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IKEA to focus on digitisation and convenience shopping

Swedish furniture brand IKEA will be cutting jobs and focusing on smaller stores and its digital pipeline in a bid to usher in a new era of business transformation

IKEA has announced it will be focusing on convenience and digital as part of its next step towards business transformation.

The Swedish home furnishings giant announced it will be “assessing all parts of the organisation” to find where simplifying its business will make the most benefit to customers.

Alhough the firm said this will lead to 11,500 new jobs being created globally over the next few years, it added that around 7,500 jobs will become redundant in the process.

Jesper Brodin, CEO of parent company Ingka Group, said the business needed to meet changing customer behaviours in “better and new ways”.

“We continue to grow and perform strongly. At the same time, we recognise that the retail landscape is transforming at a scale and pace we’ve never seen before,” he said. “We will put greater emphasis on making our existing stores even better and taking the opportunity to renew and reinvent our business in a way that is inspired by our history, culture and values.”

As the world becomes increasingly more digital, the way customers are shopping is changing, pushing retailers to cater to online consumers.

IKEA hopes to create roles through opening new IKEA stores, but also through investment in fulfilment and digital to address online demand, much of which has been happening in the UK over the past year – the firm opened two customer delivery centres and a parcel unit in London.

In the UK in particular, the firm claimed to be looking into creating a more convenient experience, as customers become more demanding due to the speed of online delivery.

Part of this is through opening new stores, and the firm said that the opening of a Greenwich location will add 500 new roles in the UK. However, it also said 350 jobs across the UK and Ireland are likely to be scrapped over the next two years as the firm pushes forward with its transformation.

Javier Quinones, IKEA UK and Ireland country retail manager, pointed the finger at the “fast-changing retail environment” for the need to take a different approach to retail.

“While the opportunities ahead of us are exciting, we know that some of the changes won’t always be easy, and in some cases we will have to make difficult decisions,” he said.

Putting doom and gloom aside, the firm has begun plans in London to implement what it is calling its City Centre Approach aimed at targeting customers living in busy urban areas.

This began with the opening of a Planning Studio, a nod to experiential store shopping that focuses on giving customers personalised ideas for their home which they can order later, in London’s Tottenham Court Road.

Quinones said this was one of the steps the firm is taking to “remain relevant in the eyes of consumers”.

“We recently announced our City Centre Approach starting with London, and we will continue to invest in being more convenient through our enhanced service offer and digitisation,” he said.

In 2018, IKEA spent time and money further developing its online proposition, with 2.5 billion website visits for the firm across the year, and online sales increasing by 14.4% year on year.

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