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Ikea’s online sales increased as people turned homes into offices and schools

The company said in a statement Tuesday that online sales increased 45% in the 12 months to August, driven by 4 billion visits to its website. Outdoor furniture was the retailer’s fastest growing category, with office furniture sales also performing very well, a spokesperson told CNN Business.

The company started selling online in three new markets, including China. Overall sales dropped 4% to € 39.6 billion ($ 46.7 billion), with many of its stores forced to close during lockdowns for several weeks.
Online sales remain high, even with stores reopening, he added. But the Swedish furniture retailer plans to continue opening physical stores despite early evidence that consumers may not return to their old shopping habits.
UK supermarket chain Tesco (TSCDF) said it is creating thousands of new jobs to meet growing demand in its online business, while a research paper from McKinsey earlier this year said lessons from China suggest three to six percentage points of the online market share will be “sticky”
Sales of home goods held up better than other categories during the pandemic, isolating retailers like Ikea and Big lots (GREAT) from the economic pain that has led to widespread job losses and bankruptcies elsewhere. IKEA added 6,000 employees to its global workforce, bringing the total to 217,000.

Life at home has become “more important than ever for people … which has led to the repurposing of the home in many ways,” the Ingka Group, which operates 374 Ikea stores, said in a statement.

U.S. home improvement sales increased more than a quarter in the three months to August from a year earlier, according to market research firm NPD Group.

Families “have transformed kitchens into schools, bedrooms into workplaces and courtyards into amusement parks,” Ikea added, describing 2020 as “a homecoming year”.

Despite the pandemic and the spike in online sales, Ikea opened 33 new stores during the period, including Moscow, Seoul, Shanghai and Macau, and plans to expand into new markets such as Mexico and the Philippines.

Inter Ikea Group CEO Jon Abrahamsson Ring said customers still want to “touch and try” his products. “We are delighted with the growth in online sales, but also very happy that customers still love our stores,” said Ring, noting that 825 million shoppers visited its stores during the period.

The company said it will continue to take a “total market approach”, offering smaller showrooms in city centers, traditional suburban Ikea stores and online distribution centers.

Ingka Group said it continues to invest in real estate, such as the Kings Mall in London and the famous Rue de Rivoli in Paris. The franchisee’s online sales increased 60%, accounting for nearly a fifth of total sales, up from 11% in 2019.

– Nathaniel Meyersohn contributed to the reports.

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