Ingka Group Invests in IKEA South Korea Technology

August 26, 2024  by Karen Parrish in Business Strategy, Industry   

IKEA is constantly developing new and exciting ways to make shopping more convenient, affordable and accessible for customers everywhere. As part of a global effort, stores are transforming to better meet these needs.

Store changes differ per market yet among the changes are updates to commercial inspiration, food offers, delivery & pick-up options and more. Many stores are adding automation solutions and AI technology to support fulfilling customer orders, offering better omnichannel capabilities.

The commitment to improving customer experience is evident by the global investments being made around the world. Over the next three years, Ingka Group will invest EUR ~300M into the Korean market.

IKEA South Korea has used EUR 11M to strengthen the fulfilment of online orders in stores.

IKEA Korea implemented the automation solutions in the IKEA Giheung store to meet the growing delivery demands driven by the continuous growth of e-commerce. By leveraging existing stores as key fulfilment hubs, the country aims to provide a more enhanced omnichannel shopping experience with faster and more accurate delivery services.

The automated warehouse solution at the IKEA Giheung store uses wireless-controlled robots to store products in optimized locations. Upon receiving an order, these robots pick the products and transport them to ports where co-workers are stationed.

This reduces the manual labor of walking and picking for co-workers, allowing them to focus on quality and other related tasks. The picked products are then moved to the automated packaging system, where a 3D scanner creates boxes that fit the product size, and the system automatically handles cutting, taping, weighing, and attaching invoices in one seamless step.

Through the introduction of these solutions, IKEA Korea plans to significantly enhance the shopping experience by increasing operational efficiency while also offering more ergonomic support for co-workers. The new technology can process approximately 2,000 orders per day thus increasing picking efficiency by 8 times and can pack 300 boxes per hour.

The solution also supports the strong sustainable efforts by optimizing energy and use existing stores. Just 10 robots use the same power as one vacuum cleaner! The automated packing solution creates custom-sized boxes from FSC-certified cardboard, minimizing over-packaging and resource use.

“This is a great milestone in our omnichannel journey – both for IKEA South Korea and globally,” says Marcus Baumgartner, global head of fulfilment & services for Ingka Group. “By revamping our stores and embracing new technology, we are able to support our co-workers while still providing inspiration for our customers and being closer to meeting their needs.”