Ikea wants to expand ecommerce into all markets

Ikea is serious about ecommerce. The Swedish furniture retailer wants to expand its web business into all markets. The CEO of Ikea sees its website generating 10 percent of the company’s total revenue by 2020. Currently the online business of IKEA accounts for about 3 percent of total sales.

In an interview last week, IKEA’s CEO Peter Agnefjaell revealed that online sales exceeded 1 billion euros for the first time in the year ended in August, thereby accounting for about 3 percent of total sales. But that’s not the end of it. The corporate executive expects the share of online sales will increase to 10 percent by 2020. In five years, IKEA also wants to be active online in all its current markets.

IKEA invests in new online systems
It’s an ambitious plan. Maybe not for every retailer of this size, but IKEA has a business model that’s less suited to online selling. Shopping at IKEA is all about driving out of town to an outlet where customers wander through the store, not only finding what they need, but also buying stuff they didn’t know they needed. And IKEA’s unique selling point, selling affordable furniture, is possible because of the fact it sells flat-packs customers need to turn into bookshelves and closets themselves.

By heavily investing in new online systems and distribution networks however, IKEA hopes to introduce its online business in more markets. But that’s not something that will happen in a heartbeat. But it should be able to reach a target of 50 billion euros in sales by 2020.

Online sales in additional markets in 2016/2017
At the moment new online systems are tested in Ireland, and IKEA hopes to start online sales in additional markets next year or in 2017. The Swedish company currently has stores in 28 countries, of which 13 also have a dedicated retail website. “Ecommerce will become a bigger part of our growth agenda”, Agnefjaell said. “We also expect that we can get more customers to our existing stores and combine that with better products.”