IKEA is famous for many things - from the unique layout of its stores, to its flat pack furniture, and not to mention its Swedish meatballs. The company has always had a strong focus on delivering a unique customer experience for buyers that are looking for affordable, but beautiful designed home furniture.
The company started back in 1943 with its founder selling simple home goods such as wallets and pens at the age of 17, but has since grown to become an international brand, with over 400 stores worldwide, and bringing in revenues over $48 billion annually.
This week it was revealed that IKEA is working with Google Cloud to capitalise on the opportunities that the retailer sees in creating new, unique digital experiences for customers that are investing more in their home surroundings since the onset of the COVID-19 pandemic.
IKEA has deployed a number of cloud services to help it respond to the pandemic and create a "more affordable, accessible and sustainable future". Some examples of this include:
Transforming its data analytics capabilities by embedding AI and ML across all business areas to better understand customer needs
Launching and scaling new omnichannel functions as it sets up contactless Click & Collect services - having to manage large volumes of web traffic and online orders
Developing new customer service solutions, such as ‘design your dream home' tools, using mixed reality
Barbara Martin Coppola, IKEA's Chief Digital Officer, spoke with Google Cloud recently about the retailer's experience during COVID-19 and how it's making use of Google's enterprise cloud solutions. Coppola also spoke about the priorities companies should focus on when thinking about new digital capabilities, as well as the importance of diversity agendas in the enterprise.
Coppola highlighted that whilst COVID-19 has been a very difficult time for many, the pandemic has also created opportunities for certain sections of the economy and certain kinds of retailers - including IKEA. She said:
This time has been an incredible change for many people in their everyday life around the world. We have been working from home. We have been giving education to our kids through digital tools at home. This has significantly changed the way that we think about our homes. This is an incredible opportunity for IKEA as a home furnishing retailer. We have been going with our customers on this journey, adapting to their needs and fulfilling what they're asking us.
I'll give you a couple of examples. We are seeing that our customers are shopping differently right now. For instance, we see that they really like remote design and planning of spaces such as a kitchen or living room. We have also seen that they shop online and go to the store to collect, and we have been thinking about and providing contactless ways of doing that.
We have seen an incredible surge of home storage, working spaces at home, as well as children and learning spaces. It's been remarkable the changes in very little time, but also an incredible opportunity to continue evolving and fulfilling the needs of everyone around the globe.
Thankfully, IKEA had already invested in new digital capabilities and change across the organisation in the years prior to COVID-19 hitting, which left it better placed to take advantage of huge peaks in demand for its products and services Coppola added that investing in the cloud and in Google gave it the ability to not only scale as required, but also gain new insights into where it should pivot. She said:
We have come a very, very long way in our digital transformation. This transformation has been accelerated through COVID times. We have seen that the whole company has come together to deliver in a matter of days what would have taken a lot longer - months in some cases, before COVID.
As a bit of a visualisation, imagine having orders through e-commerce that correspond to a Black Friday, every single day. Imagine that. We have more than doubled the volume for our e-commerce at IKEA in a very short amount of time. That as you know comes with a very deep transformation in technology, product ways of working, data centricity, artificial intelligence to augment us - all of that has been ongoing for the last two and a half years.
Coppola said that IKEA views ‘digital transformation' through the lens of being a "journey of creation". In other words, considering the art of the possible with regards to how it can create new experiences and services for consumers around the world - pairing the future needs of consumers with technology.
Commenting specifically on the partnership between Google Cloud and IKEA, Coppola added:
It's been absolutely essential to the acceleration of the transformation and digitalisation of it all. We have been able to concentrate our efforts on creating new experiences for our customers, our coworkers without having to be on difficult infrastructure or understanding and predicting how much capacity we would need.
We were able to really go with what we needed to do, launch it fast and then scale it up and down depending on the results we were taking. Also, thanks to cloud, we were able to do a real data analytics revolution. This is only possible through cloud - before with on-premise it was just not possible capacity wise, computing wise. And so that has been a very important revolution in starting to embed algorithms across everything we do.
IKEA is far from ‘done' on its use of data analytics, Coppola said. However, the retailer is already seeing exponential benefits through its use of AI and machine learning, she added, given that it accelerates the "time to market and value creation".
Where to prioritise
Whilst IKEA isn't saying that it has got everything figured out yet, Coppola was adamant about some core pillars that underpin the retailer's digital focus. And very few of these have anything to do with technology itself. She said:
I would share a couple of thoughts. The first thing is that it's all about people. The starting point sometimes is technology or having the right systems - it is not. It's actually about mindsets, people, having the right energy, the right motivation and the right skills to be able to create a whole new company or a whole new way of thinking.
The second thing is that digital is embedded into everything that we do. So not to reduce the area of technology to a few things, but to really see it as a horizontal thing. Digital is also a mindset that comes with speed, data centricity and accountability - but also the freedom to create new experiences.
When tackling a transformation, one can think "oh my god we are catching up". Or one can think "oh my god, we are creating, we can leapfrog and create competitive advantage in the future". And of course, you need a lot of stamina and a lot of resilience.
Diversity as a necessity
Finally, Coppola was keen to discuss the need for diversity in organisations that want to succeed and reflect the needs of the societies that we live in. She said that this started when she entered engineering school and recognised that women made up just 10% of the student body and graduating class - and then entering the workplace, noticing that women again were a minority and that opportunities for women got fewer and fewer as she climbed the corporate ladder. Coppola said:
It feels a bit lonely sometimes. So I am a big, big pusher for diversity. [Diversity] brings diversity of thought, it brings innovation. IKEA has 50% of the total managerial positions globally being women. Diversity has been a core part of the overall strategy for many, many years. I have witnessed now, I have seen, everything that you hear, all of the claims, translates into reality in terms of innovation, the bottom line, and coming to work as you are.
Diversity is something that is non-negotiable. It's a human right. I think companies need to mirror the societies they are in for their own good. Those different perspectives end up adding to each other and end up creating value.
In addition to the enterprise diversity agenda, Coppola is also worried about the digital divide - which is described as the uneven distribution in the access to, use of, or impact of information and communications technologies between any number of distinct groups, which can be defined based on social, geographical, or geopolitical criteria, or otherwises. She said:
It's a challenge for all of us and societies at large. I believe that we have a duty to make more people join the skills and digital knowledge that are very important and required for many jobs of the future. I think the risk that if we don't do that is that we leave many, many people behind.
It's a journey of reskilling, a journey of education, but also participating in societies as part of the curriculum and starting small at school - we actually embed for the type learning that is needed for the day of tomorrow. And as a society we are responsible for all our people so that diversity is a reality in the years ahead.