Ikea closing their Coventry store is irrefutable proof of this transformation period in retail

Ikea has announced that it will be closing its Coventry store, marking the first closure of a large UK site since the retailer’s launch in the country 33 years ago. In response to this, Elliott Jacobs, EMEA Commerce Consulting Director at LiveArea, told IT Supply Chain why he believes that Ikea must optimise its supply chain in line with consumers moving online and increasing demands for instant gratification.

“Modern customers aren’t happy pushing trolleys across multi-story stores on the outskirts of towns. Instead, they demand instant gratification, in the form of same collection or next day delivery for free at convenient locations. Ikea are, therefore, increasingly investing into click-and-collect facilities within city centres as seen in Stratford, Norwich and Aberdeen.

“Consumers expect ease, before all else.  To thrive, companies will have to optimise their supply chains accordingly. Making physical stores logistics hubs is just one step in reacting to the changes landscape. Forward-thinking brands are transforming operations by leveraging inventory strategically across stores and distribution centres. Not only does this enable them to get products to customers from the closest possible point, but it also reduces the costs involved and allows retailers to compete with the likes of Amazon on same or next day delivery.

“Technology can be used to simplify inventory management processes, which have become more complex as omnichannel becomes a priority. Here, analytics can be used to identify bottlenecks, display which products are most popular and profitable, and optimise the relationship between sales and inventory.

“The news of Ikea’s Coventry branch marks the first closure of a large UK site in 33 years. It underlines the pace of change within retail. Retailers must realise that the physical store is not what it once was and take steps to accommodate consumer preferences by optimising the supply chain for a digital-first approach.”

 

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