Ikea is set to invest 3 billion euros in its stores around the world with the aim of developing the e-commerce side of the business as well as distribution and delivery.
Sales of Ikea products have exploded during the pandemic, and the Swedish furniture giant aims to invest more in its online presence and distribution centers.
Where will the investment go?
Reuters reports that the investment will go into new and existing Ikea stores and much of it will be used to modify the out-of-town outlets the chain is well known for, making them more suitable for distribution centers in e-commerce.
Shipping online purchases from out-of-town store warehouses will mean faster and cheaper deliveries, with fewer emissions, than shipping from a few logistics hubs, Tolga told Reuters. Oncu, a retail manager.
“Instead of creating central warehouse capabilities for online shopping, why not ship it from our IKEA stores?”
Automation will also play a key role in Ikea’s plans for its distribution and logistics centers.
What was said?
Ikea has spent the past few years aligning its business with the rise of internet shopping by expanding smaller stores, revamping its website and rolling out a new app as well as digital services such as remote scheduling tools.
“We believe we have some catching up to do on the back end of our operations (and) we have realized that by including stores in our last mile design and execution network, we can create a win-win situation. -winner,” Oncu said.
Ikea’s global ambitions go against the tide of global trade which has become increasingly cautious since the start of the war between Ukraine and Russia, but Ikea, which is a private company, believes the time has come.
“I agree that the outlook (for overall consumer spending) looks a little gloomy. This means that the value for money and time, affordable solutions that are of good quality, functional and designed and durable will increase demand,” he said.
Ikea in Ireland
By the end of August 2021, there were over 450 Ikeas worldwide, with five stores in Ireland, a mix of their traditional big box stores and smaller stores dedicated to kitchen, bedroom and living room planning.
The first Ikea in Ireland opened in 2007 in Belfast, followed by Dublin thereafter.