Ikea search­ing for ways out of the labyrinth amid shift­ing re­tail land­scape

The Expositor (Brantford) - - NATIONAL NEWS - JAKE ED­MIS­TON

TORONTO — De­spite sales growth and in­creased traf­fic to its stores, Ikea Canada is still look­ing at ma­jor changes, ex­plor­ing new store con­cepts that don’t re­quire an af­ter­noon spent wan­der­ing through its maze-like show­rooms.

Chief ex­ec­u­tive of­fi­cer Mar­sha Smith said Wed­nes­day the fur­ni­ture gi­ant is try­ing to stay ahead of mas­sive shifts in con­sumer pref­er­ence.

And that labyrinth show­room, she said, “isn’t for ev­ery­one.”

“We are ex­plor­ing new con­cepts,” she said, point­ing to the new Ikea Plan­ning Stu­dio project in the U.K., which skips the large show­room in favour of in-store con­sul­ta­tions be­tween cus­tomers and staff.

“I mean, we had 30 mil­lion visi­tors last year. So, happy we’re do­ing some­thing right. But of course, you can’t stay the same.”

The re­tailer is also look­ing at start­ing a pro­gram to let cus­tomers bring in their old Ikea fur­ni­ture to trade for a gift-card, if staff deems it to be in good enough con­di­tion. The sell-back pro­gram — which would es­sen­tially turn Ikea’s As-Is sec­tion into a sec­ond-hand store — is a main part of Ikea’s at­tempt at ex­tend­ing the life­span of its fur­ni­ture and elim­i­nate waste.

Ikea saw eight per cent growth in Canada with $2.39 bil­lion in sales in 2018, ac­cord­ing to an an­nual re­port re­leased Thurs­day. Among the re­port’s high­lights: a 10 per cent jump in on­line visi­tors to 104 mil­lion, $241.57 mil­lion in on­line sales and 2.2 mil­lion meat ball plates.

“Of course, we are in a rapidly chang­ing re­tail en­vi­ron­ment. So we’re very proud that we man­aged to have a year where we had eight per cent growth,” Smith said.

The Cana­dian fur­ni­ture re­tail mar­ket has seen the ex­pan­sion of on­line re­tail­ers like Way­fair, and es­pe­cially Ama­zon, which is up­end­ing con­sumer ex­pec­ta­tions across the re­tail in­dus­try.

“I think the big­gest chal­lenge, in a word, is Ama­zon,” said Mau­reen Atkin­son, a con­sul­tant at Toron­to­based re­tail con­sult­ing firm J.C. Wil­liams Group, adding that the ex­pan­sion of the on­line e-com­merce be­he­moth is “one key driver that is keep­ing re­tail­ers awake at night.”

“It’s very hard for re­tail­ers to keep up with them, never mind try and out­wit them.”

In 2018, Ikea opened stores in Hal­i­fax and Que­bec City, but backed away from plans to open a store in Lon­don, Ont. The Lon­don store was part of a years-old ex­pan­sion plan that now needs to be re-eval­u­ated for the cur­rent re­tail cli­mate, Smith said.

“I think it would be very ir­re­spon­si­ble that we just con­tinue with that plan with­out con­stantly re-eval­u­at­ing,” she said. “Life in re­tail is chang­ing all around us. Con­sumer ex­pec­ta­tion is chang­ing. It cer­tainly was not any­thing to do with the area. It’s more about what the con­sumers want.”

What many con­sumers don’t want is the kind of do-it-your­self project that is at Ikea’s core. “We are mov­ing a bit to­wards a ‘do-it-for-me’ so­ci­ety,” Smith said. Ikea has re­sponded by part­ner­ing with the on­line plat­form TaskRab­bit to con­nect Ikea cus­tomers with free­lancers who can as­sem­ble their pur­chases. The project launched in Toronto last month, with plans to ex­pand to Van­cou­ver later this month.

“Hav­ing just 14 stores but still man­ag­ing to be the mar­ket leader is some­thing that we’re re­ally proud of,” Smith said. “But, that said, I think it’s im­por­tant that we do still con­tinue to ex­plore new for­mats.”

POST­MEDIA FILES

Ikea saw 8 per cent growth in Canada with $2.39 bil­lion in sales in 2018.

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