Ikea looks to brick-and-mortar to accelerate growth

Ikea, the world's largest furniture retailer has an aggressive plan in place to grow its brick-and-mortar business over the next few years, one that goes against the grain in the current digital-driven marketplace.

Ikea reported a 3.2 percent revenue increase to $38.9 billion in fiscal 2013, and although the company has seen increases in its online business, the majority of furniture sales still happen from the showroom floor. When customers want to purchase home furnishings, it helps if they are able to see how much space the item will take up when assembled or feel how comfy a chair is before they actually purchase it.

"We see that Internet and e-commerce is growing, but at the same time, when buying a new bed a lot of people want to try it first, and if you buy a sofa you may want to touch the fabric," Ikea's CEO Peter Agnefjäll told The Wall Street Journal.

The need to see, touch and feel is something that Agnefjäll says sets Ikea customers apart from those who desire to shop online at other mega retailers, such as Amazon and Walmart. Ikea doesn't report how much revenue comes from online sales vs. physical stores or catalogs, but in keeping customers first, the brand plans to pour its resources into building more stores and its trademark showrooms. In fiscal 2014, it plans to spend $3.2 billion on stores, factories and shopping centers, up from a $2.5 billion investment in 2013.

For more:
-See this Wall Street Journal article

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