The three ingredients behind Ikea’s growth strategy

Ikea founder Ingvar Kamprad had a hard time remembering numbers—giving way to the brand’s famously difficult-to-pronounce products—but one doesn’t become the world’s biggest furniture business without them. In 2025, Ikea, which now has over 500 stores across 63 countries and territories, reported global retail sales of over €44.6 billion (around $52.6 billion).

The brand has created an in-store experience centered around vast showrooms, competitive prices, and, yes, Swedish meatballs. Now, it’s reassembling its strategy around three main elements: new store rollouts, investment in e-commerce, and dynamic partnerships.

A smorgasbord of revenue streams

If you ask Rob Olson, interim CEO of Ikea US, Ikea is not a furniture brand but rather a “concept company.” This is perhaps one explanation for the success of the business famous for its giant blue warehouses, but how does that translate to an e-commerce environment? Olson said he is trying to make Ikea’s online operation feel like the showroom bedrooms and hallways customers are already familiar with.

“If you were to walk into a room set, [you could] find your sofa along with your best TV unit and a Billy bookcase off to the side to complete your solution. We need to be able to do that [on] the web as well,” Olson said.

One of the ways he and his team are making this happen is by implementing AI tools that allow customers to imagine what their room could look like after an Ikea glow-up.

“You can take a photo of your living room, and then you can erase what you have in there, [and] put in a new sofa, etcetera,” Olson said.

Ikea is also pursuing partnerships and collaborations to boost growth, including with TaskRabbit (for at-home furniture assembly), Disney (for pop-up shops), and Best Buy (for in-store crossovers).

“[It’s] about how to take the customer experience to the next level,” Olson said.

Ikea like you’ve never seen it before

In the last couple years, Ikea has been opening small-format stores to reach new customers who perhaps haven’t made the trek to the supersized version. Decisions like this are not made in a vacuum and always start with considering nearby retail locations.

“We don’t look at the stores in isolation. We look at the units as part of the experience that we want to create for the customers, and then the other options that are already available for these customers,” Jordi Esquinas Gimenez, Ikea US country growth and marketing manager, said.

In the Austin, Texas, metro area, the brand experimented with a variety of stores that fulfill different consumer needs. Some of these are smaller and can serve as a pickup point for online orders (according to Gimenez, 70%–80% of store purchases start on the web), or the perfect place to purchase kitchenware. Other stores in the area were opened at a medium size because they function as a traditional Ikea store for a smaller community.

Expert insight: growth motions

Neil Saunders, managing director at GlobalData Retail, said that despite Ikea’s global recognition, its tendency to place stores outside of urban environments has held it back from reaching more customers. Saunders thinks Ikea experimenting with new store sizes and locations could put the brand in a good position.

“There is a much greater emphasis on accessibility and bringing Ikea to more people. This involves flexibility in store formats, so that Ikea can open shops in more locations. It is an effective growth lever as it sharply increases customer numbers,” Saunders said in an email to Revenue Brew.

On the e-commerce front, Saunders mentioned that Ikea is behind brands like Wayfair, Amazon, and Walmart. However, given its strong branding and effective consumer experience, he thinks it can make up the ground.

“Ikea needs to be one of the leaders in online furnishings if it wants to win in the US. However, online and stores increasingly function together, so Ikea’s drive is to win in both channels,” Saunders wrote.