IKEA online sales to help furniture giant flourish amid pandemic

News.com.au- Many retailers won’t survive the economic shock from corona virus but the furniture giant has cherished the time to expand a key division.

The government enforced lockdown during the height of the coronavirus pandemic landed the biggest blow in decades to the already struggling Australian retail sector.

As the population retreated indoors, trading became near impossible for many outlets but the unique period forced the local Ikea division to bring forward its online push.

The chain’s Australian boss Jan Gardberg said he was caught off guard by the willingness of consumers to shop from home, allowing the furniture giant to stress test alternative ways of doing business.

This was boosted through deliveries, online workshops and its contactless click and collect where shoppers drive through the stores and shop assistants place purchased items in their cars.

“We have been talking about omnichannel development in retail and the big surprise was we’ve almost tripled our uptake in our online business over this two month period,” he told news.com.au.

“We are in the midst of planning for next financial year and in many ways we are rewriting a lot of the strategies, bringing them forward quicker than we initially had planned.”

Before the pandemic shook the economy, about 14 per cent of Ikea’s sales in Australia were through online channels and it is now on track to lift this segment to a quarter of all business.

The company currently services its online division from a small number of large fulfilment centres but it will now begin stocking deliveries from its many stores scattered across Australia.

It’s a change Mr Gardberg admits shoppers won’t notice physically in store, but he ensures it will provide a noticeable difference to the speed and price of deliveries.

“To optimise both the cost and keep providing low prices to consumers, we can increase capacities of store fulfilments,” the local Ikea boss said.

“This means online customers order as normal but the ones that live in a close primary market area around our stores are going to receive orders from the closest store.

“With that we can bring down the cost but also we can reduce the CO2 emissions per shipment.”

Ikea have adopted to the unique trading conditions during the virus. Picture: Julian Finney/Getty Images
Ikea have adopted to the unique trading conditions during the virus. Picture: Julian Finney/Getty ImagesSource:Getty Images

Most of the population across the country experienced the mad rush to set up home work spaces before the lockdown came into effect and would be aware of how severely limited stock became.

Any furniture that included a surface to hold a computer or general work station flew out of the stores at Ikea.

“We had a big shortage of all of our work desk solutions and in the end we switched over to present all the surface solutions we had,” Mr Gardberg said.

“We experienced an enormous uptake, we had a sales increase of about 400 to 500 per cent during a short period for work desks and work chairs.

The Swedish retailer has brought forward its push online. Picture: Daniel Leal-Olivas/AFP
The Swedish retailer has brought forward its push online. Picture: Daniel Leal-Olivas/AFPSource:AFP

IKEA’S SMALLEST STORE IN THE WORLD

The Swedish retailer opened its first tiny store in Sydney last year in its bold plan to adopt to Australian consumers.

The first of the “home planning studios”, located at Warringah’s Westfield Shopping Centre, has a floorplan of just under 100 square metres – a fraction the size of the existing 37,000 square metre sites across the country.

Mr Gardberg has worked with the company for more than 35 years and knows how the brand has been adopted in various international markets.

“One thing that has struck me here in Australia is you really have to make things super convenient and accessible,” he told news.com.au.

“People are very stuck in their routines and what they want to do, and to break that you need to do something extraordinary.

“We are not a discounter, so this is why our strategy has to be to place ourselves into your everyday behaviour patterns and make it more convenient with digital formats.”

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