Ikea to Improve its Shopping Experience … By Pushing Consumers Online
Ikea is infamous for its warehouse-size retail locations which are laid out like a maze, which leave consumers wandering around aimlessly for hours. I mean, who hasn't gotten lost in an Ikea? With its roots as a catalog brand, the company is getting back to direct selling — albeit in a different channel. Ikea's President and CEO Peter Agnefjail said in a conference call on Friday that the company is focusing heavily on making e-commerce a bigger part of its business.
While noting that Ikea is still in its infancy when it comes to e-commerce — the retailer did see traffic to its website increase to 1.5 billion visitors in its latest fiscal year, compared to 1.3 billion in the year prior — Agnefjail said customers are more willing to experience the brand's furniture online than ever before.
Yet online selling still remains a challenge for Ikea. The company's business model relies on consumers driving to its out-of-town outlets to touch and feel its merchandise — and figure out how they can put it together when they get it home. Adding incremental online sales without taking away business from stores is where Ikea is trying to get.
"Ikea was slow to embrace the online channel, but has been investing heavily over the past couple of years," said Maureen Hinton, an analyst at researcher Conlumino in London, in a recent Bloomberg article. "Integrating an online offer, meeting the expectations of the modern online shopper, keeping prices low and making a profit is not easy for big-ticket items, so it's understandable that it's honing its service before rolling it out to all markets."
Currently, Ikea sells online in only about half of the countries it operates. Ninety percent of the 9,500 items offered in its stores are online, up from about half a few years ago, on a global basis. In the U.S., 70 percent of its store products are offered online. The goal is to enable e-commerce in every market in which Ikea has a store.
Let's just hope the online shopping experience is a little easier (or at least the site navigation is better) than it is in-store.
What are your thoughts on Ikea's e-commerce plans? How has your company dealt with the challenge of growing online sales without cannibalizing brick-and-mortar sales? Let us know by posting a comment below.