How IKEA Grew Sales in a Challenging Home Goods Market
The home goods industry has faced significant challenges over the past few years, and the trend continues into 2023. Total home goods GMV declined 9% in 1Q23 compared to the same period last year. This is a continuation of the negative growth trend seen in 2022, where every quarter posted negative YoY sales growth ranging between -8% to -5%.
Monthly GMV & YoY Growth, Top 30 Home Goods Pure Players
United States | Online + Offline Sales | January 2022 - March 2023
Despite the challenges faced by the industry, and amidst the fall of retail giant Bed Bath & Beyond (Forbes), IKEA has shown category dominance. IKEA has managed to maintain positive sales growth in 1Q23, with sales increasing by 9% YoY. In fact, IKEA's sales growth has been improving steadily since 2022, climbing 21pp over the course of the year from -11% sales in 1Q22 to 10% in 4Q22.
Monthly GMV & YoY Growth, IKEA
United States | Online + Offline Sales | 1Q 2021 - 1Q 2023
So, what’s driving IKEA’s growth? YipitData Solutions Analyst, Chelsey Birgisdóttir, noted that “using transaction data, we saw that IKEA shoppers were spending more money per shopping trip compared to previous years. The increase in IKEA AOV outpaced AOV growth for the overall home goods market.”
In fact, the average order value (AOV) among IKEA shoppers has grown faster than AOV for the home goods industry overall for the past 13 months. In 2022, IKEA's AOV increased by as much as 22% YoY, whereas industry AOV grew only 3% YoY in the same month. IKEA's AOV growth continues to exceed the home goods industry in 1Q23.
AOV Growth, IKEA vs Home Goods Market
United States | Online + Offline Sales | January 2022 - March 2023
On the same day YipitData’s 1Q23 Home Goods Market Share Index was published, IKEA announced a $2.2 billion investment to expand US retail sales. This includes the opening of eight new stores (primarily in the South), nine Plan & order points (focused on metro areas) and 900 new Pick-up locations.
Sources: Transaction Data
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