The Impact of New Retail Transformation on Financial Performance: A Case Study of IKEA

Abstract

With the rapid advancement of the internet and digital technologies, the new retail model has become a key direction for the transformation and upgrading of the traditional retail industry. This paper uses IKEA, a global home furnishing retailer, as a case study to explore the impacts of its new retail business model on financial performance. The research examines IKEA’s financial performance from 2016 to 2021, a critical period of transformation. Through trend analysis and comparison with industry peers, the study evaluates IKEA’s financial indicators in three key areas: profitability, operational capability, and growth potential. The findings show that, in the initial phase, the new retail model significantly boosted IKEA’s revenue and brand influence, driven by the rapid growth of online channels and enhanced experiential marketing. However, the deeper transformation also led to challenges, such as a structural rise in operational costs and slower accounts receivable turnover. External factors, such as the global pandemic and supply chain disruptions, further increased pressure on its net profit growth. Based on these results, the paper offers strategic recommendations for IKEA and other traditional retailers undergoing digital transformation, focusing on business model optimization, financial management improvements, and organizational restructuring.