Why did IKEA end its pilot on Amazon?
IKEA recently decided to end a pilot in which the retailer tested the strategy of selling on Amazon.com’s U.S. site, although it apparently isn’t giving up on marketplaces — those operated by others or on its own.
The Swedish flat-pack furniture giant said in a statement, “We are curious and keen on exploring new areas to get new insights on how to reach and serve more people. IKEA worked on a pilot project with Amazon in the U.S. for Smart Lighting in 2018. The project was a trial, and after it ended, it did not go live. We will continue to dialogue with different partners to test new ways to meet our customers now and in the future, whenever and wherever they want.”
IKEA has made a range of smaller products available on Amazon.com since 2018 to capitalize on the platform’s quick delivery.
The move to end the pilot drew attention because of Nike’s announcement in November that it would stop selling directly on Amazon’s platform. Amazon has been called out for its alleged failure to control counterfeit sales, for its pricing changes and what some see as an inferior product presentation. IKEA product may still be available at Amazon from third-party sellers.
IKEA didn’t provide further details, but it may be looking to increase its emphasis on selling directly online. Reports say the retailer remains open to working with third-party marketplaces.
A Financial Times article from February 2019 further indicated IKEA was exploring developing its own marketplace that would invite rival brands to sell alongside its own.
Brooklinen, the Brooklyn-based direct-to-consumer bedding start-up, in a similar move last year launched an online marketplace featuring “a highly curated assortment of home goods from like-minded partner brands.”
Torbjorn Loof, CEO at brand owner Inter IKEA, told the Financial Times that the company is seeking online options beyond the major platforms and its own website. “You like to control your own destiny so in that sense if you have the size and the possibility that’s true [that Ikea would like to create it],” said Mr. Loof. “I think in the next five, 10 years, we will see what we now call the platform developing.”
- Ikea exits Amazon platform – Furniture Today
- Is IKEA really going to start selling on Amazon’s Marketplace? – RetailWire
- More brands are leaving Amazon, but the strategy could backfire – CNBC
- Ikea looks to launch sales platform that would include rival products – Financial Times
DISCUSSION QUESTIONS: What do you take from the decision by IKEA to not sell its products on Amazon? Do you think it would be a good move for IKEA to open its own online marketplace with third-party sellers?