Ikea un­packs new model

Com­pany’s Ir­ish web­site records sales of €17.3m in first 10 months after launch Ikea changes strat­egy and piv­ots to­wards on­line sec­tor as a source of growth

The Irish Times - Business - - FRONT PAGE - MARK PAUL Busi­ness Af­fairs Correspondent

■ Staff in the Ikea store, in Bal­ly­mun, Dublin. The Swedish home fur­nish­ings gi­ant is rul­ing out fur­ther ex­pan­sion of its store net­work in Ire­land, after a strong per­for­mance on­line fol­low­ing its en­try a year ago into the e-com­merce space. Ikea has over the last 18 months been closely linked with po­ten­tial de­vel­op­ment sites in Cork and Dublin, and is re­ported to have held dis­cus­sions with lo­cal au­thor­i­ties.

Swedish home fur­nish­ings gi­ant Ikea is es­chew­ing fur­ther ex­pan­sion of its store net­work in Ire­land, after a strong per­for­mance on­line fol­low­ing its en­try a year ago into the ecom­merce space.

Ikea has over the past 18 months been closely linked with po­ten­tial de­vel­op­ment sites in Cork and Dublin, and is re­ported to have held dis­cus­sions with var­i­ous lo­cal au­thor­i­ties.

How­ever, Clau­dia Marshall, Ikea’s mar­ket man­ager for Ire­land, said yes­ter­day that it “has no plans to open any ad­di­tional stores in Ire­land at the mo­ment”, on top of its Dublin store and a smaller “or­der and col­lect” out­let.

This con­trasts with what Ms Marshall said a year ago, when she sug­gested Ikea was on “a growth agenda in Ire­land, [al­though] there is noth­ing spe­cific I can con­firm.

“We are in di­a­logue with part­ners about ex­pand­ing in the mar­ket, and in the fu­ture we will see the next step”.

Growth plans

Ms Marshall yes­ter­day said Ikea’s on­line di­vi­sion is now cen­tral to its Ir­ish growth plans, as it an­nounced Ir­ish sales of €181.5 mil­lion for the year to the end of Au­gust, up 7.4 per cent year on year.

This equates to an av­er­age €15 mil­lion a month.

The Ir­ish web­site, which only opened for busi­ness in Novem­ber, recorded sales in the 10-month pe­riod of €17.3 mil­lion.

Cur­rently, Ms Marshall con­firmed, more than €1 in ev­ery €10 spent by Ir­ish shop­pers at Ikea is spent on­line.

Its Ir­ish web­site re­ceived 17 mil­lion hits over the course of the year.

“We want to be where the cus­tomer wants us to be,” she said.

“Our growth strat­egy is on­line.” Ikea’s strat­egy glob­ally has also piv­oted over the last year or so to­wards the on­line sec­tor as a source of growth.

Fur­ni­ture sales

Ikea em­ploys 730 staff here, up by 25 over the year to the end of Au­gust.

Its staff are based pri­mar­ily at its Bal­ly­mun store in north Dublin, with a smaller num­ber based at its or­der-and-col­lec­tion out­let in Car­rick­mines in south Dublin.

Ikea said it now held an 8.7per cent share of the Ir­ish home fur­nish­ings mar­ket and it claims to be the num­ber one web­site here for sales of fur­ni­ture.

“Our in­vest­ment in multi-chan­nel re­tail­ing this year was in di­rect re­sponse to the chang­ing needs of our customers, and Shop On­line was a big part of this jour­ney,” said Ms Marshall.

Among var­i­ous on­line ini­tia­tives, she said Ikea was in­tro­duc­ing Skype ses­sions for customers with its kitchen de­sign staff.

Clau­dia Marshall: said Ikea’s on­line di­vi­sion is now cen­tral to Ir­ish growth plans

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