Ikea Proves that E-commerce Can Boost Employment, Asserts Augusto Beato

Portland SEO's Augusto Beato noted that Ikea's case is evidence that human labor is not being discarded merely because a company is transitioning to e-commerce.

The Swedish company plans to cut 7,500 jobs worldwide as part of a plan to cater more to online customers but intends to create 11,500 by opening 30 new stores in urban centers and by investing in its e-commerce and delivery offerings.

Most of the job cuts will not hit Ikea’s retail workers, but rather those in office positions including human resources and communications.

"While digitization brought about by e-commerce is a threat to numerous jobs, it will also be responsible in creating an equal number of new jobs," avers Beato, who is the CEO of Portland SEO. "Automation has helped create jobs in e-commerce, rather than eliminate them."

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The shakeup at the Swedish firm, first reported by the Wall Street Journal, shows that even Ikea – known for its massive suburban stores and affordable assemble-yourself furniture – is not immune to the online competition that has affected other brick-and-mortar retailers.

Lars Petersson, Ikea’s manager for U.S. retail operations, said the company wants to “create the IKEA of the future by … being more accessible and fully embracing technology.”

In a financial report last month, the company said that during the 12 months ending Aug. 31 its website drew 2.5 million visits but accounted for only 5 percent of sales.

The same report noted that Ikea has been experimenting with retail concepts aimed at expanding beyond the massive suburban stores the company is known for. In the past year, the company has opened smaller stores — ones that essentially serve as showrooms but not warehouses — that make sense in city centers or smaller communities.

Ikea has also opened temporary pop-up stores and remote pick-up points, which allow customers to order in store or online, then pick up items somewhere closer to home. That’s potentially more convenient than a trip to the ‘burbs and cheaper than paying to ship heavy goods.