Ikea stores to double up as online distribution centres

Swedish homeware chain Ikea plans to use its stores as e-commerce distribution centres too. Numerous stores will be remodelled over the coming months as the basis for this solution, which Ikea claims will result in faster, cheaper and more sustainable deliveries. The Ingka Group, which owns the most Ikea stores worldwide, is investing €3 billion in the transformation.

Ikea currently ships all online orders from dedicated distribution centres (DCs). However, Tolga Öncü, Operational Director of the Ingka Group, believes that it makes a lot of sense to turn the existing self-service warehouse sections that are characteristic of Ikea stores into actual warehouses.

Especially now that the coronavirus pandemic has accelerated the e-commerce trend among consumers, the retail giant has been increasingly thinking about alternative solutions, Öncü told Reuters press agency: “Instead of building central warehouse capacities for online buys, why don’t we send them from our Ikea stores?”

Automating warehouse sections

Between 30 and 40% of all 460 Ikea stores will be given a dual role over the coming months. The DC function will have some impact on the retail floorspace, since in most cases the size of the building will remain unchanged. A substantial portion of the investment will therefore be spent on automating the warehouse sections.

According to Öncü, shipping online orders directly from stores has several benefits. A pilot project at an Ikea store in Kuopio, Finland, cut delivery times to customers by half and reduced the delivery costs by 40%. Moreover, the shorter trips to customers resulted in a significant decrease in CO₂ emissions.