IKEA focuses on stronger omnichannel play, local sourcing in COVID era

What the world has gone through during last few months was completely unprecedented. As a purpose-led company, during this time IKEA focused on safety and security of their people, building digital capabilities, meeting customers in new ways as the home became the center of everything in everybody’s lives.
Click-and-collect, contactless shopping service, along with other online home furnishing services like remote planning, consultancy etc. were launched. The brand also launched New Lower Price and IKEA Family Credit Card by Citi, to make home furnishing solutions accessible to many more people. Their e-commerce sales grew significantly (3x-4x) and so did sales of some of product categories like work from home (3x-5x), living room, children furniture and kitchen products.
“We are proud of our journey so far and we are growing in India. Along with Retail, IKEA Purchasing, IKEA Foundation, and other group entities investing in India will together create an even more positive impact as ONE IKEA. Our ambition is to reach 100 million people in India by 2022. We will establish a strong omni channel presence in Hyderabad, Mumbai, Bengaluru and Delhi/NCR. It will be through a combination of big IKEA stores, smaller city-center stores, and online platform as a selling channel,” says Kavitha Rao, Country Commercial Manager at IKEA India.
“Our Hyderabad store has completed two years in India. We are today online in Mumbai, Pune and Hyderabad. Our Navi Mumbai store will open in the coming months and two smaller stores will also open in Mumbai during 2021.” she further adds.
As part of Ingka Centers’ global expansion strategy, the brand is interested in developing IKEA-anchored meeting places in India.
“We are very committed to making our products last longer, as well as extend the lifetime of our products through various options. We are working on a range of services in second-hand stores space that we will introduce in India over time. This is aligned to our focus on sustainability. At this point, we do not plan to launch a second-hand store in India,” says Rao.
Ensuring a Safe Shopping Environment
IKEA remains invested and committed to India and stands by the vision to create a better everyday life for the many people. As the world fights the pandemic, safety and security of coworkers and customers have been of highest priority for the brand.
“We have been alert, and agile, listening to the development in the society, government and follow the guidelines in a responsible manner. We have supported vulnerable communities in need. Now that we have reopened business, IKEA has put in place the strictest safety measures to enable safe shopping and a safe workplace. At the store we are following all safety guidelines necessary to ensure safe shopping. Customers can even avail personal shopper services, to easily navigate the store and shop quickly,” states Rao.
Online shopping is growing significantly in the industry. We launched click-and-collect, safe and contact-less shopping where customers can order and pay online and collect their favorite products from our parking lot in Hyderabad. We have introduced online consultations/planning services for kitchen, office furniture, wardrobe etc. to support customers in the most contactless manner in these times,” she adds.
IKEA has clear communication in all the channels to customers as many are depending on online product descriptions, customer testimonials, quality standards, usability, etc. to make a purchase decision. As many potential customers are first time digital users, the brand wants to support them in their online journey.
“We have IKEA buying guides that customers can download and use. Health and safety of customers and co-workers continue to remain our priority. We will continue to build our digital capabilities while maintaining all safety measures for co- workers and customers both,” she says.
Strengthening the Omnichannel Play
IKEA’s aim is to reach 100 million people in India by 2022.
“We will establish a strong omnichannel presence in Hyderabad, Mumbai, Bengaluru and Delhi/ NCR and are also exploring other opportunities in India. It will be through a combination of big IKEA stores, smaller city-center stores, and online platform as a selling channel. Our Hyderabad store has completed two years in India. We are today online in Mumbai, Pune, and Hyderabad. Our Navi Mumbai store will open in the coming months and two smaller stores will also open in Mumbai during 2021,” she asserts.
“During the crisis and moving forward, online business will play a very important role. Consumers have taken on to digital in a big way and are shopping online across a wide range of categories. In order to support our consumers in their journeys online, we have improved our web pages and additional search and navigation features, including product recommendations. To support customers that are not digital natives, we have offered online personal shopper services. In addition, for customers wanting to plan wardrobes or kitchens or living rooms, we have launched human remote planning services as well. In addition, we offered click-and-collect contactless shopping as another affordable option for last mile deliveries. In recent times, we have also revamped our self-planning tools online to make them user friendly for customers to try their hand at planning their homes. We will continue to launch a slew of new features and functions on the web to make the online shopping experience even more inspiring and convenient,” she adds.
At the same time, the physical meeting places of the brand will remain essential hub for home furnishing inspiration, feel, touch, try the range, fun day out, even though in a different manner due to COVID. It is not going to be one or other. It is altogether.
“Additionally, we are constantly working on keeping our prices lower without compromising on quality, so many people can access home furnishing solution through initiatives such as New Lower Price & IKEA Family Credit Card by Citi,”’ she adds.
Local Sourcing
IKEA has been sourcing from India for close to 35 years, working with around 60 suppliers and 400,000 people in the supply chain. It is also working with social entrepreneurs and engaging close to 1,200 local artisans who are making special collections for the global stores.
“Recently, we launched, two Made in India, festive ranges this year. LJUV is a festive range for which IKEA collaborated with Lebanese designer Nada Debs. Second is the Festive Collection, which is an elegant mix of two distinct collections named FINSLIPAD and KNASTRIGT,” says Rao.
“In our business in IKEA in India, we have been steadily increasing our local sourcing footprint and have achieved close to 20 percent local sourcing within the first two years of store operations. Our ambition is to increase sourcing from India in our aim to make a positive impact on the economy and society not just in retail but also in all allied sectors and services. It will not only enable lower prices for our customers but will also help create more jobs, enhance skills, keeping costs low while reducing the environmental impact.,’ she further adds.
IKEA is working with new categories like furniture, mattress, sofas etc besides building textiles category which is traditionally strong in India.
“However, to back our ambitions and plans, we need the collaboration of different stakeholders to create the right preconditions to build up local eco-system and the manufacturing sector in India. We are in ongoing dialogue with the government and other industry players to work together on building the furniture sector together, sharing global best practices, working on availability of certified raw materials such as wood and exploring to source sustainable raw materials like bamboo,” she states.
Global Operations in India
Along with Retail, IKEA Purchasing, IKEA Foundation, and other group entities investing in India will together create an even more positive impact as ONE IKEA.
“Recently, on the back of India’s strong business capabilities and excellent talent pool, we announced a new Global business office within Global Business Operations, Digital, and Centres of Expertise. This will help streamline, simplify, and standardise ways of working and operations, while diversifying the overall digital footprint. The availability of a large talent pool in India is one of the key reasons behind selecting the global office,” concludes Rao.