IKEA South Korea Adds Automated Micro-Fulfillment Solutions
IKEA's largest franchisee, Ingka Group, invests approximately Euro 11 million to add automation technology at IKEA South Korea, aiming to shorten delivery times, improve working conditions for co-workers, and enhance the overall customer experience. As part of this initiative, IKEA Korea has implemented automation solutions at the IKEA Giheung store to address growing delivery demands driven by e-commerce expansion. The store now uses wireless-controlled robots to optimize product storage and retrieval. When an order is placed, these robots pick the products and transport them to designated ports where co-workers manage the final steps. This reduces the need for manual labor and allows co-workers to focus on quality control and related tasks.
IKEA is constantly developing new ways to make shopping more convenient, affordable and accessible for customers everywhere. As part of a global effort, stores are transforming to meet these needs better. Many stores are adding automation solutions and AI technology to support fulfilling customer orders, offering better omnichannel capabilities. 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 fulfillment of online orders in stores.
IKEA Korea recently implemented a new automated solution 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 fulfillment 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.
In addition to robotic automation, the IKEA Giheung store has introduced an advanced automated packaging system. A 3D scanner creates custom-sized boxes for each order, ensuring minimal waste. The system automatically cuts, tapes, weighs, and attaches invoices to the boxes in a single, seamless process. This packaging solution is both efficient and sustainable, as it uses FSC-certified cardboard to minimize over-packaging and reduce resource use.
The automation technology implemented at the IKEA Giheung store can process approximately 2,000 orders per day, increasing picking efficiency by eight times compared to traditional methods. The system can also pack 300 boxes per hour, further speeding up fulfillment. The robots are energy-efficient, with 10 robots consuming the same power as a single vacuum cleaner, contributing to IKEA's broader sustainability goals.
This investment is part of Ingka Group’s larger plan to invest Euro 300 million in the Korean market over the next three years.
Before the implementation of the automated order-picking solution, each order picker at Ikea would travel an average of approximately one kilometre to prepare an order, with a productivity rate of 20 order lines per hour. With the new automated and data-driven solution, productivity is expected to increase to up to 170 order lines an hour. This represents a considerable boost to efficiency and a significant return on investment.
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”
– Marcus Baumgartner, Global Head of Fulfilment & Services for Ingka Group
