A WINNING TOUCH
Ikea’s growing online business hasn’t hurt traffic at its stores — where customers like to touch and feel, writes Hollie Shaw.
Marsha Smith likes to assemble Ikea furniture the oldfashioned way — under her own steam, using an Allen key.
But when the new president of Ikea Canada moved to this country in February to take up the helm at the furniture retailer, Smith tried the “do it for me” assembly service: for a variable fee, you can have the furniture put together quickly by a team in your house.
“I actually like to put it together but I wanted to experience the service for myself,” said Smith, a 14-year veteran of the retailer who most recently led the chain’s expansion in Ireland.
“We see assembly as a growing trend, but it’s really situational, depending on the time you have available,” she said, though customers use the assembly service on a surprisingly low number of orders, fewer than three per cent.
“I think a lot of people take really great pleasure assembling something themselves and the satisfaction you get at the end of it.”
The same can be said for customers going to Ikea’s stores despite the steady growth of products and services offered online. Ikea Canada customers will be able to book product assembly appointments online for the first time in a rollout that begins next month.
But unlike many retailers, Ikea’s burgeoning online business has not made a dent in its store traffic, which rose five per cent last year.
Indeed, the retailer achieved record revenue in 2016, with sales rising 14.2 per cent to $2.05 billion in the fiscal year ended Aug. 31. That followed a strong 2015, when Ikea Canada’s sales rose 10.4 per cent.
Online sales rose 41.3 per cent in 2016, and now account for nine per cent of the business.
“If customers are very clear about what they want, they might order online,” Smith said. “But they also still want to touch and feel the fabric on the arm before they purchase a sofa.”
In addition to luring families to spend a day shopping there — operating a restaurant with meal deals and baby food warming stations, having a ballroom where kids can play while parents shop — Ikea is still considered somewhat of a retail adventure for customers, analysts say.
“The stores are kind of crazy, but there is all this experience that happens there, and it certainly is an idea store,” said Maureen Atkinson, a consultant at Toronto-based retail consulting firm J.C. Williams Group.
In addition, Ikea’s expansion into designing kitchens, bathroom and closets in the last decade has drawn people to the store for large items and design ideas.
“It’s difficult to imagine kitchens just looking online,” Atkinson said. “You really have to go to the store and see and touch that, and while you are there, the other thing Ikea does really well is the add-ons,” inexpensive household items such as salad spinners and plant pots. “They are great (at merchandising) those things that you didn’t come to the store intending to buy, but you end up walking out with them.”
Smith said one of the fastest growing areas of that business is in sustainable or reusable products. One of the top-selling articles last year was a new line of portable glass dishware with plastic lids for consumers to take on the road or to work. This year, the company has sold over 300,000 units of the Fortrolig line, while sales of sustainable home products grew 30 per cent last year.