How IKEA has Committed to Global Digital Transformation

IKEA is a company that has always been forward-thinking, so it’s no surprise that the company is harnessing disruptive technology to boost its progress.

First beginning as a small mail order company in Sweden, IKEA quickly launched into a global powerhouse, known predominantly for its affordable flat-pack furniture. The organisation now attracts roughly 700 million customer visits every year, meaning its wide variety of products are in millions of homes around the world.

In order to keep this large number of customers happy and continually engaged, the company has some exciting strategies that harness modern technology. These systems stand to bolster their internal operations and improve overall customer experience.

AI optimisation: Creating a better everyday 

In recent years, IKEA has turned to cutting-edge technologies like AI and drone technology. These stand to reshape IKEA’s logistical processes as the company aims to keep setting new standards across the retail industry.

The company first introduced autonomous drones in 2021 predominantly for inventory management. These drones were developed in collaboration with drone provider Verity and, as of 2023, more than 100 are used by IKEA to count inventory across 16 European locations.

Representing a pioneering effort in retail logistics, the company is eager to continue using drones to monitor warehouse inventory. For instance, across its supply chain operations, the company is optimising the space used in its fleets of delivery and supply vehicles, in addition to using drones to monitor warehouse inventory across some of its European stores.

By leveraging a sophisticated supply chain, IKEA manages a vast array of products, balancing high quality with cost-effectiveness. The global furniture market, projected to be worth approximately US$800bn in 2024, highlights the scale of IKEA’s operations.

More growth is expected in the near future, with the company’s global reach supported by its regional manufacturing hubs and willingness to adapt within a continually changing market.

The integration of AI and drone technology into IKEA's operations is also part of a wider goal to transform its stores into centres for omnichannel retailing. This approach aims to integrate online and offline shopping experiences, whilst ensuring that customers have access to accurate stock information regardless of their shopping location.

Speaking at the time, Peter Ac, Head of Innovations in Supply Chain Development at Inter Ikea Group, said: “Being at the forefront when it comes to innovative and value-adding solutions is part of the Ikea heritage. We are always curious to learn from others and this project is a great example of how we have collaborated across Ikea and, together with an external partner, have come up with a solution that we all benefit from.”

Keeping a customer-led focus

Technology is also being harnessed by IKEA to enhance overall customer experience. Specifically, at the start of 2024, the company debuted its generative AI (Gen AI) shopping assistant, much like a chatbot, where consumers can ask questions about IKEA’s catalogue and product availability at specific stores.

The tool can also provide direct links to checkout with the item via the IKEA website, making the shopping experience more seamless for the customer. 

With more businesses utilising AI to create these experiences, particularly within retail, IKEA’s approach remains steadfast in supporting customer journeys.

“We are taking a pragmatic, execution-focused approach, learning by doing and capitalising on our early efforts of a Responsible AI framework,” Francesco Marzoni, Chief Data and Analytics Officer at Ikea Retail, highlighted in a statement at the time.

“We activated a broad ecosystem of partners to bring to life several experiments, so that we can take part in the AI evolution as we shape our company strategy.”

This commitment to digital transformation is not only enhancing IKEA’s operational efficiencies worldwide, but also making tasks like inventory management and customer service more straightforward. 

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