Stay-at-home measures increase IKEA’s online sales substantially

By Rahul Vaimal, Associate Editor
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During the pandemic, the online sales of IKEA, the ready-to-assemble furniture and accessories business headquartered in Sweden, received a major boost as millions of people turned their homes into temporary schools and offices.

In a statement the company said that online revenues rose 45% over the 12 months to August, led by 4 billion visits to its website. The retailer’s fastest-growing segment was outdoor furniture, with sales of office furniture also performing well, an IKEA spokesperson said.

In three new countries, including China, the company started selling online. Overall, revenue slipped 4 percent to $46.7 billion, with several of its stores forced to close for several weeks during lockdowns.

Even as stores reopen, online sales remain high, it added. But amid early signs that customers may not return to their old buying patterns, the Swedish furniture retailer intends to keep opening physical outlets.

IKEA opened 33 new stores during the period, including in Moscow, Seoul, Shanghai, Middle East and Macau, amid the pandemic and the increase in online sales. Further, it plans to expand into new markets such as Mexico and the Philippines.

Demand for household products

During the pandemic, household goods sales held up better than other categories, saving retailers such as IKEA from the economic pain that contributed to extensive job losses and bankruptcies elsewhere. IKEA added 6,000 people to its worldwide workforce, increasing the total to 217,000.

In a statement, Ingka Group, which runs 374 IKEA stores, said that life at home has become “more important than ever for people which has led to the repurposing of the home in many ways.”

According to market research firm NPD Group, household item sales were up more than a quarter in the three months to August compared to the previous year. IKEA added that “families transformed kitchens into classrooms, bedrooms into offices, and backyards into amusement parks, defining 2020 as “a homecoming year.”

Customers still want to “touch and try” their products, IKEA said. “We are pleased with the growth of online sales, but also very pleased that customers still love our stores,” and noted that during the period, 825 million shoppers visited its outlets

The company said it would continue to use a “complete consumer strategy,” providing smaller city center showrooms, traditional IKEA suburban stores and online fulfillment centers.