“We have seen that the excitement is very big, and we are very happy about that. We are welcoming everybody. The consumers just need to remember we are for the many, which means we are for those people that have a thin wallet and big dreams when it comes to their home.”
Viinanen is in charge of 11 stores across Australia and now New Zealand, with Auckland’s store the third-largest location in the region at approximately 34,000sq m.
She’s been with Ikea since 2011, working in Germany and Japan before taking on the job in Australia and New Zealand.
Ikea’s New Zealand store will feature roughly 7500 products over two expansive floors, ranging from kitchen utensils and cabinets to appliances and full bedroom suites.
Kiwis will be able to make use of the business’ partnerships with Mainfreight and NZ Post for nationwide delivery from day one, with 29 pick-up points available, operating as one of Ikea’s first omnichannel store launches worldwide.
Perhaps the most impressive feature of Ikea is its prices, which on first glance during Ikea New Zealand’s media day appear to be quite competitive.
Viinanen was unable to comment on the business’ profit margin or pricing structure, but said it varied from product to product.
“We are very keen to see how the New Zealanders are thinking about the affordable prices, surprisingly affordable prices.
“Competition is exactly the right thing when it comes to how we can improve all of us as retailers, the customer experience and the customer journey as well. When it comes to the affordable prices or pricing for the retail business, I do believe competition is the best regulator. Nothing else is needed.”
Viinanen confirmed the business had completed analysis of its competitors and suggested Ikea may have the most affordable prices in many of the categories it competes in.
For the likes of The Warehouse, Briscoes, Harvey Norman, Kmart and other retailers with similar product categories, it’s hard to understate the pressure they will be under.
Previous analysis from Forsyth Barr’s Paul Koraua and Rohan Koreman-Smit suggested that Ikea would take 50 basis points off Briscoe Group’s 15% share of the furniture, floor coverings, housewares and textiles market.
The analysts forecast that Ikea would generate $191 million in sales, capturing 6% of New Zealand’s retail market.
When considering current consumer confidence levels and the highly promotional environment that major retailers have been forced into recently, how and what they will do to compete with the Swedish giant remains to be seen.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
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