Ikea's change of direction driving sales online and in stores

Furniture and home furnishings retailer Ikea UK has announced full-year sales of £1.97 billion, representing an increase of 5.9%.

The company said that in-store visits in the UK increased by 4.5% to 59.8 million, while 199.3 million people visited the website – a jump of 13.4% year-on-year. Online sales ballooned by 14.4% and they reportedly represented 15.5% of total sales in the 12 months to 31 August 2018.

Ikea has made several changes to its online offering, but it is in fulfilment and formats – with the opening of several new smaller stores set up with click & collect customers in mind – where a significant switch in direction has been made. Two new customer delivery centres and a parcel unit were opened in London during the year, with Ikea saying these have reduced delivery lead times and grown the number of parcel deliveries by 65.9%.

Javier Quiñones, who heads up Ikea in the UK, said: “Our stores will always be an important part of the Ikea brand when it comes to inspiration, touching and feeling our products and this is reflected in the increase in visitation of 4.5% on last year.

“In the last financial year, we continued to invest in our existing stores including the total refurbishment of Ikea Nottingham, it’s just like new. We also revamped the textiles department in Milton Keynes, giving more space for customers and co-workers to co-create together.”

However, Quiñones acknowledged that the role of the store is changing and that “people want to shop in a number of different ways and count on brands to offer them services that reflect the way they live”.

He added: “That’s why we are focused on providing a seamless shopping experience and want to give our customers the choices they expect, no matter how they choose to shop with us.”

Ikea opened two new stores in Sheffield and Exeter, and it is set to open in Greenwich in spring 2019. A planning studio on London’s Tottenham Court Road has also been announced.

The planning studio represents a purposeful push by Ikea to open in more urban areas, and at just 400 sq m in size the store does not actually hold any stock. Specialising solely in kitchens and bedrooms, the store is for customers to visit, plan their rooms with 3D technology, or book a one-to-one appointment with expert staff.