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Better homes

Better homes Accessible and affordable for all

Making IKEA more affordable and accessible

In today’s retail landscape, customers want convenience and easy access. People shop more online and expect better delivery services at lower prices. They are also more careful about their spending. Accelerated by the Covid-19 pandemic, the need for convenient, affordable home furnishings that are also sustainable is greater than ever before.  

To reach more of the many people, and meet their changing needs and expectations, we are committed to offering a great IKEA experience at all customer meeting points. Whether it’s the full experience at one of our IKEA stores, the convenience of shopping online or a spontaneous visit to one of our city locations, customers should always get a great service and access to the IKEA range integrated with affordable, convenient and sustainable services.  

Our approach

We are stepping up our transformation to take a true omnichannel approach, offering sustainable products and services that the many people can afford, growing in both relevance and size. Through  a relentless customer focus, innovation and collaboration – we will do what it takes to keep creating a better everyday life for the many people.  

We are focusing on:

Accessible anywhere, anytime: To meet our customers’ changing needs, we are accelerating the biggest transformation in IKEA history – bringing IKEA to more people in new ways. We are speeding up our expansion into cities, transforming our IKEA stores to also serve as fulfilment units, and improving the digital experience. We are taking an omnichannel approach, with a variety of digital and physical customer meeting points that meet different needs at different times, The goal for our expansion is simple: we will be where the many people are – offering more people the ability to choose when, where, and how they want to engage with IKEA. 

More affordable, more inclusive: As we grow, we must stay cost-effective and innovative, providing an increasing number of customers with the products and services they want, at affordable prices.

Family walking outside IKEA store

By offering convenient, low price services for different needs and budgets, and new financing services that are inclusive and fair, we continue to make IKEA affordable for people with thin wallets. IKEA is, and always will be, affordable for the many. 

Powered by our entrepreneurial spirit: We have a history of entrepreneurship and coming up with creative solutions to difficult problems. Together, we’re determined to make this transformation happen – fast.

Our backbone is our culture and values, the IKEA Brand, passionate people and a deep knowledge of life at home and sustainability. This transformation is just the beginning, as changes will of course continue to accelerate. We are determined to lead home furnishing retail into that future. 

To read more about our transformation and customer focus, see The Next 10 jobs.

Progress and challenges in FY21

In FY21, we saw even higher demand for online shopping and convenient services than we did in the first year of the pandemic. Accelerating our omnichannel transformation, we took new steps to meet our customers’ new and rapidly changing needs at home with major developments to make our offer even more accessible, affordable and sustainable. While working within the restrictions, we were able to open new IKEA stores, services and markets, as we continued our expansion in big cities. 

Our biggest challenge remains the product supply and availability issues caused by the worldwide issues affecting logistics and transportation in the wake of Covid-19. Customers are not always getting the products they want, or having to wait too long to get them. We are taking bold steps to improve the situation as fast as possible and provide a great customer experience, despite the challenging circumstances. 

We saw strong growth during FY21:   

  • IKEA retail sales of EUR 37.4 billion for FY21, an increase of 6.3% compared to last year (EUR 35.2 billion in FY20). 
Mobile screen
  • An increase in the share of online sales from 18% to 30% enabled by transforming stores to serve also as fulfilment units, a revamp of IKEA.com and further roll-out of the IKEA app. 
  • 1.2 billion EUR in remote sales from customer support. Our Customer Support teams now also focus on sales, offering planning sessions and taking orders over the phone, live chat and email, one to one video and live stream. 

IKEA Zagreb launches automated warehouse for small home furnishing products

Solid growth and accelerated investments as life at home is more important than ever

The new inner-city IKEA store that’s rethinking just about everything

IKEA opens first store in Slovenia with strict pandemic measures in place
IKEA co-workers welcome first customer to IKEA Kyiv

IKEA expands into Ukraine with Kyiv store opening

Ingka Centres Acquires 6X6 Building in Downtown San Francisco

Ingka Centres acquires Toronto shopping destination to be anchored by IKEA Canada’s first downtown store

Enabling more online sales

To meet the big increase in online orders we are integrating our stores into our delivery network and adopting new technologies to increase fulfilment rates.

What did we do in FY21?

Turning stores into a delivery network

At peak capacity in FY21, we handled almost four times as many online orders in a week as the year before, with many orders fulfilled by our stores. As part of our transformation, we were already adding fulfilment capabilities to our IKEA stores, handling pick-up and delivery for products bought in store, online, via another IKEA customer meeting point or through Customer Support. Now, we are accelerating those initiatives, making major changes to quickly adapt and serve our customers in new ways. This can offer shorter lead-times for customers and be good for the environment by reducing transport miles.  

co-worker walking with IKEA products

Automation for better ergonomics

We have accelerated the implementation of automated solutions, like mobile robots that can bring products to co-workers for faster and more ergonomic order preparation.

  • IKEA Zagreb in Croatia launched an automated warehouse, with the capacity to bring products to a co-worker in just 15 seconds. Using small, radio-controlled robots to retrieve products, the warehouse can store 60% more total volume, while reducing walking distances and improving ergonomics for IKEA co-workers. With 10 robots using the same amount of power as a vacuum cleaner, it’s also energy efficient.
  • IKEA Kuopio in Finland, now offers parcel deliveries to the entire country (even in the far north), with just 2-3 days lead-time. It’s thanks to an automated storage and picking solution with robots fetching products for co-workers. Greater picking and packing efficiency and accuracy, means customers benefit from shorter delivery times, while co-workers enjoy a safer and more ergonomic working environment. Since the solution is scalable, the Kuopio store has increased their capacity by hiring more co-workers and ordering 23 more robots.  
Automation system
  • In Norway, we’ve been piloting a machine learning tool that improves forecasting accuracy and helps to ensure better availability of products for customers. Traditional demand forecasting is based on statistical sales, looking at patterns from previous years. Demand Sensing calculates the forecasts and predicts the future in a smarter way looking at a range of factors from the weather forecast, to external events and even when people get paid. It also enables forecasting at a local level. Results from the pilot suggest the system is having a positive impact on forecasting, driving better availability for customers and improved efficiency for co-workers. After the successful pilot, we have now started to implement the solution globally across Ingka Group.
  • We are testing a concept called “Box on demand”: machines that create customised boxes depending on the size and shape of the total customer order. This leads to a better picking and packing process and is also more sustainable, reducing the number of boxes per order. The test is running in warehouses in USA, Canada, Australia, Netherlands, Italy and Poland. In the Netherlands, we are also testing a solution that enables picking directly into the box, which is much more efficient and ergonomic for our co-workers.

Reaching more of the many people

To become more accessible, we are opening more customer meeting points than ever before. Following through on our omnichannel growth strategy, we continue to reach more of the many people.

What did we do in FY21?

Even while complying with pandemic-related restrictions and lockdowns, we were able to expand into new markets and open new IKEA locations in FY21, with six new IKEA stores, four IKEA small stores, four IKEA shops, 12 IKEA plan and order points, one ecommerce opening and two Ingka Centres.  

Vienna rethinks just about everything

We opened IKEA Vienna Westbahnhof, one of our first inner-city stores offering the full IKEA experience and range of products. With a roof terrace sheltered by solar panels, 30 bird nesting sites and 160 trees growing throughout the building, the GREENPASS® Platinum certificate awarded store is expected to help improve local air quality and lower the temperature of the surrounding area during warm weather. IKEA Vienna Westbahnhof offers the full range of IKEA products and same-day or next day home delivery by electric vehicle, so that customers can leave the car at home.

buildings and trees

First store ever in Slovenia

Our first Slovenian IKEA store in Ljubljana, is one of the most centrally located IKEA city stores in the world. The store has 52 inspirational room settings that reflect IKEA’s findings into how Slovenians live and their main home furnishing needs, as well as sustainability features like solar panels and vegetation on the roof, geothermal pumps for heating, and rain collection system for water saving.

co-workes clapping hands

From online to city store in Ukraine

After launching ecommerce in Ukraine in 2020, we followed up with our first physical IKEA store in central Kyiv. The IKEA city store is focused on smart solutions for small space urban living. Customers can get help designing their living spaces in a dedicated planning hub and collect their chosen products in store 24 hours later. 

Co-worker celebrates

Second city location in Paris

As part of our big city expansion strategy, we acquired a major building on Rue de Rivoli in the heart of Paris, where we also launched ”IKEA Décoration”, our second inner city location in Paris. Specially curated for Parisian needs, the shop has a focus on inspiring, affordable and sustainable accessories and decorative items, as well as digital solutions and smart small space storage. 

Outdoor footage of IKEA store

Ingka Centres downtown San Francisco and Toronto

Ingka Centres acquired a top-location shopping centre on Market Street in downtown San Francisco. The 35,000 m2 property will be redeveloped around local community needs, digitalisation and sustainability. While in Toronto, Ingka Centres acquired a 12,270 m2 shopping centre located in the highly connected and bustling Downtown Yonge Area. The location will be home to a new IKEA Toronto Downtown store, an affordable and accessible destination for Toronto residents looking for the IKEA experience closer to home. The Ingka Centres city developments are using the same community-driven approach we are using for the transformation of Kings Mall in central London, which was acquired by Ingka Centres in December 2019.

People walking outside

Testing a new IKEA customer meeting point format

To become more accessible in areas where we don’t have any stores, we have started to test our new smallest IKEA customer meeting point format. Located in shopping centres and high traffic shopping areas, these small locations (30-75 m2) focus on sharing home furnishing knowledge and the full width and depth of the IKEA offer. Here, customers will meet experienced IKEA co-workers who are happy to help plan and order solutions and services from the IKEA range. There are no products to take home on the day – but everything you order is conveniently transported to your home. Following tests in France, Germany, Ireland, Italy, Poland, Portugal, Russia, Spain and Sweden, we will be opening and testing up to 40 locations in FY22.

Shopping mall

Better customer experience in our blue box stores

During the lockdowns in FY21, we took the opportunity to design more than 4,000 m2 of refreshed room settings and remodel over 650,000 m2 of store space at 174 stores in 14 countries. To make the full IKEA experience better than ever, we are investing heavily in upgrading our blue box IKEA stores to be as good as new, inspiring and digitally connected. We’re also making it a priority to communicate the sustainability attributes of the IKEA range to customers when they visit our stores.

Shoping inside of IKEA store

Social entrepreneurs delivering in Paris

We launched a pilot program in Paris for inner city last-mile delivery, together with a local social entrepreneurship that employs people who struggle to access the labour market.  

Customers can pick up their products at convenient micro-hubs across the city, which saves transportation cost and lowers their environmental footprint. Together with the French government, we also offer an employment transition and occupational training program. The pilot is a collaboration between Ingka Group, Yunus Foundation, Inter IKEA SocialEntrepreneurs and the IKEA Foundation.  

Riding a bike

Digital development for a better customer experience

Digital technology enables not just online sales, but all our sales channels and the way they fit together. It’s the very engine of our omnichannel approach – as customers move seamlessly from one IKEA meeting point to the next, we will be able to offer them what they need, whenever, wherever, and however they want. 

What did we do in FY21?

In FY21, the share of online sales increased from 18 percent to 30 percent.
Key actions included:

IKEA app launched in 31 countries

Sales through the IKEA app grew more than six times in FY21, to almost 1 billion EUR and the new IKEA app has downloaded 33.8 million times since 2019, with an average rating of 4.6 stars. It has now been launched in all but one of 32 Ingka markets, offering customers a simple and enjoyable way to explore our range and shop in an easy way on their phones. 

Scrolling through phone in bed

Testing 3D AR on Google search

In the spring and summer of 2021, we tested 3D Augmented Reality with Google, enabling customers in the US to see how IKEA products would look in their home, using Google search on their phone. This enabled them, for example, to decide in which part of their bedroom a nightstand would fit best, or how a cushion in different colours would look on their couch. 

Interior design in home

A faster checkout in 80 stores

A new feature in the IKEA app lets customers scan items with their phone as they go through the store, then pay at dedicated checkout kiosks, instead of processing all products at the same time at the cash register. This makes the checkout process smoother and up to three times faster, and co-workers are freed up to spend more time helping customers in other ways.  

Women scan IKEA product

Launching on Tmall across China

In 2021, we launched a virtual IKEA store on the leading Alibaba ecommerce platform Tmall, making IKEA available to the platform’s 700 million active users all over China. In China, ecommerce is highly mobile and app based, with big platforms like Tmall and WeChat dominating online shopping. We also have a continued strong online presence in China with IKEA.cn, the IKEA app, and the IKEA shoppable WeChat mini program. The added convenience and improved shopping experience take us one step further towards becoming a true omnichannel retailer in the country.

Picture of application

Always more affordable

Affordability and value for money is central to our offer as IKEA. From flatpacks to the popular Click & Collect service, we are always looking for ways to offer the best value to money our customers. We are constantly measuring our affordability against competitors and our perception amongst customers, fine-tuning our service offering and working with our franchisor Inter IKEA Systems to ensure that we have an affordable offer. 

What did we do in FY21?

Service options for all budgets and needs

In FY21, Ingka Group saw an increase of  48% in delivery services, and more than 38% of our retail sales were connected to a service like home delivery, assembly or installation. Accelerated by Covid-19, our customers want more convenient services, but with continued great value for money. To meet these needs, we now offer a variety of pick-up and delivery options at different price points. From the most affordable Click & Collect from store (priced at about one fifth of the price of home delivery), to Click & Collect near you (pick-up at a chosen location in your neighbourhood), to complete home delivery with the full convenience. Many IKEA stores also offer drive-through pick up and collection lockers as affordable, contactless options.

  • IKEA Russia is a good example of how we strive to combine accessibility and affordability in order to improve the customer experience and drive growth. Starting with the question “what if we could be just 20 minutes from our customers?” IKEA Russia set out to create an affordable pick-up option across Russia with a starting point of just 2 euros. In combination with an improved online experience and strengthened remote selling services, IKEA Russia went from 100 pick-up locations in FY20 to over 40,000 locations in the beginning of FY21. The new pick-up points are located all over Russia and can handle both smaller parcels and bigger furniture. The service has proven so popular, that it has become a growth driver in its own right.
co-workers caring IKEA products

Fair financing for 5 million people

With the launch of the new IKEA Financial Services, we want to give more people a chance to improve their homes while keeping their budget in balance, and we were able to assist more than 5 million customers in FY21. For many people, making a bigger investment in their home, like a new couch or kitchen, can be difficult if they don’t have savings, or access to some kind of financing to spread the cost over time. By making financing more available and affordable, we are giving those with the thinnest wallets more choices and more control.

To increase accessibility, we have made our financial services available in more countries (for example South Korea) and across multiple channels (for example, in France and the UK, we are increasing access from stores and online). In some countries, we’re also offering a wider range of home-related finance services from home insurance to furniture leasing and loans for IKEA home solar panels.

In the UK, we are developing a new model, together with Ikano Bank, that helps customers build a positive credit history.

Customers speak with co-worker

Keeping our customer focus, despite availability challenges

The pandemic continues to pose challenges for supply chains around the world, including the ones we rely on. This means that in the last year, our customers have not always been able to get the products they want, when they want them, which of course has sometimes impacted the customer experience.

What did we do in FY21?

Co-workers across the business have worked hard to keep offering a great IKEA experience, despite these challenges:

  • While we might not have the exact product a customer expects, we have put our focus on finding alternatives, helping our customers to create the life at home that they want with the products we have available. At the same time, we are being transparent so customers know they may have to wait longer for some orders.
  • We have narrowed our range in some cases, to make sure we can supply our most popular ranges and the products that customers want the most. By focusing on these key products and increasing our offer of regionally sourced products, we hope that our customers will have a better overall experience.
  • To mitigate the effects of the global supply chain disruptions in our operations we’ve collaborated with our partners to secure supplies of raw materials, minimise disruptions in production and do everything we can to secure additional transport capacity.

Our ambition is always to have 100% full shelves and 100% happy customers.

Co-worker in store

Read more about our movements here

Ingka Annual Reporting FY21

Ingka Annual Reporting FY21 | Better homes

Ingka Annual Reporting FY21 | Better lives

Ingka Annual Reporting FY21 | Better planet

Ingka Annual Reporting FY21 | Better company