IKEA is committed to digital innovation

IKEA is a company that has always thought ahead, so it's no surprise that it uses cutting-edge technology to accelerate its growth.

From its humble beginnings as a mail-order company in Sweden, IKEA quickly grew into a global powerhouse, known primarily for its affordable flat-pack furniture. The organization currently attracts around 700 million customer visits each year, meaning its wide range of products are in millions of homes around the world.

To keep this large number of customers happy and constantly engaged, the company employs several exciting strategies that utilize modern technology. These systems are designed to enhance their internal operations and improve the overall customer experience.

AI Optimization: Creating a Better Day

In recent years, IKEA has turned to cutting-edge technologies such as artificial intelligence and drone technology to transform IKEA's logistics processes as the company seeks to continue setting new standards in retail.

The company first introduced autonomous drones in 2021, primarily for inventory management. These drones were developed in collaboration with drone supplier Verity, and as of 2023, more than 100 of them are used by IKEA to count stock in 16 European branches.

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

Using a complex supply chain, IKEA manages a wide range of products, balancing high quality with cost efficiency. The global furniture market, which is expected to be worth around US$800 billion in 2024, highlights the scale of IKEA’s operations.

Further growth is expected in the near future as the company's global reach is supported by its regional manufacturing hubs and willingness to adapt to the ever-changing market.

The integration of AI and drone technology into IKEA’s operations is also part of a broader goal to transform its stores into omnichannel retail hubs. This approach aims to integrate online and offline shopping experiences, while ensuring customers have access to accurate stock information no matter where they shop.

Speaking at the time, Peter Ak, head of supply chain innovation at Inter Ikea Group, said: “Being at the forefront when it comes to innovative and value-adding solutions is part of Ikea’s heritage. We are always curious to learn from others, and this project is a great example of how we have collaborated within Ikea and together with an external partner have come up with a solution that benefits us all”.

Read more materials on this topic in Compass CIO

Maintaining customer focus

IKEA is also using technology to improve the overall customer experience. In particular, in early 2024, the company introduced its Gen AI-powered shopping assistant, much like a chatbot, which allows consumers to ask questions about the IKEA catalog and the availability of products in specific stores.

The tool can also provide direct links to place an order through the IKEA website, making the shopping experience more convenient for the customer.

As more companies, especially in the retail industry, use AI to create similar experiences, IKEA's approach to supporting the customer experience remains unchanged.

“We are taking a pragmatic, execution-oriented approach, learning by doing and benefiting from our early efforts to implement a responsible AI framework”, Francesco Marzoni, chief data and analytics officer at Ikea Retail, said in a statement. “We have engaged a broad ecosystem of partners to implement several experiments so that we can participate in the development of AI while shaping our company strategy”.

The commitment to digital transformation not only improves IKEA's efficiency worldwide, but also simplifies tasks such as inventory management and customer service.