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IKEA puts ‘digitalisation of retail’ in spotlight with major store expansion

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IKEA is planning to invest €5.8bn (£5.1bn) in real estate over three years as it looks to enhance its omnichannel offering.

The home retailer announced at the MAPIC conference that its shopping centre division Ingka Centres is planning to increase its centre portfolio from 43 to 70 by 2025. The centres combine an IKEA store with other retail outlets and leisure and entertainment areas, currently serving more than 480 million visitors each year.

While the existing stores are generally placed in suburban areas, the new roll out will focus primarily on big city centres across Europe, Asia, North America and Oceania.

The first centre will open in 2022 in the Linkong district of Shanghai, China, including 300 stores and a roof garden. Similar locations in Changsha and Xi’an are expected to follow.

The chain will launch its first shopping centre in India, following IKEA retail opening its first store in Hyderabad in August 2018.

The retailer will also upgrade its existing locations with extensions and refurbishments and add new facilities.

The company said it is also planning to “embrace the digitalisation of retail”.

It said it will use customer data to “be more in touch with and closer to its customers than ever before”.

IKEA said that it would be implementing new types of payment solutions, exploring the use of loyalty programmes and online communities and introducing hands-free shopping.

Gerard Groener, Ingka Centres MD, said: “The €5.8bn we are investing across the world will see us embark on new projects, expand into new markets and upgrade our existing portfolio to create next generation meeting places for a more omni-channel world.

“We look forward to discussing the significant opportunities our new plans will offer international brands during our time here at MAPIC.”

He added: “There will be no one size fits all format for these IKEA anchored destinations – a mix of city centre, suburban and edge of town locations are all being considered depending on local demographics.”

IKEA is ranked Elite in IREU Top500 research, and is a Top250 retailer in IRUK Top500 research.

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