Will click and collect conversion transform IKEA’s business?
It’s no secret that a large percentage of orders placed online are being picked up by customers in stores. For IKEA, the combination of online ordering and in-store pickup is central to the international furniture chain’s growth prospects.
Yesterday, IKEA reported that it had opened 19 pickup locations for online orders and 12 traditional warehouse stores over the past year. A company press release said this reflects IKEA’s increasing “focus on integrating physical and digital commerce to enable customers to shop in ways that suits their needs.”
According to The Wall Street Journal, IKEA’s click and collect centers typically average about 20,000-square-feet compared to its massive warehouse stores. The 19 locations opened over the past year represent a sizeable jump from three opened the previous year.
CEO Peter Agnefjäll called the initiative “part of the total conversion of IKEA from a traditional brick-and-mortar retailer to a multichannel retailer with the stores at the heart.”
Whatever IKEA is doing, it appears to be working. Total sales for the flat-pack furniture giant were up 7.1 percent over the last year. Same-store sales improved 4.8 percent.
- IKEA Group Presents Another Year of Solid Growth FY16: on Track to Become the World’s Leading Multichannel Home Furnishing Retailer – IKEA Group/Marketwired/Yahoo
- IKEA Opens More Click-and-Collect Stores as Sales Rise – The Wall Street Journal (sub. required)
DISCUSSION QUESTIONS: How do you see click and collect transforming IKEA’s business model? What are the likely results from this effort? What other retailers could benefit from a similar approach?