Covid-19: Ikea’s plans for long-term shift to digital

The accelerated shift to online shopping throughout the Covid-19 lockdown has been well publicised, and it is be becoming increasingly apparent that this trend will continue permanently. This phenomenon has unsurprisingly impacted furniture retailer Ikea, in spite of its vast store network. “We have seen an incredible uptake of eCommerce globally overall for Ikea, especially as the shops were closed in many countries. Now the shops are reopening, the level of eCommerce has actually sustained so it seems as though there is a permanent shift towards online and its convenience,” notes Ikea’s chief digital officer Barbara Martin Coppola, speaking during the recent Collision Web Summit.

eCommerce expansion

As with many retailers, Ikea has therefore had to rapidly expand digital capabilities to meet this surge in online shopping. Coppola reveals that Ikea has taken advantage of its stores in order to quickly ramp-up its delivery and pick-up capacity. With Ikea stores a maximum of one-hour drive away from 90% of people it serves, many of these premises have proven to be ideal fulfilment centres. Coppola adds that “in the majority of cases it’s been an incredible success bringing goods to people and allowing them to pick it up”. She confirms those stores currently acting as fulfilment centres will continue performing this function beyond the crisis.

Developing in-store experiences online

With increasing numbers of consumers becoming more accustomed to online shopping, viewing it as safer and more convenient than entering physical outlets, Ikea is working on enhancing the online shopping experience customers can access. Clearly when it comes to products like furniture and appliances, it is vital for customers to be able to properly visualise items before making purchasing decisions. And technological advances, including in AI and augmented reality, are providing an avenue for these types of in-store experiences to be offered to customers from the comfort of their homes.

This phenomenon has become increasingly important in the fashion sector over recent times. For example, the Superpersonal app has been utilised by brands; this captures the customer's face and marries it to a body with similar physical proportions, enabling clothes to be tried on virtually. And amid the Covid-19 lockdown, Asos has used AR technology to place clothes on its models, negating the need for them to enter their studios.

Coppola reveals that Ikea is making plans to move into this space to meet the growing preference for online shopping; for instance, it is experimenting with 3D home design for customers online. She says: “You take a picture of your interior, and we will be able to swap with different furniture that you choose in order to visualise how it will fit.”

These kinds of initiatives underline the importance of expanding the online shopping experience far beyond just ordering items in light of the shift away from physical stores. “eCommerce has been developing incredibly fast, and that has demanded operational excellence and focus to improve the experience that we offer to our consumers,” adds Coppola.

Changing the in-store model

Although diminished to some extent, it is still hard to believe physical stores won’t remain a vital component of Ikea’s business model going forward. Many customers will undoubtedly remain keen to visualise its range of furniture offerings in person as well as receive the unique family experiences of an Ikea store, including eating out. Coppola also notes that its stores provide opportunities for human connection – very important for many customers facing loneliness and isolation, which is an issue that was prevalent even prior to Covid-19. “We are testing and rethinking the role of the store as a community builder, bringing people together,” she comments.

Coppola hints that Ikea stores may operate differently going forward, however, tapping into a greater sense of social responsibility and community spirit that has emerged during the crisis. She adds: “There are some forevers in the Ikea experience. You want to keep them because they are part of your identity, part of what people enjoy and come when they want to experience Ikea. But imagine a world where the shop is completely sustainable and shows how we can influence the planet in a positive way that involves people, helping them be citizens for the good of the planet.”

Data privacy

Coppola also discusses privacy and safety in regard to customer data, issues that are being exacerbated by the rise of digital shopping. Ikea is working on ensuring the personal preferences of customers are acted upon regarding information that is shared and retained by the brand, developing algorithms that update themselves instantaneously based on these choices. She explains: “We are in dialogue with consumers and they decide what level of sharing data they want to have with us. We need to respect that, so when someone after purchase does not want us to keep the purchase information like the credit card or else, then we need to be able to delete that automatically from our systems.”

Emerging from the crisis

Ikea has been forced to adapt its approach to adequately respond to changing customer behaviours during Covid-19. This change is clearly here to stay, and Ikea are making plans to develop its digital offerings long-term, including enabling customers to design their homes virtually and protect personal data more efficiently. These kinds of initiatives illustrate how the Covid-19 crisis has led to greater levels of innovation and use of technology in the retail sector – a clear indicator of how retailers can survive and thrive as we emerge from the crisis.