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IKEA’s Biggest Franchisor Plans to Invest More Than $3 Billion in Omnichannel Store Push

Ingka Group, which operates 392 IKEA stores across 32 markets, will invest more than €3 billion ($3.16 billion) into opening new locations and revamping existing stores by the end of 2023. The retailer is aiming to make itself accessible for customers whenever and wherever they want to interact with IKEA by expanding the availability of omnichannel services.

The investments will create a more immersive IKEA experience and support growing demand for home deliveries. For instance, the retailer recently rebuilt a location in Kuopio, Finland to handle online orders from across the country. As a result, customers can now get their orders in half the time and with 40% reduced cost of delivery for pickup parcels.

Expansion plans include the first IKEA stores in Stockholm and Toronto, which were specially designed to operate in busy downtown locations. Each shop has more than 2,000 products for immediate takeaway and larger furniture items available for home delivery. Additional expansion plans for Canada include opening a new distribution center in Quebec and a planning studio in Montreal.

Ingka Group also is investing nearly €1.2 billion in London alone, including launching a new store, offering new services and opening a distribution center that will enable home deliveries within 24 hours across the city. A new city-focused store is planned for Madrid, where it will complement three traditional stores and the two existing city stores.

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“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,” said Tolga Öncü, Retail Operations Manager at Ingka Group 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 faster and more affordable shipping of online orders directly from our stores.”

IKEA also has been experimenting with even smaller stores in the U.S., dubbed studios. Two locations are slated to open in California in spring 2022, with an emphasis on design services for more complex rooms in the house such as kitchens, bedrooms and bathrooms. The concept stores don’t carry any inventory, but instead let shoppers book appointments with design specialists to have their choices delivered to their home or another convenient location.

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