Do you love IKEA? Love it just the way it is? 

If so, sorry to hear. Because the Swedish retail giant just announced that it's going to make a series of radical changes, "its boldest ever restructuring," that it hopes will completely change the way you think about it.

"So far as we can recall we haven't had this before," Tolga Oncu, IKEA's head of retail, said in an interview with The Wall Street Journal announcing the changes. "We do it because we want to secure IKEA for the future."

Here's what you can expect to change:

Urban stores

They'll open 30 new stores in city centers, moving from their classic model of being on the outskirts of major cities to one where they're closer to where many of their customers live.

The first of these is set to open in downtown Paris in the spring (that sounds nice). It's 5,000 square meters (about 54,000 square feet), which means it's about 25 percent as large as the typical outskirts store.

After Paris, plans are to launch urban stores in London, New York City, and Riyadh. If all goes well, the company said it will also open in downtown Washington, D.C., Los Angeles and San Francisco.

Changing the layout

About 80 percent of IKEA customers research their purchases online before visiting stores, so IKEA says it's going to cut the number of products it displays on the floor.

Instead, they'll dedicate more of the floor space to mock ups of living rooms, kitchens and bedrooms showing ideas on how all their furniture can work together. The hope is that this will emphasize the experiential part of visiting the store, and encourage people to make the trip as opposed to just shopping online.

No word on whether the smaller stores will change the sometimes confusing paths that customers are encouraged to follow, which can take them through the entire layout before finally reaching the product they came for and are interested in. 

More delivery

Last year, IKEA bought Task Rabbit, so that at least customers who don't want to spend their Saturday afternoons assembling furniture with a tiny Allen wrench have an easy option. And they've also toyed at least with the idea of just selling all their products on Amazon or other third-party sites. 

The company said Wednesday it's planning to invest more in delivery, so as to make the whole experience more convenient.

There aren't a ton of details on this development, but if you ever visit an IKEA outside a city like New York and see the parking lot filled with Zipcars, you'll see why this would make sense.

Job cuts and new jobs

Finally, the bad news for some IKEA employees. The company will quickly cut 7,500 jobs around the world. Most of these are back-end clerical and support jobs, like communications and human resources, and other administrative positions.

However, they'll then add another 11,500 new jobs over the next two years, which will be focused on three things: increasing delivery options, upgrading the online presence, and improving the in-store experience. IKEA currently has about 160,000 employees.

Oncu told the Journal that he believes the job shifts will "cut red tape and speed up decision making."

Overall, it seems like these are changes designed not just to change the stores, but to change the way that customers think about IKEA. In fact, instead of an all-day trek to the suburbs, more customers might wind up furnishing an entire apartment with IKEA furniture-;but never even actually visiting an IKEA store.

"We see of course that the world around us is changing," Oncu said, "and we want to be part of that." 

Published on: Nov 22, 2018
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