We secured high growth for ecommerce which went from 7% of revenue to 31% in 3 years.
Our first focus was on revamping all meetings with the customer, especially online with new and improved navigation and search function. The scope of the strategy has increased significantly over time as the company realized that digital needs to be embedded into everything we do.
How has your strategy changed as you moved through this process? What did you think it was going to be like at the beginning, and what has surprised you and what has changed along the way? These transformations are happening at many layers within the company, and they require a multi-year strategy and a clear North Star to follow. The result is meant to be a seamless, consistent customer experience.
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It requires reengineering of the full value chain, which needs to be governed by data and become more flexible than before. It also requires a different way of operating to fulfill the goods to be bought. That requires a complete modernization and reengineering of all the tech landscape within IKEA. Another example is the “Shop & Go” feature in the IKEA app - available in a few countries - which allows you to use your own mobile device to scan, pay for items and skip the checkout line in the store. For instance, you might start planning your new kitchen by yourself at home on, and then you come to the store or connect with a remote customer meeting point, and we should be able to meet you where you are. We are revamping customer interactions both digitally and, in the store, and we’re connecting them. And what is under the surface is a much bigger change than what we see above. At the top of the iceberg, we have the customer needs and adaptation - revamping everything around customer interaction and new purchasing journeys - and under the surface we are making huge changes to our business and operating model. Now, this process is a bit like an iceberg. To realize our mission, we need to stay relevant, and we need to evolve with the ever-changing needs of our customers. How would you describe what it is you’re trying to do through this process? Digital is a way of working, making decisions, and managing the company. And in order to be successful, digital needs to be embedded in every aspect of IKEA. We are transforming our business: We are exploring potential new offers to customers, new ways to bring our offers to customers, and new ways to operate our business. The digital transformation is not a goal in and of itself, and it is so much more than technology. With the pandemic and with the closure of approximately 75% of our stores, we ramped-up and accelerated even more as people turned online and towards digital solutions. Things that would normally take years or months were carried out within days and weeks. We’re rapidly expanding data and analytics and changing how they’re embedded in decision making. Goods can be delivered from the stores, or from different distribution centers - and algorithms are helping figure out where the goods are being sourced from.
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Ecommerce is open 24 hours a day, while traditional stores are not, which means we’ve needed to learn how to operate at two speeds, while operating from one space. To make that work, the flow of goods needed to change, the supply mechanisms needed to change, and also the floorplans of the store needed to change.
We have transformed our stores to also act as fulfilment centers. In practical terms, we’ve approximately tripled ecommerce levels in three years. How is the digital transformation at IKEA changing how the company actually operates in the day-to-day? HBR spoke with Martin Coppola about the particular challenge of transformation at a legacy company, how to sustain your culture when you’re changing almost everything, and how her 20 years in the tech industry prepared her for this task. Three years ago, IKEA Retail (Ingka Group) hired Barbara Martin Coppola - a veteran of Google, Samsung, and Texas Instruments - to guide the company through a digital transformation and help it enter the next era of its history. What does it mean for one of the world’s most recognizable retail brands to go digital? For almost 80 years, IKEA has been in the very analogue business of selling its distinct brand of home goods to people.
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