Almost 3 billion euros in one year
IKEA is without exaggeration the largest chain of furniture stores in the world. The company has more than 313 department stores in 38 countries, in Europe, the United States, Canada, Asia and Australia. In addition, the IKEA catalog contains about 12.000 products and is printed in over 160 million copies.
IKEA's business model has managed not only to make the company a global phenomenon but to force other companies in the industry to copy it in order to be able to compete with it to a small extent. IKEA's reasoning was simple, to create huge stores with show-rooms and to offer furniture without assembly and transportation at lower prices, a furniture supermarket as they accused it, but with great success.
But data is changing with millennial shoppers not wanting to walk away to shop and show their clear preference for online and small shops in the city center. Thus, IKEA is forced to open smaller and more stores in cities around the world and to invest in online stores and digital marketing with the cost reaching 3 billion euros, ie a "loss" of 20% compared to last year.
The good news is that investing in the online market has doubled in sales in a year. But changing the model in stores takes more time and money.
Watch the detailed video from Reuters: