- Ikea is spending over $3 billion to turn stores into delivery hubs.
- The chain is also planning more stores inside major cities.
- Ikea's online sales grew over 73% during 2021 as e-commerce exploded.
Ikea will spend $3 billion to open new downtown locations in cities across North America and Europe and retrofit existing stores to fulfill online orders
The furniture retailer is best known for massive stores in suburbs and outside cities, where customers can find products to outfit an entire house. Now, Ikea is adapting to the changing retail landscape, the chain said in a press release.
Ikea will focus on opening new stores and revamping existing ones to give customers a more immersive experience and to meet home-delivery demand, said owner and operator Ingka Group.
In the coming months, openings are planned for Nice, France, and for "bustling downtown locations" in Stockholm and Toronto, where customers can purchase smaller items and order larger furniture for delivery.
"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," Tolga Öncü, retail operations manager at Ingka Group, said in a statement.
This is a continuation of Ikea's ongoing experiment with alternative store formats. In March, Insider visited one of the chain's new micro stores in London and found a location that was designed to be more convenient and attractive for urban customers. It was about a quarter of the size of a typical Ikea, and the chain says it has plans to open at least 50 others like it.
Ikea invested over $1.2 billion into the London market, which includes the micro store and creating a new distribution center. It says 30% to 40% of existing stores will be modified to facilitate online orders.
Ikea's online sales increased 73% in 2021, and the chain says more-efficient online orders can help grow the e-commerce business even further, with customers in major cities like London receiving online orders in as little as 24 hours.
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