Ikea, the Sweden-based self-assembly furniture store that opened in Jacksonville in 2017, experienced at least four pandemic-related shifts.
Those are increased demand; supply chain issues; staffing challenges; and customer moves toward online ordering and pickup, including the end of the Ikea catalog that began distribution in 1951.
“The Ikea business idea is to offer a wide range of home furnishings for design and function at prices so low that as many people as possible will be able to afford it,” said Chris Nace, Ikea market manager in Jacksonville.
“It’s about being available to the masses, and that’s something we carry with us today.”
It also is focused on sustainability in all areas of the privately owned company’s operations.
Nace spoke Sept. 28 to the JAX Chamber South Council, which met at Prati Italia in The Markets at Town Center.
Ikea operates a 290,000-square-foot store at 7801 Gate Parkway, at Interstate 295.
It was the company’s fifth Florida location.
Pandemic effect
Nace said the pandemic, which led to business shutdowns in March 2020 and people working from home, affected business.
“If you look at home furnishing companies, The Home Depot, Lowe’s, local handymen, contractors – everybody’s gotten a lot busier,” Nace said.
“People are spending a lot more time at home, so it is actually increasing the demand in our business.”
The downside is supply and staffing shortages.
As for supply, “we’re trying our best to get as much as we can,” Nace said.
At the time of his presentation, he said he had seen information “that we had over 11,000 containers on ships waiting to come into ports.”
“The ports are backed up. We have global suppliers. The pandemic has hit them differently all over the globe,” he said.
The Wall Street Journal reported Oct. 15 that a significant share of the world’s largest furniture seller’s products “are missing from store shelves around the world, with many of its flatpacks and houseware items sitting idle at warehouses waiting for trucks.”
The companion challenge is staffing.
“Probably like a lot of other businesses, staffing has been really difficult especially in the past six to nine months,” Nace said.
The Jacksonville store fluctuates from 230 to 260 employees.
He said the location is not one of the company’s highest-volume stores.
“We’re growing as the area’s growing. I think they put this store here, looking five, 10 years down the road,” he said.
The market area is considered to be within an hour’s drive.
“This is an investment. We see Jacksonville (as) a growing city.”
Nace said the stores carry about 9,500 items.
“Our stores are our bread and butter,” he said. “But we’re seeing a giant shift going from malls and brick-and-mortar.”
Business has become convenience-based, he said.
“Everybody is looking more and more for convenience, so it’s up to us now how we are going to adjust to that.”
He said the company didn’t immediately embrace technology but has worked to catch up.
“We now have where you can click on online and have it delivered. You click on online and pick it up in store,” he said.
Ikea built a separate parking lot on the side of its store “so that if you want to run in and pick it up you don’t have to park in the main parking lot, walk all the way around and come in,” he said.
Or, “you go to your app, check in and we’ll bring it right out to you.”
At the same time, Ikea has discontinued its catalog.
“This past year was the last year that we actually had a printed catalog,” Nace said.
“After 70 years, it’s going 100% digital.”
He said that growing up in the Northeast where Ikea operated, “every year you would get your catalog and every year you would look forward to that,” he said.
Nace told the JAX Chamber council that Ikea is the world’s largest home-furnishings company with 459 stores in more than 50 countries.
The Jacksonville store is one of its smaller stores as well as one of just a few single-story locations. Most are two levels.
The new 700,000-square-foot store in the Philippines is the company’s largest.
“It’s a long and winding road to get through our stores. That is very intentional,” he said.
That includes to the restaurant, where Ikea serves traditional Swedish fare, including meatballs, and other food.
Stockholm-based Ingka Group owns most Ikea stores.
Retaildive.com reported Oct. 14 that Ingka Group reported Ikea retail sales increased 6.3% year over year to $43.4 billion in the past fiscal year.
It said the e-commerce share of sales increased from 18% to 30% as a result of the retailer transforming its stores to also serve as fulfillment points, revamping its website and continuing rolling out the Ikea app.
Sustainability
Ikea comprises the initials of founder Ingvar Kamprad along with Elmtaryd, the farm where he grew up, and Agunnaryd, the nearby village.
He set up Ikea at the age of 17 in 1943, added furniture in 1948, opened the first showroom and introduced the flat-pack in 1953, opened the first restaurant in 1960 and the flagship store outside Stockholm in 1965.
It opened its first U.S. store in 1985 in Philadelphia.
Nace said Ikea has focused on sustainability, including energy, recycling, food sourcing, delivery and product resources.
Ikea installed solar panels when it built the Jacksonville store and as it retrofitted.
“This allows us to generate a lot of energy, especially in the sun in Jacksonville. Sometimes we can actually have the ability to put it back into the JEA grid,” he said of the city utility.
Ikea recycles. “We recycle 90% of all our trash and it amounts to about 252 tons that we avoided going to the landfill,” he said.
Ikea also is reducing its food waste and increasing its healthy options. By 2025, Nace said, “we’re looking at 50% of our menu will be plant-based.”
Ikea will keep its famous meatballs, he assured the members, along with other customer favorites.
“We’re keeping our salmon. There still are basic things that we’re going to have, but the future is going more and more toward these healthy options.”
The company is discussing transportation. “We’re even looking now at 2030 – how can we have our supply chain be entirely electric vehicles?”
Ikea bought more than 11,000 acres in Southeast Georgia.
Reuters reported Ingka Group said in January it bought more forest land in the United States as part of its goal to become carbon neutral by 2030.
The company bought a 10,840-acre property, to be managed by investment arm Ingka Investments, from The Conservation Fund. The property is near the Altamaha River Basin.
According to CNN.com, Ingka Investments has bought 612,821 acres of forestland in the U.S., Estonia, Latvia, Lithuania and Romania since 2014.
Along with the Georgia land, the group owns forest properties in Alabama, Oklahoma, South Carolina and Texas, according to CNN.
For its furniture, Nace said Ikea is focusing more on the use of bamboo, “a very, very sustainable wood.”
“It grows really quickly, it’s very hardy. So, we’ve been making more and more products with it.”
Values
Sustainability fits within the company values, Nace said.
“Our culture is very, very middle-of-Sweden rural. It’s simple, humble, togetherness,” he said.
Nace has been with Ikea for 20 years, including 2½ years in Jacksonville.
“I got introduced to a lot of companies in the ‘80s and the ‘90s, and nobody ever talked that,” he said of corporate values.
“I got to Ikea in 2001 and that’s the first thing I learned in my onboarding. The first day was about the company’s values.”
Nace joined Ikea at the U.S. corporate office in the Philadelphia area.
He said that as a private company, Ikea, not public shareholders, can decide what to do with its money.
“Whatever we want to do, we can do,” he said.
“It allows us to be unconventional, which is something we’ve always prided ourselves on and I think it’s always been a very positive thing.”
Nace said Ikea’s “people and planet positive” initiative includes sustainability and diversity and inclusion.
“We’re very vocal with equality as a basic human right,” he said. “We’re very proud (that) just over 50% of our managers globally are female.”
Nace said Ikea supports area charities and schools, as well, with donations and volunteer time.