IKEA Investing $2.2 Billion to Expand Omnichannel Capabilities in US

IKEA is expanding its omnichannel capabilities with its biggest investment in four decades in the United States.

The $2.2 billion investment over the next three years will add new locations, strengthen its fulfillment network and expand its product line, the home furnishing retailer said in a Thursday (April 20) press release.

The U.S. is one of our most important markets, and we see endless opportunities to grow there and get closer to the many Americans with affordable products and services,” Ingka Group Head of IKEA Retail Tolga Öncü said in the release. “More than ever before, we want to increase the density of our presence in the U.S., ramp up our fulfillment capacities and make our offer even more relevant to local customers’ needs and dreams.”

IKEA’s growing U.S. presence enabled by the investment will support both in-store and online shopping. The firm expects to open eight new brick-and-mortar stores; nine new Plan and Order points at which customers can work with IKEA experts to design a kitchen, bedroom or living room project; and 900 new Pick-up locations at which customers can collect products they have ordered online, according to the release.

The firm will also use the new investment to modernize its existing stores, boosting their capacity to handle parcel deliveries directly from the store, and to transform its last-mile delivery network, aiming to make deliveries faster, more affordable and more sustainable, the release said.

“We know U.S. customers have a strong desire for more ways to shop and experience IKEA, and this growth plan will allow us to meet that need,” IKEA U.S. CEO and Chief Sustainability Officer Javier Quinones said in the release.

IKEA’ announcement of this expansion comes about three months after home goods retailer Wayfair said it was cutting 10% of its global workforce in an effort to reduce the layers of management and make the company more agile.

Before reporting those job cuts Jan. 20, Wayfair had already laid off 5% of its global workforce in August 2022 as a pandemic-driven surge in growth unexpectedly sputtered.

IKEA has also been ratcheting up its digital capabilities in several ways, Ingka Group (IKEA Retail) Global Payments Manager Anna Pulante told PYMNTS in an interview posted in an interview posted in January.

“We’ve recently introduced a new way of shopping at IKEA, and that’s being able to shop and go within your app,” Pulante said at the time.