Swedish furniture retailer Ikea admitted it jumped on the e-commerce bandwagon a bit late while announcing the results of the recenly completed fiscal year. The retailer, which operates 315 stores in 27 countries, posted a profit rise of 0.4 percent from the previous year to $3.76 billion, slower than the 3 percent the previous year and the 8 percent in 2012.
In the United States where Ikea operates 40 stores, sales grew 4.2 percent last year, down from 7 percent the previous year and 8 percent in 2012, reported The New York Times.
In October, Ikea did announce a push in its online offerings globally with a goal to reach $63.7 billion in sales by 2020.
Analysts believe the retailer has a lot of catching up to do with e-commerce. Online furniture sales are expected to grow to more than $14.2 billion by 2019, up from $10 billion last year, according to IBISWorld.
"They should have been on the internet years ago. They could have built up a sizable business by now," Peter Tourtellot, managing director at Anderson Bauman Tourtellot told The New York Times. "It was shortsightedness. They got wrapped up in their own success."
For many years, the retailer avoided e-commerce and deliveries, and instead focused on physical stores and an annual catalog.
Some competitors in the furniture industry, in the meantime, have built strong online presences. At the close of 2014, Williams-Sonoma (NYSE:WSM) announced that 51 percent of its sales are now made through e-commerce. Home Depot (NYSE:HD) increased its e-commerce revenues by almost 40 percent in the past year and Lowe's has grown its e-commerce revenues by almost 36 percent.
Ikea currently sells online in about half of the 27 countries where it operates, selling about 70 percent of its product offerings online. E-commerce sales went up 35 percent last year.
-See this New York Times article
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