IKEA Advances With $2.2B Plan to Modernise Retail Experience!

The world's largest furniture retailer is looking to the North American market for expansion in the wake of the Russian invasion in Ukraine.

Wed 04 Oct 23


IKEA will start rolling out the IKEA Plan & order points across the United States later this year.

In April, the world’s largest furniture retailer announced plans to invest US $2.2 billion over the next three years, including constructing eight new stores, nine “plan and order points”, and 900 pick-up locations.

After disappointing investments in Russia, IKEA is investing heavily in the North American market, where the company sold all stores and factories following the Russian invasion of Ukraine.

In January, Wood Central reported that IKEA used 20 million cubic meters of wood in its products, packaging, and communication materials in the 12 months leading up to the war.

“We have managed to replace those volumes in other countries on a scorching wood market,” Ulf Johansson, IKEA’s Global Wood Supply and Forestry Manager, said at the time.

Before the war, Russia and Belarus were the fifth and sixth largest suppliers of sawn wood for IKEA, accounting for 6% of its supplies.

In response, IKEA increased wood supply from Sweden, the Baltics, Poland, and Germany with short-term and long-term solutions. 

The new investment, which will modernise the company’s eCommerce capabilities, is part of a move to grow its online business to compete with Amazon. It could see IKEA roll out the changes to its global network of factories and stores.

“We know US customers have a strong desire for more ways to shop and experience IKEA, and this growth plan will allow us to meet that need,” according to Javier Quiñones, the CEO of IKEA USA.

“Our priority is to become more accessible while staying as affordable as possible for the many people, which is especially important given the increasing living costs.”

IKEA’s largest store is based in downtown Burbank, California. The huge 456,000 sq.-ft. store is 3 stories with over 50 room settings, making it twice the size of the old Burbank Idea just a few streets over. It now sits on 22 acres and has its own street named after it – Ikea Way and features a 600-seat restaurant. It was retrofitted in 2017. (Photo Credit: Supplied)

On Friday, IKEA USA announced plans to open an IKEA Plan & order point with Pick-Up in Annapolis following investments in Arlington, Fairfax and Gaithersburg and the construction of large-format IKEA stores in Woodbridge and College Park.

This new customer meeting point will offer home furnishing inspiration and personalised interior design planning. It will also include an IKEA Pick-Up point, allowing customers to pick up their purchases made online or purchased at the Plan & order point location.

“We could not be more thrilled to open a new location this year and bring the IKEA experience closer to our customers across the bay in the eastern part of the state,” Tony Giacona, the Marketing Manager for IKEA USA, said.

“While the IKEA Annapolis Plan & order point with Pick-up is different from our traditional IKEA stores, we hope it better meets the needs of our local customers and provides an IKEA experience that’s more accessible, affordable, and sustainable.”

“With the addition of the IKEA Annapolis Plan & order point with Pick-up, we are adding four new IKEA locations,” Mr Quiñones said.

“Whether you want to meet with an IKEA design specialist to transform your space or are simply looking for home furnishing inspiration, the IKEA Annapolis Plan & order point with Pick-up is a more accessible store format and meets our customers where they are and how they like to shop.”

In June, IKEA acquired software provider Made4net to boost its e-commerce capabilities in the US. By integrating Made4net’s fulfilment operations system, Ingka Group, the largest IKEA retailer, said, “It will improve its stores’ omnichannel experience for customers and co-workers.”

The company aims to become a leader in the rapidly evolving e-commerce landscape and meet the growing demand for efficient warehouse and fulfilment solutions within the retail sector.

In addition to opening new Plans & order points, and Pick-up locations in city centres, IKEA USA has made significant investments to enhance its e-commerce experience and service offerings.

For example, this includes its first-ever Buy Now, Pay Later program in partnership with Afterpay, new IKEA Family benefits, IKEA Business Network loyalty program, lower-priced shipping and delivery, Click & collect, and TaskRabbit assembly services.

IKEA made the commitment to achieve net zero by 2030 as part of COP 26. Footage courtesy of @IKEA.

The new store strategy comes as Ikea works toward becoming climate-positive by 2030. The retailer said it will increase solar and geothermal technology in locations when possible, transition to electric vehicle trucks and reduce waste. 

Earlier this year, the company launched its As-is online service, which allows Ikea Family members to reserve gently used products online to pick up in stores.

Last May, the Ingka Group announced a separate investment of more than 3 billion euros — or about $3.2 billion — in new and existing physical stores. 

The Plan would cover Ingka’s markets, including the U.S., France, Finland, Canada, Germany and Spain.

Ikea’s investment in the US may also pose a risk to other Home furnishing retailers in the market, according to GlobalData Managing Director Neil Saunders.

“As the largest furniture retailer in the world, Ikea has economies of scale and volumes that allow it to offer value that few others can match. The expansion is a potential threat to Wayfair, At Home and other mass market players,” Saunders said in emailed comments.


  • Wood Central

    Wood Central is Australia’s first and only dedicated platform covering wood-based media across all digital platforms. Our vision is to develop an integrated platform for media, events, education, and products that connect, inform, and inspire the people and organisations who work in and promote forestry, timber, and fibre.


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