Interview with the head of Ikea Switzerland: “We can feel that many Swiss have less money”

Ms. Others, sales at Ikea Switzerland rose 0.7 percent to 1.15 billion francs this year, despite eight weeks of closure. Did you expect that?

When the lockdown came, we reacted quickly and expanded our pickup points at Ikea locations to a drive-in movie theater. Despite the fact that the stores were closed, the customer was able to collect the requested merchandise by car. We were able to compensate for a good 15 percent of the failures. After the blockade we had a loss of 110 million Swiss francs. I was optimistic when I saw the customers re-entering the stores. But I didn’t think we would match last year’s level.

The collection points, the so-called “click and collect”, existed before closing. What’s new?

Before that, you couldn’t get in by car and load the goods. Before, we only had lockers that weren’t particularly popular with customers. But suddenly they were all full too. They are still actively used now. The demand for Click and Collect has quadrupled compared to the previous year.

Demand has also increased in the online store. This now represents more than 14 percent of 9 percent of total sales. How will Ikea react to the change in purchasing behavior?

A good half of our customers would like to receive the merchandise at their home address. We also see that 50 percent of the people in Zurich do not have a car. But we also want customers who don’t have a car. Customers are price sensitive, they want service, but at a lower price. A week ago we started a new delivery service that delivers the merchandise directly to the front door, but the customer has to unload it himself, so the delivery costs are low.

How much cheaper is this delivery service? A delivery at Ikea normally costs around 99 francs.

A shipment costs 49.95 francs.

What about the “Ikea taxi”?

We started on November 2 with a taxi service with hybrid cars. We worked together with start-up Lucka Box and started at the Dietlikon and Spreitenbach locations to find out if people want something like that too.

How does the service work?

Customers go home with their purchases. Depending on the route, the service costs between 39 and 99 francs.

Are pick-up stations in cities a problem?

We are currently working on that. In particular, we are looking for partners in Zurich with whom we want to work. We have yet to find out where the best locations for these collection points are. There are many people who come to our stores for inspiration but are not interested in taking products home. That is a problem.

When are the first pick-up stations in Zurich?

The time will come next year. We are in discussions with potential partners. Ikea has to go to town.

In Madrid or Berlin there are smaller Ikea stores in the city center. When will this format arrive in Switzerland?

We still have to find out what the Swiss customer wants. So far we are not that far. But we have to find ways to get closer to our customers, that is clear. There is no date yet, but it is our turn.

Will we see such a store in Zurich in the next 12 months?

It will probably take a little longer.

Didn’t Ikea fall asleep completely during this development? Furniture stores like Flying Tiger, Zara Home or H&M Home are already in the middle of city centers. Ikea is waiting.

It’s not about speed, it’s about meeting customer requirements. I prefer to spend a little more time to find the correct format in the end.

And when you’ve found it, will it spread to all Swiss cities?

For the next year and a half we will focus on Zurich.

Livique, Coop’s furniture store, is right around the corner here in Spreitenbach. Is the competition taking customers away from you?

Mömax also recently opened a shop just a few minutes’ walk from here. That is good for us. Customers from the region come here when they want to buy furniture. Now you can visit different providers. Hopefully they buy from us.

Have you looked at Mömax?

Naturally. I want to know what the competition is doing.

And how does she do it?

They also have nice furniture and many brands, but a different range. I didn’t buy anything though.

Does Ikea feel that in times of Covid many Swiss have less money available?

Yes, we can feel it. We sell more items in lower price categories. And we know that more than 15 percent of the Swiss live on the poverty line. In response to the Covid-19 crisis, we have reduced the price of more than 250 products since September. We have also introduced an organic breakfast for CHF 2.95. Ikea needs to offer the right products to customers who are under financial pressure. This also includes inexpensive delivery to the curb instead of the front door. The offer has only been available for one week. But it is already very successful. In times of Covid-19, price plays a bigger role.

Ikea also accepts used furniture for sale second hand. How do you get that?

We have already recovered 2,000 pieces of furniture and we pay for them based on their condition. We will promote the program. Instead of Black Friday, we are introducing a Buy-Back Friday. This should make more customers aware of the offer. The used Ikea furniture market is large. Needless to say, we are also interested.

Toys and baking utensils were in high demand during the closing. What have the Swiss bought in recent weeks?

Everything that has to do with the home office takes off. This also applies to the garden area. Many have built their own personal oasis on the balcony or in the garden. There is also demand for interactive speakers and lighting for smart homes.

Does Ikea still allow only customers with masks to enter the store, even if they have a medical certificate that exempts them from the obligation to wear them?

Yes, this applies in all cantons that require a mask. We have to protect our employees and customers. We have also introduced a mask requirement for employees in sales and in the office. But distance rules and hygiene measures are even more important. Only 200 of our 2,850 employees can even work from home.

Have you had many cases of Covid-19 among employees?

There have been very few cases and I hope it continues like this.