Ikea’s biggest challenge: to marry the digital with the physical
No company is taking the step in the age of digitalisation. In Sweden alone, Ikea has 20 department stores, a turnover of SEK 16.8 billion and approximately 8,000 employees.
– We have doubled the turnover in the group every ten years, and we hope and believe in continued growth, but then we must cope with this journey of change we are on. As it is now 70 percent of sales in department stores and where customers take the goods home, 30 percent is delivered directly to the customer. In ten years, we believe the figure is the reverse.
This is what the Sweden manager for the Ikea Group, Håkan Svedman, says during Ikea’s forward-looking seminar in Stockholm, which went by the name “The digital folk home”.
Digitization naturally plays a key role in Ikea being able to achieve these goals, but it is not just about e-commerce, but also about services, digital solutions in physical commerce and in logistics.
In terms of e-commerce, it increased by 14 percent last year and 20 percent the year before. It is thus the part within Ikea that is growing the most. But Peter Nilsson, who is customer experience manager at Ikea, says that the boundaries between what is digital and physical commerce are blurred.
– Whether it is physical or digital is not the most important thing, but that it works together, and that we are where people are.
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-For example, 65-70 percent of those who apply to our stores have prepared online. We have 136 million visitors in different channels every year: Department stores, digital channels, telephone and chat, and we must be able to have a seamless service in this network.
Peter Nilsson says that digitalisation thus provides more entrances to Ikea. The mobile becomes more central: Of the 90 million digital visits they have each year, the size is through the mobile.
-Thus, you do not see Ikea from a “King’s Curve-50,000-square-meter perspective”, but through its smartphone. It places demands on how to develop the business with a mobile thinking first.
– Such a component is what we do with the app Ikea Place, where the user through AR (augmented reality) can “insert” Ikea furniture in their home to see what it looks like or that through virtual reality you can look at the kitchen before you buy the.
Further investments in digitization have been made through, for example, the new e-commerce warehouse in Stockholm, and they have launched an “order-pick-up” service, where customers can order online and pick up the product in a department store.
– It is also about how we can use the technology development in the digital home, with furniture that becomes a charger for devices and our smart light bulbs.
Read more: Ikea is switching up its e-commerce with a new major investment
But digitalisation is spreading throughout Ikea’s operations. For example, they have bought Taskrabbit, a start-up that can be described as a digital employment agency for short and simple jobs – such as assembling Ikea furniture. Express deliveries are another factor that will become more important in the future.
What role does the IT department play in this whole digitalisation with AR apps, smart light bulbs and new digital services?
-This is where we have the heavy IT skills gathered like that. Previously, it was a backend function, but it is becoming more agile and they are playing an increasingly important role in other businesses as well – such as supporting development in, for example, AR and VR.