>> IKEA thinks shoppers want less of this and more of this. The Swedish giant investing in smaller stores in city centers. It thinks millennial shoppers aren't keen on making the trek to out of town mega stores. They want local or online shops instead. But the shift is costing the company dear.
Profits down by just over a quarter for the year. Reuters' Anna Ringstrom is in Stockholm.>> IKEA has for more than 70 years grown very successfully on a concept to have shoppers do half the job themselves. But now with a very rapidly changing retail landscape, this model is just becoming less attractive to shoppers.
>> IKEA is still by far the largest furniture retailer in the world, but Amazon is muscling in with its own furniture brands. It’s also a global platform for countless small players. Then there are fast growing online only rivals like made.com and Wayfair. IKEA had long resisted web shopping.
>> Well, IKEA has not been very fast to start with an online and on digital services, but they have been catching up very quickly in recent years. Rolling out online stores across their markets and investing heavily in digital services or digitally based services such as virtual reality apps.
>> The investment is paying off. IKEA says online sales were up by a half over the year. Shifting to online and smaller stores doesn't come cheap though. The company forced to invest about $3 billion over the same period. But IKEA is betting it's now got millennial shoppers all figured out.