How IKEA Is Transforming With the Cloud

Jamie Grill-Goodman
Editor in Chief
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IKEA Retail (Ingka Group) has been able to accelerate its digital transformation in the face of COVID-19, while keeping an eye on the future. The retail tech is has to thank for this adaptability? Cloud services.

Online shopping has reached new heights and during lockdowns from the heath crisis earlier this year many IKEA stores catered to customers online only, which led to an acceleration of the retailer’s digital transformation.

“Imagine having orders through e-com that correspond to a Black Friday every single day,” Barbara Martin Coppola, chief digital officer at IKEA Retail explained in the above fireside discussion. “Imagine that. We have more than doubled the e-com value in a very short time.”

But IKEA was able to respond quickly to the change in shopping behavior.

“Things that would normally take years or months were accomplished within weeks and days,” Coppola further explained in a blog post.

IKEA has deployed a number of Google Cloud services to help it respond to the pandemic and create a more affordable, accessible and sustainable future.

It launched and scaled new omnichannel functions as it set up contactless Click & Collect services and managed the large volumes of web traffic and online orders, as well as developed next-gen customer service solutions such as its “design your dream home” demo using mixed reality.

“We transformed our current technology infrastructure, converted our closed stores into fulfilment centers and enabled contactless Click & Collect services whilst increasing the capacity to manage large web traffic volumes and online orders,” Coppola said in the post. “By using Google Cloud, among other key serverless technologies, we were able to instantly scale our business globally, on the web and in our stores.”

IKEA was also able to transform its data analytics capabilities, embedding AI/ML across all business areas to better understand customer needs.

“This is only possible with Cloud, before [it] was just not possible… That has been a very important revolution into starting to embed algorithms across everything we do,” she said in the above video. “We are far from done, but already we see the incredible benefits and exponential improvement that you get though AI/Machine learning and overall data/analytics.”

In addition, IKEA engineered a solution where staff could borrow equipment online for a home office environment set-up.

“We empowered employees with data and digital tools, automating routine tasks, building advanced algorithms to solve complex problems, placing more modern technology in stores and designing additional self-serve tools,” she said in the blog. “Through cloud technology we trained our data models to assist our co-workers, creating more efficient picking routes, which in turn enriched our customer experience.”

“We have been able to concentrate our efforts into creating new experiences for customers and co-workers without having to be on difficult infrastructure or understanding and predicting how much capacity we would need,” she explained above.

IKEA’s relationship with Google Cloud will allow it to further its transformation into the future.

Currently IKEA is working on better fulfilling customer needs using recommendations through AI, chatbots for customer service and 3D visualization design tools to picture furniture in photo realistic rooms.

“We want to show that IKEA can truly touch every customer around the globe with home furnishing products that provide an unforgettable everyday life at home experience,” she noted.