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IRUK Top500 The Customer Report: 2018

IRUK Top500 The Customer Report: 2018

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IKEA Chief Digital Officer: Our stores are a “competitive advantage” for fulfilment

IKEA's chief digital officer Barbara Martin Coppola, who started her role in April 2018
IKEA's chief digital officer Barbara Martin Coppola, who started her role in April 2018

Swedish retailer IKEA’s physical stores are well known, with the experience honed to the extent that many people consider going to one a day out.

 

However, recently the company has been expanding its investment in digital, rolling out ecommerce to more of its markets.

 

So what is the future of the company’s stores? Barbara Martin Coppola, chief digital officer for the IKEA Group, tells InternetRetailing that IKEA will continue to open new stores, but we should expect these to play a wider range of roles in the future.

 

“We want to make it easier for our existing and new customers to access IKEA when and how they want," says Martin Coppola, who moved into her position earlier this year. "By combining the physical with the digital we will be able to create a more convenient and unique experiences for our customers."

 

The commitment to physical stores makes sense at at time when the majority of household goods shopping is still done offline - to take the example of the UK, ONS figures for August showed that only 13.1% of sales in the sector took place online compared to 18.2% for all sectors.

 

One of these new roles is as part of the company’s fulfilment network. While the company is a consistent entrant in RetailX’s IREU index of top online retailers due to its strong showing in areas such as customer experience and innovation, the one area where IKEA is not amongst the elite is in operations and logistics.

 

According to Martin Coppola, there are major plans to change this.

 

“A big focus point is to improve the overall quality in the meeting with our customer, but also the improvement of our lead time,” she says.

 

This will be partially achieved through making use of the store network, which Martin Coppola names as “a great opportunity and a competitive advantage”.

 

She says in future the stores, usually located in the outskirts of urban areas, will allow it to offer same or next day delivery of big furniture items, particularly in major cities.

 

Other areas of investment include developing new system capabilities to orchestrate orders across the network, as well as automating handling, storage and picking activities. The company is currently exploring different solutions for the latter.

 

Another recent addition to IKEA’s physical presence is the smaller order and collect store, already available in Aberdeen, Norwich and Westfield Stratford in the UK. Notably, these locations don’t allow customers to collect online orders.

 

Martin Coppola cites two major uses of the locations: allowing customers to engage with IKEA staff and to experience products. They also serve as a closer touch point for customers than the large-format stores, which are usually located out of town.

 

While IKEA’s attentions are currently focused on physical retail, former pure players are also taking notice of the household goods sector. What does Martin Coppola make of the entry of the likes of Amazon into the furniture space?

 

“Of course we look at what other companies like Amazon do, but we find it even more important to look at what our customer’s needs and dreams are.”

 

She claims her company has the in-house expertise to meet these customer needs, including “knowledge about life at home and a great culture of entrepreneurship and creativity. There is a lot of energy to dream and build the future.”

 

Martin Coppola’s comments come at a busy time for the retailer. Earlier this month, IKEA announced it would invest €5.8bn in shopping centres over three years, with each centre combining an IKEA store with other retail outlets and leisure and entertainment areas. Last week saw IKEA announce that it would create 11500 jobs over two years but that it could at the same time axe 7500 roles, mainly in global functions and offices.

 

In terms of specific upcoming ecommerce projects she is excited about, Martin Coppola says the company will soon offer ecommerce in all of its countries, as well as redesign its web presence and its apps.

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