Our views on IKEA’s marketplace trial

  • IKEA bring forward 2018 marketplace strategy
  • “I leave unsaid on which [platforms], but we will test and pilot’’ – Inter IkeaGroup Chief Executive Torbjorn Loof
  • Brand just launched available on Amazon
  • Alibaba also in running for trial

 

‘’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.’’ – Torbjorn Loof, IKEA, June 2016

 

It took less than one week after Ikea announced it had ambition to range through marketplace platforms[1] for the globally recognised Swedish retailer to launch on Amazon. [2]

 

IKEA products have appeared for years on Amazon sold by savvy sellers who have simply leveraged Amazon as a trusted shopping destination.  At Amazon, I used to hear of sellers purchasing in demand items from IKEA at list price and still being able to sell the item loaded with commission and shipping for a tidy profit margin.

 

It is interesting that a brand with a site already receiving 2.1B annual visits[3] would explore a partnership with Amazon that enables consumers to shop their exclusive range without visiting their direct website. Rather than enable Amazon as the de facto starting point for shopping it would seem more logical to expand their affiliate and search presence to drive traffic direct to their online store.

 

At Pricesearcher we recognise that brands are entering the direct to consumer online channel. Sometimes this is built upon a proven marketplace platform, which is especially useful to establish a new brand. But, those with a familiar and trusted name are often looking at creating transactional branded sites where they can determine the customer experience and are looking for direct traffic.

 

For example, to complement their existing digital strategy, the likes of Superdry, Benefit, River Island and My Protein have joined hundreds of sites who receive organic traffic direct to their websites from product focussed search engine, Pricesearcher.com.

 

Amazon has been reducing its own reliance on traditional search (such as Google) whilst positioning itself as a landlord to hundreds of thousands of sellers reliant on its buying traffic. Online is still a growing opportunity but in the US Amazon accounts for 55% of every $ of growth in the US.[4]

 

IKEA might be worried about becoming reliant on Amazon online and if their growing dominance in product search will divert consumer from IKEA’s own online presence. Despite tapping into the engaged shopper base, they must be worried how Amazon’s free shipping model will wrestle with the challenges of large shipping fees typically associated with bulky items.

 

IKEA have 9,500 products in their catalogue[5], but at the time of writing, only a heavily curated range is available on Amazon.  As an unbiased and ad-free search engine for prices, we are disappointed this is a long way from presenting the consumers with a full view of the market. We’re passionate that the customer should be able to see full selection from  retailers, brands, marketplaces and price comparison sites regardless of any brand concerns, cost of acquisition or advertising spend.

 

‘’We have one great advantage and that is that we design, produce and distribute our own unique range” concluded Mr Loof.

 

Whether this advantage is diluted by pushing their brand through new channels and suppliers that do not lead back to their own site remains to be seen.

 

 

 

[1] http://www.huffingtonpost.com/entry/ikea-selling-amazon_us_593fea05e4b0e84514ee4634

[2] http://bgr.com/2017/06/14/amazon-ikea-desk-lamp-bags-everything-ahhhhhh/

[3] http://www.ikea.com/gb/en/this-is-ikea/about-the-ikea-group/key-figures/

[4] David Spitz – Channel Advisor Catalyst Presentation, May 2017

[5] http://www.ikea.com/gb/en/this-is-ikea/about-the-ikea-group/key-figures/

 

About Thomas J. Vosper

Head of Retail Operations at Pricesearcher - an unbiased search engine that is an ‘Always On, Always Free’ source of highly engaged shoppers that thousands of retailers are accessing for free and without development resource. After cutting my teeth at Amazon for over six years I moved to a more senior role leading blue chip engagements at Tesco’s marketplace. I then launched InPost UK’s first outbound retailer in summer 2016.

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