[Narf]

My take on all this ...

- I'm not suprised to discontinue mail order. The economies of scale aren't there for larger items like furniture - not only would a lot be considered "oversized", but package handling by any of the common shippers rarely is with enough care to assure safe arrival.

- Larger markets can support the stores; rural markets maybe not so much. Ikea's philosophy is to sell volume to make up for the much smaller profit margins over other furniture stores. If they can't deliver enough volume (profits) to sustain the significant added expense of long distance transportation, then why bother?

- To many, Ikea furniture is often looked upon as cheap products, which I've addressed previously. Such is a reason why they may find themselves hard to move upmarket and sell more expensive products, like the Stockholm series.

- I don't think they're suffering by being in the appliance market ... their lineup is reasonably featured and priced competively. They're not aiming to be top sellers ... just to be sufficient to help support kitchen sales. The same goes with sinks, faucets, and countertops ... one can get all this elsewhere too, but OTOH , there are people who appreciate the one-stop-shopping convenience also.

(Adding to this ...)

- The reason for the larger stores is because it showcases a large variety in which the products can work in, from traditional to modern to wild. The plain brown cardboard boxes certainly don't sell the products ... the showroom settings do. My guess is that 120,000 sq.ft. is absolute the bare minimum ... 200,000 sq.ft. is more like it.

- They do need to emphasize the Ikea philosophy a bit more. Don't hide the "reasons to a low price" to a sign around the back side of the restaurant bathrooms or similarly obscure place! Put them in prominent places, that allows the consumer to moreso understand why everything has to be assembled themselves. Additional, emphasize the ecological aspects, like managed forestry and how particle board is really recycled materials.

- Allow for even more recycling ... they already have bins for batteries, bags, cardboard, CFL's, and paper ... how about a way for folks to recycle metal and old wooden pieces too?

(More morning comments ...)

- I don't think mail order furniture has ever been a strong poit ... sales supplement, yes, but not for being a profit engine. Then there was the old furniture.com in the dotcom heyday, which charged a $50 flat rate to ship any item ... yep, that sure made business sense when someone in BFE wanted an armoire and a big sectional sofa, right?!

- It all goes back to materials handling ... folks are going to expect the same prices (or lower) online versus in-store and reasonable shipping charges. Even on many smaller items like cookware, the packaging is non-existant, meaning that to mail them, it means packing it in new boxes + padding to ship. These items cost money and time ... and it's a cost that's not so easy to pass onto customers who expect one to be value oriented.

- Be more prominent in returns to allow items to be returned assembled ... there's no poit to insist that customers return furniture in the unassembled state, because they're not going to care when disassembling them AND recovery has to reassemble them (or discount as boards) anyways because the packaging is all torn up now and unable to be resold in-box. This would also solve those issues in which the customer cannot figure the assembly and a quick tip could've saved the sale.

[kelly]

I sincerely doubt that Home Shopping wasn't profitable- it's more likely that it wasn't profitable enough. Large corporations have to make tough choices about where to concentrate their collective energy- focusing on their core competencies. I think IKEA dabbled in online commerce knowing that they would make money, but never truly committing resources or thought leadership on how to integrate it with the rest of their business because key players weren't behind it philosophically. IKEA has a flat org structure that defers to the local in the stores- but Home Shopping was a Home Office controlled program. And I think they always felt it undermined the store and didn't serve the range.

The issue with the appliances is not that it's a bad idea, but prominently badging them IKEA when NA consumers don't perceive IKEA as upscale is a very bad idea. We're on the same page- appliances are vital to IKEA. Sabotaging the introduction of appliances with a complete misjudging of their own brand's value proposition in NA is a big gaffe. They need to address- through marketing-the overall move to upscale (if they even think they need to do it). Stockholm was an attempt to differentiate a segment of the range, the initial success of which was debateable. But that segmentation work was clearly not done at the time of the initial badging of appliances. Notice the introduction of the professional range to capture the part of the market using IKEA cabinets as an offset to expensive appliances. That indicates an appliance evolution.

The economics of the big store model is apparent- efficient distribution of product and the ability, as you point out, to effectively display their range. But IKEA is clearly deciding that they will restrict supply by cutting off access via Home Shopping and not figuring out the economics of aggressive store openings- of whatever size. Certainly, it's a lot slower to only expand via 40,000 square foot stores.

Whether they sell the stuff online or not, it's imperitive that they solve their online experience. NA consumers (now I am really preaching to the choir with this group) make their decisions utlizing referrals, internet research, and where it's convenient, a bricks and morter buying experience. IKEA has at least one component missing everywhere, and in some markets two.

[DesignDiva]

Well, without further confirmation from someone official at IKEA, I think this can be filed in the realm of speculation at best.

[minorbob]

To be quite honest, if IKEA online shopping closed down here in the UK , I would be delighted. I have never dealt with a less-helpful organisation in my life. I am usually a calm person, but dealing with the incompetence and the couldn't-care-less attitude of IKEA online filled me with a rage I have never known before.

IKEA physical locations are OK - IKEA on the telephone made me want to hit someone.

[woodswell]

Susan,
Any update on this - is it just rumor or is there truth to it?

Frankly as a long-distance IKEA fan who has never even visited a store,I do have a problem, with how IKEA's ordering works. I did have a good experience with IKEA Direct , though the shipping situation for my town is not good - deliveries only on Saturdays, erratic service depending on which driver got the low bid, etc.

I don't mind IKEA wanting to concentrate on the in-store experience, but they need to realize that the USA is far larger than Europe so a huge percentage of their potential market is not within an hour's drive of an IKEA.

What I would like to see is a better method for ordering long-distance with pickup from a store. If I could have completed my order with the Atlanta IKEA we would have made a special trip to that store and spent more money in the store when we were there to pick up our order. As it is, I became hugely frustrated, almost enough to give up on IKEA (though I am glad I did not) and am reluctant to attempt another order through any IKEA store.

I need some more doors and other odds and ends, some of which are not carried in the store and will have to be ordered for later delivery. I will be near an IKEA in two weeks, but I am still weighing if it is worth it to go through the hassle and potential frustration again or if I will just order what I need through IKEA Direct and forgo my first visit to an IKEA. I suspect that even if I can get my order through, there will be no guarantee that the items that must be ordered in will not be waiting for me in which case I will be back in the IKEA h311 of waiting for promised home delivery which never happened or was incorrect when it did.

( DH tried to get some of my missing doors when he was in Atlanta in September. I still have not received over $150 worth of cabinets and doors that were promised to be sent later. I've given up - the last time I called IKEA Atlanta I was on hold for 23 minutes then told I'd have to bring the receipt into the store to get store credit for the missing items. )

IKEA should look at a model such as Sam's Clubs - a big box, low service place that allows ordering online for pickup at the stores or for delivery, depending on the items. I've seen pallet loads of items packaged waiting for pickup at our local Sam's Club, all stuff that Sam's let their customers order by themselves online with little cost to the store.

Feel free to share my thoughts with your contacts at IKEA. You can also tell them that I have spent over $14,000 with IKEA on cabinets for our entire house. But I cannot recommend IKEA to anyone here since IMO the problems with long distance ordering far outweigh the value and quality of the IKEA cabinets. And my house is low budget compared to most that my contractor builds - a positive experience on my part might have brought IKEA tens of thousands of dollars worth of additional orders from the contractor.

[IKEA.Employee]

Update: Went to work & couldn't wait for this meeting. The Steering Group (business managers of the call center) were in a meeting together. I know they were talking about the situation. They never arranged for a meeting with everybody like they promised. Communication really sucks @ IKEA Direct ! That's why it seems most advisors can't seem to get the correct return policy to customers. There is actually a rumor going around the call center, saying that Anders has until the 3rd week in January to make a decision to close the entire call center, not just the Home Shopping portion. I have a feeling we will hear something later in the week. I

[Jason_MI]

I guess I'm not suprised, or even upset by this decision. My reason is that the business model that places such as Walmart and other stores that have large online and brick-and-mortar presences have relied on low fuel prices as part of their strategy. I have a tendency to think that's going to be a real hinerance in the future, rather than a benefit, because oil prices are trending up, and few see them pulling back to what they were.

I'd prefer to see Ikea spend their energy, and make their value propositions, through the stores, rather than chasing ever lower quality to match increasing shipping costs just to 'be in the game'.

[DesignDiva]

**DISCLAIMER**

I would like to point out that there is no indication other than the OP 's post, that this is actually a decision made by IKEA. This has not been confirmed and we have not heard from IKEA Corporate that any of this has any basis in fact.

[IKEA.Employee]

Well, if I had a scanner, I'd post a copy of the memo. Call the call center & ask about it. They told us to say, "We have no comment." If anyboy from the media calls we have to appoint them to this lady named Mona, whos the Corporate PR. If u know anybody that works for IKEA, ask them to go on the Intranet at work & click on "Latest News." Big Copy of the Memo!!!

[deagna]

My husband and I were planning on using IKEA Direct in April to get our kitchen. We live 8 hours away from Chicago, Minneapolis and Dallas which are our closest IKEAS. Is this going to affect us?