Introduction
IKEA is a global furniture and household retailer and is one of the world’s biggest furniture retailers. The Sweden Headquartered company designs, manufactures, and sells; kitchen appliances, ready-to-assemble furniture, and several other home appliances. The company is known for its operational details, attention to control, and continuous development. In this paper, we will evaluate the retail strategies changes IKEA UK has adopted to reduce the spread of Covid-19 and propose two recommendations that will improve the retail strategy when normalcy resumes in September 2022.
Changes in IKEA’s Retail Strategy in Response to Covid-19
IKEA’s retail response strategy can be analyzed using the Seven P’s of the marketing mix. The concept was originally used to create and analyze marketing campaigns and it contained four P’s representing place, product, promotion, and price. The three additional P’s stand for people, physical evidence, and process (Jain, 2013). The Covid-19 virus led to the restriction of movement due to the installation of lockdowns. Consumers were unable to physically access the shops due to the lockdowns and also because of fear of contracting the virus (Dance et al, 2021). IKEA aims to better the lives of people and thus invented several changes in its retail strategy to ensure that consumers would still enjoy its products at the convenience of their homes. To achieve this IKEA improved the process of advertising, ordering, paying, and receiving its goods and services in the following ways;
First, the IKEA online Store or IKEA App was developed. The platform enabled clients to view, order, and purchase products through the online App. The app was also used for advertising and other promotional purposes. The app enables consumers to purchase products of their choice without physically leaving their homes (IKEA, 2022). Consumers prefer online shopping using the app because; it saves effort and time, offers a comparison of various models, provides detailed information about the product, provides discounts and lower prices, and a wide variety of products can be accessed (Yang et al, 2010). Additionally, online shopping saves money, tracking and delivery of the product are possible, minimum pressure from sales representatives, and shopping can be done at any time of the day. The app is beneficial to IKEA because it does not face any space constraints that would result from the need to conform to the 2m minimum distance rule.
Second, the Click and Collect strategies. The platform enables consumers to order home furnishing accessories together with furniture and collect them at a physical store. The purchased products are collected from IKEA designated locations. Clients can have the choice of paying online or in cash when they collect their orders. To avoid congestion in the designated areas, each customer is allocated their own specific time to collect. This service is desirable to consumers because it saves time, it is convenient and fast, and consumers can avoid shipping fees (Jara et al. 2018). This service is beneficial to the retailer because it offers a chance for upselling and thus more income generation. Upselling occurs when clients are attracted to other products that they had not ordered when they come to collect their order. According to data from upselling research, 70% of consumers make impulse in-store purchases when they are collecting their orders (Guillet, 2020). Click and Collect strategies enable retailers to make more online sales because it is quicker to place an order at any time. Additionally, it helps in sales maximization through upselling and offers a competitive edge. The click and collect strategy offers a good combination of online and physical shopping. This offers flexibility to the firm to respond to recent consumer trends and work in the most efficient manner possible.
IKEA temporarily closed all its UK branches at the onset of the CoronaVirus outbreak. This was an important retail strategy because it seeks to protect the lives of the customers and workers. Despite the need to make money, a business needs to put the health of people as the top priority (Zolkiewski, 2011). The temporary closing did not mean shutting down all the mobile operations because purchases and deliveries would be made through the IKEA App. Consumers had the option to ask for free deliveries. IKEA opened the stores after they implemented measures that would assure that both workers and consumers feel secure and safe physically and mentally. Some of these measures include; increased sanitization and surface cleaning, mandatory temperature checks, easy accessibility to PPEs, and training on social distance. These measures increase the confidence of shoppers and workers to do their shopping at IKEA.
Recommendations on IKEA’s Retail Strategy
IKEA needs to improve the consumer’s shopping experience after the resumption of the normal shopping life through the use of artificial intelligence and blockchain technology. Artificial intelligence can play an important role in creating enjoyable, convenient, and personalized customer experiences. AI will enable clients to easily and quickly get the products they need, and also get help if they need it (Akerkar, 2019). This creates a satisfying consumer experience. AI enables consumers to check what is contained in their shopping cart without necessarily touching the cart which is enabled by computer vision. Additionally, digital signage can enable help in measuring client engagement and advertising. Thus, AI helps to a better understanding of consumers’ patterns and preferences which helps in designing accurate customer experiences and segmentation. AI helps in better understanding client behavior and trends which are crucial for merchandising and demand forecasting (Hanus, 2016). Pricing decisions, demand forecasting, and optimum product placement are improved through AI-driven demand forecasting. Accurate demand predictions will ensure that there are no excess products or shortages because consumers have the right goods, at the right time, at the right place. Artificial intelligence is crucial in maintaining an accurate inventory. Combining several parts of a retail operation and using AI can give retailers a detailed view of shoppers, stores, and products. Data can be collected and processed through cameras and sensors. The use of smart shelves powered by AI enables stores to quickly realize pricing errors and items that are running out of stock. Finally, real-time product loss can be mitigated through the use of AI-powered checkout systems.
IKEA should adopt an ethical and value-based brand. To accomplish this, the company must evaluate consumers’ ethical choices, and consider the impact of their retail operations on the environment, individuals, and society (Zolkiewski, 2011). Consumers develop loyalty to a brand if they are convinced that it becomes better and better. IKEA should invest in research and development to ensure that shoppers have better experiences each time. IKEA must also assure their clients that their products are of high quality and every detail of the products has been carefully crafted from sourcing of raw materials to manufacturing and finally in distribution. IKEA should understand the ethical standings of their clients by knowing what matters most to the clients (Joyner, 2002). IKEA can use this data to engage in projects that are in the interest and concern of their consumers. Most consumers are recently concerned about the health and environmental results of various products and services. IKEA must ensure that it leads environmental conservation campaigns because of the increasing global attention on climate change (Sussman, 2008). It can engage in planting forests and switching to wood alternatives in its manufacturing. The company must also ensure that its products promote the health condition of its consumers. Consumers are more aware of the importance of a healthy lifestyle like immune-boosting and detoxifying thus they will preferably purchase healthier products (Wagner et al, 2020). IKEA must stand up for global justice and peace by condemning conflicts in any part of the world and cutting ties with oppressive regimes. Additionally, the company can achieve liberty and equality by offering equal employment to people from different races and nations on earth. Condemning racist actions and remarks will also create a good image for the company and it will help it achieve aspects of retail ethics.
Conclusion
In today’s competitive business environment, firms must respond to their consumers’ needs like never before. Firms should therefore understand the external and internal business environments and how they can be improved to increase consumer experience. IKEA provides home furnishing products and solutions which are aimed at enhancing life at home. COVID-19 introduced a new work culture where most people work from home. This created a big opportunity for IKEA as a social infrastructure making critical items for life at home. IKEA developed an online app, click and collect platform and adopted COVID-19 curbing measures to ensure that consumers continued enjoying the wide range of products and were still kept safe from the virus. These developments and rules created an exciting and convenient shopping experience for shoppers. Additionally, these developments and measures were beneficial to IKEA because they continued operating during the pandemic and only closed their stores temporarily. As we look into the future, IKEA should leverage technologies like Artificial Intelligence to improve consumer experience and enable better decision-making for the company. The company should additionally work on a retail ethic that resonates with the consumers.
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