Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nasdaq  >  Amazon.com    AMZN

AMAZON.COM

(AMZN)
My previous session
Most popular
  Report  
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

IKEA accelerates services drive as competition stiffens

share with twitter share with LinkedIn share with facebook
share via e-mail
0
02/11/2019 | 05:23pm EST
Drame, an employee at odd-jobs platform Task Rabbit, assembles IKEA furniture at the apartment of customer Jessica Resnik in Washington Heights

STOCKHOLM/NEW YORK (Reuters) - Jessica Reznik likes IKEA's prices but not do-it-yourself. So when the Swedish furniture giant said a handyman on odd-jobs site TaskRabbit could assemble her new dresser and nightstand in her New York apartment, she jumped at the offer.

Reznik, a 24-year-old teacher, is just the kind of busy millennial IKEA hoped it would attract when it bought TaskRabbit in September 2017 as part of a drive to offer a range of services complementing its trademark flat-pack furniture.

The world's biggest furniture retailer's focus on services is a major strategic shift it has been forced to adopt as waves of new competitors in an increasingly online world erode its dominance.

It seems to be working. In the first readout on TaskRabbit's activity since IKEA bought it, executives told Reuters the number of jobs done by TaskRabbit handymen had more than doubled and 10 percent of the tasks were furniture assembly, up from 2 percent previously.

Jesper Brodin, chief executive of Ingka Group, which owns most IKEA stores, said TaskRabbit was expanding into interior design and looking at services such as furniture repair to give IKEA an edge, while TaskRabbit's customer data could help IKEA come up with new ideas for furniture.

"As this community grows, it's not only about fixing one or two things but actually to add professionalism in interior decoration, into 'life at home' practicalities," Brodin said at TaskRabbit's San Francisco headquarters.

"TaskRabbit is a super interesting business case because it is scalable, not only geographically but also into services at home," he said.

Using TaskRabbit to bundle same-day delivery and assembly for IKEA is another service being rolled out, TaskRabbit Chief Executive Stacy Brown-Philpot said.

AFTER-MARKET BATTLE

Winning the battle for online shoppers is crucial for IKEA. While online furniture retailing was relatively slow to take off, the market is now flooded and the battle is increasingly in after-market services.

The United States is IKEA's second-biggest market behind Germany, with 14 percent of its sales.

GlobalData Retail analyst Neil Saunders put the overall U.S. home furnishing market at $282 billion in 2017. But he said IKEA's share was 2 percent, down from 2.2 percent in 2014 and well below Germany, where it has as 12 percent share.

Pure online furniture retailers such as Germany's Home24, Britain's MADE and Wayfair in the United States have been growing rapidly. Online generalists such as Amazon are pushing furniture while some hypermarkets are also branching out into home furnishings.

Walmart and Wayfair have also started offering inexpensive assembly services in the United States through TaskRabbit rival Handy.

On Monday, home furnishings retailer Crate and Barrel announced a partnership with Handy, offering furniture assembly and home decor installation across the United States.

"Anyone who sells furniture will have a delivery service," Kantar Retail analyst Ray Gaul said. "The difference will be that instead of having just a delivery service, IKEA are trying to give some assistance in designing your space, and that's where TaskRabbit can be helpful."

IKEA, which had global sales of 39 billion euros (34 billion pounds) last year, made its name selling inexpensive furniture mainly to people willing to travel to its vast stores, lug their merchandise home and assemble it themselves.

More shoppers now prefer the convenience of buying big-ticket items online and getting products delivered, assembled and installed. In Reznik's case, she paid $81 to have her furniture built, with TaskRabbit taking a 15 percent cut.

Since IKEA's acquisition, the first in its 76-year history, TaskRabbit has expanded to all 48 U.S. cities with IKEA stores, up from 41. In Britain, it has moved beyond London to 11 more cities and it launched in Toronto, Canada, in September.

FEEDBACK LOOP

Since it was founded in 2008, TaskRabbit says its vetted "taskers" have assembled 545,000 pieces of furniture, moved over 340,000 households and mounted more than 190,000 TVs - though it did not give a breakdown for before and after the IKEA deal.

"We are convinced this is a way to access new customers in our cities," said Brodin, who aims to take TaskRabbit to more countries. "The convenience customer today has so many more choices, and they are used to getting a quick answer."

But having TaskRabbit freelancers associated with the IKEA brand also brings risks, even though they are vetted.

"You don't know if they are a good person or not. And, like it or not, it's associated with your brand. So if they steal something, or worse, it's back on IKEA," Kantar's Gaul said.

Brown-Philpot attributes much of TaskRabbit's growth since the deal to links on IKEA's website.

"Once we closed the acquisition, yes, the branding happened: there was co-branding in the store, there's opportunity for people to see TaskRabbit in the catalogue, we've been on a couple of commercials," she said. "But what's really happened is the seamlessness, the integration."

Besides TaskRabbit, IKEA is rolling out accessible inner-city stores with staff on hand to advise on planning, as well as apps and digital tools to help customers tailor living spaces.

IKEA has offered assembly across its markets for more than four years, mostly through service partners. It has also entered partnerships with Airtasker in Australia and UrbanClap in India.

But TaskRabbit is the only platform it has bought, and executives say that brings IKEA another benefit: it has access to TaskRabbit's customer data.

"The knowledge of the taskers and their interaction will be some sort of asset for us in the future for feedback for product development," said Brodin. "That was not part of the strategy, but that's something we are going to explore."

(Reporting by Anna Ringstrom in Stockholm, Melissa Fares in New York and Heather Somerville in San Francisco; editing by David Clarke and Dan Grebler)

By Anna Ringstrom and Melissa Fares

Stocks mentioned in the article
ChangeLast1st jan.
AMAZON.COM -0.91% 1607.95 Delayed Quote.8.03%
HOME24 SE -1.00% 8.049 Delayed Quote.-27.89%
WAL-MART STORES 1.49% 99.99 Delayed Quote.5.76%
WAYFAIR INC 1.69% 122.11 Delayed Quote.35.56%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on AMAZON.COM
02/15AMAZON COM : New York Project Foundered on Labor Organizing, Opposition to Subsi..
DJ
02/15AMAZON COM : invites Ocasio-Cortez for tour, calls worker claims untrue
RE
02/15AMAZON COM : What New Yorkers Didn't Sell to Amazon
DJ
02/15AMAZON COM : Pivot Raises Scrutiny of Incentive Deals
DJ
02/15AMAZON COM : Invests in Electric-Car Maker Rivian
DJ
02/15JEFF BEZOS : Bezos Is Latest Celebrity to Experience National Enquirer's Bare-Kn..
DJ
02/15TODAY'S LOGISTICS REPORT : XPO's Acquisition Shift; Amazon Drops Big Apple; Avia..
DJ
02/15AMAZON COM : Rivian Says Amazon Led $700 Million Equity Investment Round
DJ
02/15AMAZON COM : Second Spectrum and L.A. Clippers Select AWS as Official Cloud and ..
BU
02/15WSJ TAX GUIDE 2019 : What Investors Need to Know -2-
DJ
More news
Financials ($)
Sales 2019 275 B
EBIT 2019 17 613 M
Net income 2019 13 940 M
Finance 2019 35 040 M
Yield 2019 -
P/E ratio 2019 59,35
P/E ratio 2020 41,24
EV / Sales 2019 2,74x
EV / Sales 2020 2,25x
Capitalization 790 B
Chart AMAZON.COM
Duration : Period :
Amazon.com Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends AMAZON.COM
Short TermMid-TermLong Term
TrendsBearishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 47
Average target price 2 048 $
Spread / Average Target 27%
EPS Revisions
Managers
NameTitle
Jeffrey P. Bezos Chairman, President & Chief Executive Officer
Brian T. Olsavsky Chief Financial Officer & Senior Vice President
Patricia Q. Stonesifer Independent Director
Tom A. Alberg Independent Director
Thomas O. Ryder Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
AMAZON.COM8.03%789 830
WAYFAIR INC33.30%10 848
QURATE RETAIL INC12.30%9 853
ETSY INC13.64%6 512
B2W COMPANHIA DIGITAL12.92%5 840
MONOTARO CO.,LTD.-10.42%5 522