IKEA is best known for its self-assembled furniture, and Swedish meatballs available at its stores. But the next big thing people may associate with IKEA are robots. The company plans to employ many more robots and automation in its business to adapt to surging demand. Colin Campbell reports for Supply Chain Dive:
Ikea is seeking to improve its e-commerce capabilities after struggling to adapt to the surge in orders at the beginning of the pandemic.
Ikea upgraded its physical stores in addition to its distribution and customer fulfillment networks as it pursues an omnichannel transformation. But significant transport and raw material constraints continue to drive up costs, “with no anticipated break in the foreseeable future,” Ingka Group said.
Inter Ikea Group, the Ikea franchisor, absorbed an estimated $280 million in supply chain-related costs in FY21 and expects to take on more related costs in FY22.
Large retailers have turned to operational investments to mitigate high transportation costs. Big Lots and Arhaus, for example, invested in their fulfillment operations after Vietnam factory shutdowns and other disruptions battered the furniture retail industry.
Ikea plans to launch 80 projects using robotics, automation and drones for fulfillment in stores, compared to 32 such projects in FY21, the company said. It expects to open more stores and expand its click-and-collect service, which costs Ikea about one-fifth as much as home delivery. The company did not provide specific estimates for improved lead times or delivery sustainability.
“We’ll open 30 new customer meeting points in various formats in this financial year, from the traditional stores with the full experience to planning studios and inner city stores with same day delivery,” Öncü said.
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