Ikea Explores E-commerce, The Smart Home and Sustainability in Australia

Strategy Briefing

About This Report

Sep 2018

Ikea has been present in Australia for over 40 years, however, the multinational homewares and home furnishings retailer is ramping up its local offering. Ikea Pty Ltd (“Ikea Australia”) is on track to open three new distribution centres by the end of 2018, which the retailer hopes will boost e-commerce sales. Also introduced in 2018 is Ikea Australia’s pilot take-back scheme, offering customers the opportunity to return unwanted furniture items.

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Ikea Explores E-commerce, The Smart Home and Sustainability in Australia

Key Findings

Housing affordability and the shift towards apartment living

Rising house prices in Australia results in fewer people being able to afford their own homes. Younger consumers are more likely to rent and live in apartments rather than houses. While houses are still the most popular dwelling type, detached houses are declining in popularity as semi-detached and townhouses become more prevalent.

Ikea’s new distribution centres to boost online sales

Ikea Australia has invested in three new distribution facilities in New South Wales, Victoria and Queensland. This investment, coupled with the expansion of Click & Collect points across the country, is expected to ramp up online ordering for the retailer within Australia over the next few years.

Australians slow to adopt high-speed packages from the NBN

The National Broadband Network is still under-utilised in Australia as many households remain unconnected, or if they are connected, have opted for slower internet packages. This is likely to change in the future as the NBN Co has reduced wholesale pricing on high-speed packages to entice consumers to upgrade.

Ikea’s smart lighting range to hit Australian stores in 2018

Ikea’s first foray into the smart home arena will be through its smart lighting range which is due to launch in late 2018 in Australia (already available in other markets). Customers will be able to control Ikea’s smart lighting products through voice using Amazon Alexa, Google Assistant or Apple HomeKit.

Take-back scheme one step towards a circular economy

Ikea Australia launched a pilot take-back scheme in 2018 aimed at reducing the number of furniture items sent to landfill. The pilot programme will run for six months and is part of the company’s wider sustainability strategy, which involves Ikea aiming to become 100% circular by 2030.

Introduction

Scope
Key findings

Snapshot: Australia

What does an Australian household typically look like?
Australia’s homewares and home furnishings 2017 snapshot
Catalyst for change in homewares and home furnishings

Ikea’s Store Footprint

Ikea strives to reach more customers through collection points
Ikea Australia launches three new distribution centres
Online sales: Ikea Australia’s e-commerce efforts ramp up
Ikea begins the transition from “blue-box” to customer touchpoints

Focus Areas: Ikea Australia

Australians opt for slower packages on the NBN due to pricing
High-speed internet to drive adoption of the smart home in Australia
Smart home: Ikea set to launch smart lighting in Australia during 2018
Circular living: Ikea launches pilot take-back scheme in Sydney
Sustainability: 2030 people and planet positive strategy launched in 2018

Key Takeaways

Australia: homewares and home furnishings key takeaways