Hello everyone. I’m Anna Pawlak-Kuliga, CEO of IKEA China.
Three years ago, I got an opportunity to start to work in China as the CEO of IKEA Group China. By that time, I immediately realized it would be a unique opportunity. I was very excited and feel a great privilege and the responsibility because I know China is a very important market for IKEA, and one of the most rapidly growing countries in the retail industry. It is a very complex but exciting market. In my opinion, if we want to understand the world and consumer behavior, learn more about the cutting-edge approached, its ecology and potential from a different perspective, one must pass through China.
Technology innovation has profoundly transformed China's retail industry, setting it apart from the rest of the world. With means such as e-commerce, social media, mobile payment, community buying, gaming, short video and livestreaming shopping, China's retail sector continues to offer novel ways for consumers to purchase products. Over the past decade or so, China's total retail sales of consumer goods have reached record highs and the e-commerce market continues to grow. Some forecasts show that by 2021, China is expected to be the first country in the world where more than half of total retail sales are from online sales; meanwhile, leveraging artificial intelligence, big data research, and new consumption scenarios, China's retail industry continues to innovate and bring inspiration to the world.
My key driver in transforming IKEA is to make sure IKEA will be ready for the future. Throughout our history, IKEA has always been for the many and our vision is to create a better everyday life for the many people, and this has been driving us as a brand. In the more than 20 years since we entered the mainland China market in 1998, IKEA has had a rapid development in the China market, and we have participated in and witnessed the rapid development of the Chinese economy. At the same time, we have seen the role technology has played in China's development, we have seen changes in Chinese consumers' purchasing behavior, consumer ecology, and we have seen changes in their expectations for their life at home.
As a customer-centric company and as a home furnishing retailer, consumers' home wishes and their life at home are the starting point of everything we do. That's why two years ago, we launched the biggest transformation of IKEA in China, followed by a localized "Future+" strategy for the Chinese market to get closer to consumers.
Over the past two years, as we actively drive forward "Future+" strategy, we delivered great change. We are ready to serve more consumers; we explore new store formats; we enhance our digital capabilities; and we utilized our expertise of the life at home, helping our customers realize their dream life at home. From there, we have gradually built an integrated omnichannel ecosystem with 36 offline touchpoints and 5 new online channels from 25 offline touchpoints in China. Our landed milestones including opening IKEA *** all-sized store in Shanghai Yangpu, IKEA city shop in Shanghai Jing’an, and customer remote support center, and we have also launched IKEA App, IKEA Tmall store and IKEA shoppable WeChat Mini-program. Through omnichannel services, we have expanded our service coverage from 100 million people to more than 1 billion people, we have transformed from a cash-and-carry model to a true omnichannel company, and we have built a very diverse ecosystem.
It has been a wonderful journey that has profoundly changed IKEA China. I am very proud to be part of this transformation that helps us better steer for the future. I’m also exceedingly happy that we are able to reach more Chinese consumers with our services and create wonderful experience and memories for customers who visit IKEA, no matter through online and offline touchpoints.
At the same time, as a forward-looking retailer, we have been thinking about how the future of retail will evolve. We are already digitalized, data-enabled, *** art and convenient. what is the next step for retail?
Today, in a world where there is abundant consumer goods and unprecedented purchasing convenience, what will be the future role of the store?
In today's world full of individualized needs, cultural and community diversity, should merchandising still be uniformed and standardized in the way it provides inspiration?
In a world where information is at your fingertips, rich and transparent, is interpersonal communication still central of retail?
There is no doubt that for IKEA, the “key” to the future lies in the hands of consumers, as well as in the of every families’ real-life pursuit and dream of life at home. "People" were, are and will always be the "core" of retail.
Over the past 20 years, Chinese homes have evolved from being purely functional to more emotionally driven spaces, and consumers have evolved from needing basic functionality to desiring spaces that are beautiful, welcoming and practical. Homes are no longer just a space to fill with furniture, they are places where consumers can express their personalities and realize their unique aesthetic preferences. Last year's COVID-19 outbreak has also accelerated the shift in expectations. Nowadays, consumers can no longer be classified as buyers—they are people with distinct lifestyles and increasingly diverse emotional, spiritual and material needs. They are not just consumers but explorers, expressers, and co-creators.
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Therefore, retail’s role is also shifting from meeting the rational needs of consumers to meeting the more emotional and spiritual needs of consumers. Today's commercial retail spaces should not just be a one-way exporter of culture and experience, or a place only sell products and services. They must become places where emotions and values merge, become platforms and venues for people to meet and have experiences rather than solely to serve as spaces where commodities circulate.
Technology is empowering the transforming and upgrading the retail industry, enabling better, more seamless, more integrated, more fluid experiences. New retail formats should be meeting real world trends, exploring richer, more relevant retail experiences, encouraging and inspiring more inclusive ways of life, community and communication, meeting diverse needs of the many people, enabling integration and innovation and remaining wholly people-oriented. In this way, retail spaces can still be meaningful, relevant and continue to be vibrant for a long time.
The new launched IKEA “Home Experience of Tomorrow” is the physical embodiment of IKEA's new retail concept, also the first ever of its kind in the world. People who are familiar with IKEA may know that it was remodeled from IKEA Shanghai Xuhui Store which also is IKEA’s first store in the China mainland market. For me personally, this store is very important and meaningful. Three years ago, the first thing on my first day at work, I came to visit Xuhui store. I observed how we served customers and how we worked. I heard a lot, I learned a lot, I understood a lot. It was a wonderful experience. At the same time, I also feel emotional as I knew that changes were about to happen here. I knew that creating a future-oriented retail space is one of the most important tasks for IKEA's transformation, and the Xuhui store will be an important witness to our continuous exploration and development.
In 1958, we opened the first IKEA store in Älmhult, Sweden. In 1998, we opened the first IKEA store in Shanghai, China. In 2021, we open the door to the future as we unveiled “Home Experience of Tomorrow”, marking a new chapter of IKEA's development in China.
When I step in the new IKEA Xuhui store again three years later, it is reborn and have a new look. We are here to usher in a new retail experience in home furnishing. We provide Chinese consumers with an innovative, immersive, and trend-setting life-at-home experience, and offer a space for exploration and social co-creation.
The new “Home Experience of Tomorrow” vividly demonstrate a future-oriented “home” that constantly bring positive influence through the innovation and upgrade in spatial layout, shopping experience, interpersonal interaction, and sustainable practice. We have redesigned the shopping flow based on peoples’ at-home needs. We build up customizing living experience and exploration space to showcase emerging trends and future lifestyle possibilities, allowing you to experience and get enough inspiration from diverse gestures of life while shopping. More imaginative designs are reflected in our brand-new social sharing elements: three multi-functional squares, street foods, community hubs to dedicate more space for inspiration, fun and re-charge. We wish the brand-new “Home Experience of Tomorrow” will meet consumers' needs for self-expression in the limited space of their homes by offering an enhanced shopping experience and products designed to match their preferences. In addition, we hope to help build emotional connections between like-minded consumers by providing content and platforms for communication and co-creation.
全新的“未来家体验空间” 通过在空间结构、购物体验、人际互动方式和可延续实践方面创新升级，生动演绎了一个面向未来的、能够带来努力影响的 “未来家”。我们对购物蹊径举行了重新设计，以人人的真实居家生涯场景为基础，使消费者可以凭证需求直达响应商品区域。我们设置个性化的生涯体验和探索空间，充实连系潮水趋势和未来生涯方式，让来店的主顾体验到生涯的多样姿态，充实获取灵感。更多具有想象力的设计体现在我们全新的社交共享元素中，三大广场、小食站点、社区中央让消费者充实享受互动的兴趣、充电休息。我们期待全新的“未来家体验中央“可以知足消费者在有限的家的空间中自我表达的需求；通过提供交流、共创的内容和平台，辅助消费者与志趣相同的群体确立情绪的纽带。
During the journey to create the emotional connects with the many people, we also know that home is no longer only about the house we live in, the community and the environment are the bigger home we care about. To create more positive change in our communities and on the planet is also the trend we believe in. Sustainability is in IKEA’s DNA. To achieve the commitment of “Positive to the people and planet”, IKEA is continuously committed to providing inspiring products and solutions that support sustainable life at home, developing the climate-friendly circular economy and creating positive social impact for everyone along the entire value chain.
You will find we have sustainable practices and exploration throughout our new “Home Experience of Tomorrow”. We are committed to environmentally friendly green operations, encourage emission-free travel, and take proactive steps to save water, energy and energy use. Shanghai is the first city in IKEA world to achieve zero emission delivery and now 90% of the customer delivery order are using EV solitons. We have established a new circular hub to provide more affordable products to help more people live a better life at home. At the same time, sustainable products podium, wall banners, sustainable tips, and sustainable food choices that are everywhere in the store will inspire and assist more consumers in making more sustainable choices in their daily lives. We hope that the “Home Experience of Tomorrow” will act as the sharing platforms to enable circularity in the local community, introducing new ideas in how to live a better and healthier life, within the limits of the planet.
Home is the most important place in the world. While the world of retail may continue to change and evolve, what remains constant for IKEA is our concern and curiosity for the many people's homes and daily lives. That's why we listen to our customers and understand what they need for their home life and what the future of home life will be. This is the foundation for IKEA to better serve Chinese consumers.
The past year has been a year of dancing with changes. Home life has changed like never before, and people started to rethink the meaning of life at home and the relationship between people and the environment and the planet. IKEA wants to get into the details of the real home life of the Chinese public and support them in their home dreams. For this reason, IKEA China teamed up with experts from different fields inside and outside the industry to conduct in-depth interviews and quantitative research with pioneering home life enthusiasts in first- and second-tier cities across China, resulting in the launch of the first life at home trends report for the Chinese market.
Among the 3 aspirations and 6 trends we identified in the report, we find that people are placing more emphasis on their physical and mental health and relationships with their families, exploring more suitable lifestyles and redefining their own homes. Chinese consumers are looking for new and different forms of value to improve their lives and homes and are looking forward to contributing to society and sustainability.
In this fast-changing world, "living" has become a highly imaginative and inspiring social topic, and the format of "home" will change in response to people's emotions and needs. A better home life should not only be accessible, vary from person to person, but also fit to the new reality. IKEA has always focused on the needs of people, respected their lifestyles, and designed products and home solutions around their needs and lifestyles. We believe that in the future, the Chinese home will become more personalized and a place where people can explore and find answers. IKEA is a home furnishing brand that is committed to create value to the consumer, employees, and the planet. IKEA will always live to our vision to create a better everyday life for the many people.
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