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Ikea on how Google Cloud has helped it cope with Covid-induced shifts in customer demand

Ikea Retail CDO Barbara Martin Coppola tells us how cloud technologies have helped the company adapt to the rapid changes in consumer behaviour brought about by the pandemic

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The pandemic has caused huge, persistent shifts in consumer behaviour, as government lockdowns across the globe have forced shops, schools, offices and entertainment venues to close, and left people largely confined to their own homes.

As a result, people’s homes are now having to double up as workspaces, as well as places where they can comfortably spend their leisure time.

Being able to rapidly respond to these trends is a challenge the technology team at Swedish home furnishing giant Ikea Retail found itself having to rise to at the start of the pandemic, as detailed by the firm’s chief digital officer, Barbara Martin Coppola.

“This [situation] has significantly changed the way we think about our homes,” she said during a fireside chat with Eva Fors, managing director of Google Cloud Nordics, during the five-week Europe, Middle East and Africa (EMEA) version of its Google Cloud Next OnAir virtual user conference. “This is an incredible opportunity for Ikea as a home furnishing retailer. We have been going with our customers in this journey, adapting to their needs and fulfilling what they’re asking of us.” 

To this point, the company has had to adapt to accommodate the shift in consumer preference towards online ordering and click and collect, as lockdowns in the countries where it operates have resulted in temporary store closures.

The closed stores were repurposed as fulfilment centres during this time, and equipped with contactless click and collect facilities so customers could pick up their orders in a Covid-secure way.

“Imagine having orders through ecommerce that correspond to a Black Friday every single day,” she said. “We have more than double the [ecommerce] volume in a very short time.”

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Responding to these unprecedented and prolonged peaks in demand would not have been possible, she said, had the firm not started laying the groundwork for its own digital transformation efforts several years ago, with the help of the Google Cloud team.

“[Responding to that] comes with a very deep transformation in technology, [with] product ways of working, data centricity, and artificial intelligence to augment us. And all of that has been ongoing for the last three years and a half,” she said.

Indeed, the company makes use of Google Cloud’s augmented realty offerings so that people can take pictures of the rooms in their houses they want to furnish and virtually place Ikea products in them to see how they would fit in that space.

The cloud giant’s artificial intelligence (AI) and machine learning technologies are also being used to serve up product recommendations to customers based on the items they may have already indicated a preference for.

Using cloud to conquer soaring customer demand

The company has also made extensive use of the Google Cloud infrastructure during this time, to cope with spikes in user traffic to its websites, but still found itself having to accelerate its digital transformation plans as the pandemic has continued to play out.

“We have seen the whole company come together to deliver in a matter of days, what would have taken a lot longer. Months, sometimes before Covid,” said Martin Coppola.

“This time, with Covid, we could actually face this incredible peak of demands, and we were a lot more ready than we were previously, and so the transformation continues – [and] we have a hell of a lot to achieve.”

Through its use of cloud, the company’s technology team can concentrate on incorporating the principles of augmented reality and AI into initiatives designed to enhance the customer shopping experience, rather than having to spend so much time tending to the needs of its underlying IT infrastructure.

“Thanks to cloud, we’re able to have a real data analytics and AI revolution,” she said. “This is only possible through cloud [because it’s] just not possible, capacity and computing-wise [with on-premise]. That has been a very important evolution into starting to embed algorithms across everything we do.”

“We are far from done, but already we see the incredible benefits and exponential improvements that you get through AI and machine learning, and having [access to] data analytics.

“I am beyond grateful that we can use cloud for our transformation as it accelerates the time to market.”

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