Although rising inflation and interest rates weighed on the minds and pocketbooks of consumers in 2023, the furniture and housewares retail giant IKEA still had a record sales year including $6.3 billion in U.S. revenues.
That result was the payoff of investments in its supply chain that allowed the company to cut its business costs and pass those savings along in the form of lower prices, IKEA executives said in a session at the Retail Industry Leaders Association (RILA) trade show in Dallas today.
The company updated its infrastructure with new technologies like a yard management system (YMS) to better track inventory and cut freight costs through reduced demurrage fees, flying drones to count inventory in warehouses at night with 30 to 40% better accuracy than hand tallies, and artificial intelligence (AI) that helps ensure that all 200 items in a kitchen set are stocked in the same store at once, according to Tanja Dysli, chief supply chain officer, IKEA USA, IKEA North America.
Those investments have helped IKEA keep up with broad changes in the ways that consumers shop, as the company has overhauled the brick and mortar model that served it well for the past 60 years in a move to match the dramatic acceleration of e-commerce, Dysli said in a sessions called “Investing to meet the evolving customer.”
