The Future Challenges Of IKEA

1505 Words7 Pages
In addition, the weak Ruble led to panic buys in Russia. IKEA attempted to slow this by increasing prices but this failed to offset the rapidly depreciating Ruble. In addition to raising prices, the website was shut down to stem the flow of customers (HIRST, Tomas, 2014). The depreciating Ruble made it unprofitable to continue selling resulting in losses as IKEA failed to benefit from Christmas shopping and loss on each sold product before the prices were raised.

Future Challenges
IKEA has slept through the shift to online sales and has only slowly started to adapt to the opportunities of the internet. While competitors such as Williams-Sonoma Inc. in the USA record online making up 51% of their sales in 2014 (RENFROW, Jacqueline, 2014), IKEA only records only a 2% of its sales being done online in the same time period (CORTIZO, José Carlos, 2014). IKEA’s website had a record 1.5 billion visits but compared to the 716 million physical visitors, this number decreases in importance it is only a ratio of 2.1 – 1 (IKEA GROUP, 2014). In addition, visits to its mobile app across all platforms amounted to only 46 million.

Expanding ecommerce will thus be a challenge but IKEA is expecting growth rates of over 176%
…show more content…
The marketing strategy also had its problems (CHU, Valerie). IKEA started opening stores in China in 1998, which was a fast growing economy back then. It led to a couple of problems. One of the main problems was that the prices, considered low in Europe, were far above average in China. Keeping IKEA’s global branding promise, that everyone should be able to buy its products, in mind, the high prices created confusion among the Chinese consumers. Therefore, IKEA had to change its strategy. It started targeting the young middle-class population. By presenting itself as an aspirational European brand, IKEA chose to target a particular group instead of the whole

More about The Future Challenges Of IKEA

Get Access