Ikea to invest more than $3B in stores
Ingka Group, Ikea’s largest franchisee, on Monday announced it would invest more than 3 billion euros, or about $3.2 billion at press time, in its stores.
The investment will include both new and existing stores and will focus on making its physical locations double as e-commerce distribution points, according to a company press release emailed to Retail Dive.
The plan will cover all 32 of Ingka’s markets, including the U.S., France, Finland, Canada, Germany and Spain. About a third of the investment — 1.2 billion euros — will be allocated to its London market, including to its Oxford Street store, new services and a new distribution center in Dartford, which will allow the company to make home deliveries within 24 hours.
After e-commerce surged in popularity during the early days of the pandemic when consumers were trying to avoid trips to the store, Ikea is investing in its physical locations to make them more adaptable to online orders.
“Our stores remain one of our biggest strengths and we will continue to transform them to meet the needs of our customers for generations to come,” Tolga Öncü, retail operations manager at Ingka Group, said in a statement. “We see many of our stores playing a dual role, giving our customers the best of both physical and online retailing and the investment will support not only an inspiring in-store Ikea experience but also a faster and more affordable shipping of online orders directly from our stores.”
The investment is aimed at creating a more immersive experience and helping to support the increase in home deliveries, the company said, pointing to its recently rebuilt store in Kuopio, Finland, which now helps to fulfill online orders. Ingka said with that store’s improvements, customers can receive online orders in half the time and the company has reduced delivery costs by 40%.
Ingka Group over the past three years has invested more than 2.1 billion euros in new and existing stores across all of the markets it serves.
“More than ever before, we want to optimise our network of stores in order to cater for an inspiring shopping experience — no matter how or where our customers choose to engage with us,” Öncü said. “With this investment we aim to secure the long-term viability of our business by making Ikea more accessible, more affordable and more sustainable.”
The company also announced on Monday that the first city stores in Stockholm and Toronto will open soon, featuring more than 2,000 products in store, with larger furniture pieces available for home delivery.