life at home become more important than ever. As peoples’ needs continue to be shaped by the ever-changing world around them, their habits and homes change, too,” said Michael Ward, CEO and Chief Sustainability Officer, IKEA Canada, in a statement.
“For IKEA Canada, that’s what this year was about: helping Canadians create spaces and places that contribute to a better life at home, while strengthening our commitments to neighbourhoods, communities, and our shared home—the planet.
“I’m proud of our many accomplishments as a business, as leaders, and as people. We embraced the challenges that came with leading in the unknown and made incredible strides to meet and inspire customers in a better way. Building on our strengths and taking the lessons we have learned along the way, we will continue to transform our business to become more accessible, affordable, and sustainable than ever before.”
The IKEA brand was founded in Sweden in 1943. IKEA Canada is part of Ingka Group which operates 389 IKEA stores in 32 countries, including 14 in Canada. Last year, IKEA Canada experienced 21.2 million visitors to its stores and 236 million visitors to IKEA.ca and the IKEA app.
Macdonald said the company is constantly evolving and the company knows it wants to be more accessible and more affordable and more sustainable.
“We will always evolve and as situations adjust certainly with a view of ensuring that our co-workers health and safety is paramount as well as our customers, how we can continue to evolve our offering.”
Macdonald said the retailer is constantly evaluating opportunities to grow with more stores.
“We’re very much focused at the moment on developing our penetration in city centres. That is a key element of our strategy to get to more of the many Canadians. Just the density that is in the city centres is so important to us. That is very much a focus because we have been, as we joke in IKEA, in the potato fields, sort of on the outskirts of town,” he said.
“We know the density and the increased densification of our cities. To be able to be truly accessible, be on a transit line, be within walking distance to so many Canadians, that we perhaps don’t have the greatest accessibility to right now, and to bring our sustainable products to, that’s really certainly our focus now.”
