A phased launch of Ikea’s transactional website is expected to occur throughout 2007. The website will be highly popular, and is a further example of the retailer’s increasingly flexible business model.
Ikea is preparing for a pilot launch of its online shopping service in Nottingham this January.
Ikea has been considering launching an online shopping service in the UK for over two years. However, planning the project has been difficult with the retailer keen to ensure that the site – when launched – will be able to cope with expected high order numbers from day one. This expected high demand stems from the popularity of Ikea’s 14 stores, which in recent years have caused it much negative publicity due to overcrowding and poor customer service. The retailer is determined not to leave itself exposed to more criticism that would surely occur if it had trouble fulfilling online orders.
The launch of a transactional website is an example of Ikea’s willingness to be more flexible in order to grow sales. As well this, the retailer has become increasingly flexible in the design and location of new stores. Though it has taken some time, Ikea has recognised that to grow its store estate more quickly, it must be more creative and flexible.
This involves developing multi-storey stores (above the usual two storeys) in town-center locations on brownfield sites – a very different looking store from its big box, out-of-town, two-storey format that it has stuck with since entering the UK in 1987. With one of these stores now open and a second due in 2007 in Coventry, going forward Verdict believes the majority of new stores will be in this new format – though Ikea still has a preference towards its more orthodox store design.
The online shopping trial launch will occur in Nottingham in January after an internal trial over the next few weeks. It is likely that throughout 2007 the geographical area covered will expand first to the Midlands and then to the rest of the UK. Helping Ikea launch this in the UK will be the experience it has gained from operating e-retail sites in Germany, Denmark and Sweden. However, with traffic to the sites expected to be higher than it has experienced in these countries, Ikea is right to be cautious, and ensure it is well prepared before the site is launched nationwide.
Source: Verdict Research