Ikea is mulling selling its ready-to-assemble furniture and home goods online through third parties, Reuters reports. The Swedish retailer, known for inexpensive, but well designed furniture, plans to test such sales starting some time next year, though no contracts have been signed, Inter IKEA Group CEO Torbjorn Loof told Reuters.
Update: In a statement emailed to Retail Dive, the company stated: "At IKEA we are curious and want to explore new areas and get new insights on how to reach and serve more of the many people. One part of that is that we are open to the idea of piloting and testing making IKEA products accessible through other online platforms than our own."
Last spring, the company overhauled its convoluted corporate structure in order to smooth operations and jump-start lagging e-commerce business.
The idea that made Ikea the global phenomenon it is today — flat-packed furniture that fits into a car — was to have the customer take care of the final stages of manufacturing and the last-mile of delivery. The company known for its cheap-but-chic furniture now operates some 300 stores in 27 countries, and does roughly $36 billion in sales annually.
But the logistical sweet spot may be why the company has been so slow to e-commerce. Former Ikea CEO Peter Agnefjall attempted to spin Ikea's slow migration to digital into a positive, saying last year that its late entry into online commerce could allow more nimble mobile capability from the outset. "We could have been faster, I could agree to that," Agnefjall told CNBC last year. "But by being late we can skip a step in the technology development, straight to mobile and tablet.” Agnefjall resigned suddenly in May and Loof was appointed in his place.
Unlike many retailers that have long relied on catalogs to drive home delivery, Ikea has leveraged its catalog to build the brand and make it easier for customers to navigate its massive stores, probably because the size and weight of furniture delivery makes it particularly expensive to sell online. “This is an area where shipping fees can really take a toll because you’re moving furniture,” Jaimee Minney, VP of marketing and public relations at Slice Intelligence, told Retail Dive last year. “The big challenge, unique to e-commerce, is how best to maximize the shipping and handling aspect. When you have gigantic stores you don’t have to think about it as much.”
Online furniture sales have emerged as a major growth area in e-commerce, rising 18% in 2015, second only to grocery. Some 15% of the $70 billion U.S. furniture market is now online, according to IBISWorld data. In this environment, Amazon and Target are each reportedly looking to boost their furniture sales, in a challenge to online retailer Wayfair, which does offer free shipping for all orders over $49.
While Reuters speculates that this yet-to-be-launched Ikea initiative could have it selling through Amazon and other online marketplaces, partnership details are elusive. Walmart's new Hayneedle online furniture unit, which was acquired along with Jet.com last year, and Walmart's own marketplace, among others, would also be possibilites.