“The whole secret lies in turning our challenges into our greatest opportunities. Ever since the beginning, we have always stayed very curious and open for change. This is part of the DNA of Ikea,” Öncu explained. 

Reimagining the big blue box

Like many savvy retailers since Covid hit, Ikea has focused on its online capabilities in the past couple of years, upgrading its app and website. But at the same time, the business also began considering how to complement its existing physical stores with creative new formats to meet changing customer needs. 

“We started to develop new formats ranging from around 40 square metres. A traditional Ikea store is about 30,000 square metres. We call it a small Planning Studio to support and help the customers in their journey to create a better everyday life at home,” said Öncu. 

At Ikea’s Planning Studios around the world, customers can receive one-on-one advice from its experts to help them design their homes and kitchens. The Studios are also conveniently located near public transport, making it easy for customers to access the spaces. Its first store launched in Singapore last year and has since rolled out across the US, Canada, Korea and Thailand.

Ikea also launched city location stores last year, the first of which opened in Vienna in August, featuring seven storeys, same-day delivery by electric trucks, solar panels and 160 trees. A rooftop terrace and hostel are also located on the top level of the store.

Solving the last mile with robots

Pre-pandemic, only 4 per cent of Ikea’s business was online. Now, it’s 30 per cent.

“Of course that puts tremendous pressure on the system. The closer [our stores] come to where many people live, socialise and work, the bigger demands it puts on how we bring our goods to people’s homes,” explained Öncu.

Last year Ikea opened its first automated warehouse in its store in Zagreb, where thousands of Ikea products are stocked in bins that can be brought to an Ikea worker in just 15 seconds. The bins can store up to four times more products compared to normal Ikea warehouse racking and allows up to 60 per cent more total volume. It’s also energy efficient, as 10 robots use the same amount of energy as a vacuum cleaner, according to Ikea.

Driving change through electric vehicles

“If we want to make a change, we have to take responsibility. Entering the most important decade of human mankind, we have decided to lead through action,” declared Öncu,. “Ingka Group is determined to lead the movement towards 100 per cent zero emissions for home deliveries by 2025. As a group, we are also committed to the goal of becoming a climate positive business by 2030, while at the same time, continuing to grow our business.” 

One of the changes Ikea has made recently to meet these goals has been through its implementation of electric delivery vehicles. Last year, the company made 70 million home deliveries, but as Oncu revealed, “only 11 per cent of them were made with zero emission vehicles. I want that number to be much higher”. At the moment, Ikea has 500 zero emission vehicles operating in 25 countries.

“And that’s not enough,” said Öncu. “We can’t do it alone, so we are partnering with all the original equipment manufacturers to redesign the vehicles to fit the purpose of large orders, like home furnishings, complete kitchens, living rooms and so on.”

In February this year, Ikea also installed 700 electric car charging points at 20 of its stores, expanding Sweden’s network of charging stations by 18 per cent.

“Change is in our DNA at Ikea and it has been ever since [founder] Ingvar Kamprad started the company,” said Öncu. “We are seeing how the world is evolving and the way people shop is fundamentally changing. I admit that to change our business model is difficult…but if you want to serve many people, you need to stay open and listen.”