Introduction to Ikea’s New Strategy
For years, Ikea has relied on shoppers visiting its stores to sell furniture, but now, it’s hoping a smartphone will drive sales. The retailer is using augmented reality to let customers preview how furniture looks on their smartphones before they buy.
How Ikea Place Works
Customers use Ikea Place, one among the primary apps to make use of Apple’s ARKit tech, to put the corporate’s furniture wherever they envision it of their homes. In Ikea Place, customers can view 3-D renderings from different angles of over 2,000 products before reserving those they need within the app, which directs to the Ikea site to finish purchases. Currently, large furniture for living rooms akin to sofas, armchairs and storage units can be found to preview within the app, though more products are within the pipeline.
Benefits of Using Augmented Reality
Seeing lifelike versions of Ikea’s products in rooms lets shoppers make a “reliable buying” decision, said Michael Valdsgaard, leader of digital transformation at Inter Ikea, the holding company for Ikea. Ikea has struggled with e-commerce sales partially due to its slow adoption of digital. Allowing people to see what a product would appear like of their house without embarking on a three-hour Ikea trip could help the corporate with online sales.
Sales Projections and Goals
Valdsgaard described potential uplift in sales from AR as a “dream scenario” for Ikea, which is targeting €5 billion ($5.9 billion) in online sales by 2020, up from the €1.4 billion ($1.6 billion) it generated in 2016. The business has around 340 stores in 28 countries, with e-commerce services in 14 countries. “Most people postpone a purchase order of a brand new sofa because they’re not comfortable making the choice in the event that they aren’t sure the colour goes to match [the rest of the room] or it suits the style,” he said.
Launch and Feedback
The app launched within the U.S. on Sept. 19, coinciding with Apple’s iOS 11 update, and is rolling out to other markets over the approaching weeks. Valdsgaard declined to disclose how over and over Ikea Place has been downloaded but said the response has been “positive,” noting that individuals are sharing how they’re using it online. Early feedback on social media for Ikea Place inspired its developers to introduce a search feature for people to seek out specific products, which they built and launched in five days.
Future Updates and Development
Better search, more furniture and the flexibility to purchase directly from the app could all be added to future updates. For now, the retailer is concentrated on driving downloads on Apple devices since the Google AR developer kits usually are not ready for what it desires to do. Development is being handled by Ikea’s Copenhagen, Denmark-based innovation unit Space10 and AR agency Twnkls. Ikea Place can also be working with agency 72andSunny to construct a long-term proposition for the app and AR.
Conclusion
Ikea’s use of augmented reality is a big step towards improving its e-commerce sales and providing customers with a more immersive shopping experience. With its goal of €5 billion in online sales by 2020, the corporate is hoping that Ikea Place will play a significant role in achieving this goal. As the app continues to evolve and improve, it is going to be interesting to see the way it impacts Ikea’s sales and customer engagement.
