Ikea Food taking a more prominent seat at the table

In the world of continual retail evolution, it seems even Ikea’s meatballs are going through a period of digital transformation.

Well, perhaps not Ikea’s meatballs per se – although later this year, in Europe, the home furnishing retailer’s food division will bring to market plant-based meatballs that mimic the original meat variety. More accurately, the until-now-non-digitised part of the business, Ikea Food, is now implementing new technology that aims to bring operational efficiencies and boost sales.

JDA Software is building a tailored platform for the food business, which will enable it to ditch the paper-based goods receiving processes it currently uses, and centralise operations. Kitchen staff will be able to use it to access recipes, and the wider workforce of 20,000 will be able to tap into the system for ingredient look-ups and to find information about inventory.

Voice-enabled technology and scanners that all link-up to the central system will be introduced for the first time, while a forecasting and demand planning component will be plugged in and made accessible to store food managers and country headquarters.

Lars Gunnarsson, deputy managing director and supply chain manager for Ikea Food, tells Essential Retail: “The good and bad with not being so sophisticated [from a tech perspective] is that we don’t really have a big legacy to cater for.

“It’s not going to be integration to old – it’ll be a new, fresh infrastructure.”

He also suggests the food division will be in a strong position to take advantage of the artificial intelligence and machine learning capabilities of JDA and the JDA-owned Blue Yonder stack “from the get-go”.

Having new systems in place for dealing with food inventory should help the company reduce food waste, Gunnarsson adds.

Food forward

In addition to the forthcoming new plant-based ‘meatball’, product development includes a vegetarian hot dog and other menu items that will appeal to the growing number of consumers with specific dietary requirements or who want to eat more ethically or healthily.

New food ranges and smaller format stores in urban areas are all part of Ikea’s vision to attract a younger generation of shoppers – or stay relevant to an emerging consumer market. It means its food will be more heavily marketed in the coming months, as Ikea looks to use this part of its proposition to drive people to the wider home furnishings business.

“We are going to use food to spearhead our move to attract that new generation to come into Ikea,” Gunnarsson explains, although he acknowledges more needs to be done to make serving food more efficient for the business and the customer alike.

“From a consumer point of view, we need to strengthen ordering and delivering food in store. I’m not saying we’re building kiosks, but something similar – maybe our version of McDonald’s deliver-to-table service – it’s something we have to explore.”

Gunnarsson lists JDA, Microsoft, Infor, and Diebold Nixdorf as key retail technology suppliers for the food division – and, in 2017, Ikea bought logistics provider, Bring SCM, to take control of its food supply chain between source and delivery. Supported by these organisations and the in-house Ikea IT team, much change is afoot.