DIGITAL LANDSCAPE CHELSEA 8

December 10th, 2013

Table of Contents

•Introduction•Digital Challenges & Opportunities •Competitors•IKEA’s Business Strategy•Multi-Channel v.s. Omni-Channel

• IKEA Catalog• IKEA Advertising

•Current Challenges & Recommendations •Conclusion

Introduction

Swedish furniture company started by Ingvar Kamprad in 1943

Largest retailer of ready-to-assemble furniture and furniture accessories globally. As of 2012, IKEA had:

• 298 Stores in 26 countries• €27 Billion in Sales

The most cost efficient furniture supply chain in the world

Opportunities & Challenges

• E-commerce/M-commerce

• Customer Relationship Management (eCRM)

• Social Media/ Word of mouth advertising

Opportunities

• Traditional buying behaviour

• Minimal interest on discussing Furniture online

Challenges

Digital Competitors

Types of furniture retailers

Digital media has changed the way in which furniture retailers both sell and market their products

• Websites & Mobile Apps- Online catalogues- E-commerce & M-commerce

• Social Media- Raise brand awareness

Multi-Brand Retailers Exclusive Brand Retailers

Digital Strategy

IKEA has leveraged digital media to adapt their business strategy in 3 specific ways

Restructure Consumer Journey

Improve Customer Relationship Management (CRM)

Leverage digital technologies to mitigate marketing costs

Multi-Channel

Digital media has led to the multiplication of touch points between businesses and consumers

Omni-Channel

“Truly integrated approach across the whole retail operation that delivers a seamless response to the consumer experience through all available shopping channels” (LCP Consulting 2013)

IKEA Catalog

The success of IKEA has largely depended on publishing the IKEA Catalog

IKEA Catalog

IKEA Catalog remained unchanged until 1997 when they launched their first website

1997

• Known as “World Wide Living Room Website”

• Contained limited product information and only provided a brief history of the company and company vision

1999

• Updated version included:- Product Guide- Assembly Tips- Store Locator - Ability to order

catalogue

2000

• Launched first ecommerce platform

• Tested first in Sweden and Denmark expanded country by country

IKEA Catalog

After substantial growth in sales from €7.6 Billion in 1999 to €21.5 Billion in 2009 due to digital initiatives, IKEA made two major adaptations to their catalogue

IKEA Catalog

IKEA Mobile Application• VIDEO: https://www.youtube.com/watch?v=NBv4FTnAlnE

IKEA Advertising

IKEA’s Social Media Channels

These Social Media platforms introduced the idea of content marketing

• “Creating and distributing relevant and valuable content to attract, acquire, and engage a clearly defined and understood target audience – with the objective of driving profitable customer action.” (Content Marketing Institute)

IKEA Advertising

THE FACEBOOK SHOWROOM• OBJECTIVE: Generate Buzz around the new store opening in

Malmö• STRATEGY: Leverage Facebook’s tagging functionality

IKEA Advertising

HAPPY INSIDE• OBJECTIVE: Challenge the perception that IKEA sells low-

quality furniture• STRATEGY: Let cats decide!• VIDEO: https://www.youtube.com/watch?v=8b1v5KDf2ts

IKEA Advertising

•EVERYDAY DIFFERENT• OBJECTIVE: Get consumers to explore IKEA’s vast range of

furniture • STRATEGY: Produce a commercial for every day of the year• VIDEO: https://www.youtube.com/watch?v=xFTZqlEEvAY

IKEA Advertising

•MAKE SMALL SPACES BIG• OBJECTIVE: Position IKEA as the solution for Small Spaces• STRATEGY: Utilize small spaces on the internet

Challenges & Reco’s

Channel Integration• Currently operating on multiple channels, but campaigns seem disjointed

• IKEA should ensure all campaigns online link to each other and have the common objective of driving to purchase

Digital Trends• New tools are constantly being invented, but it is impossible to activate on all of them • IKEA should plan to adapt Google Glasses and 3D printing

Fulfillment • Ecommerce has created increased demand for IKEA products

• IKEA should implement a real-time inventory reporting system

Google Hummingbird• Google is making the most changes to its algorithm since 2001 • All platforms will need to be integrated to ensure optimum search performance

Conclusion

IKEA has pioneered the use of digital media for furniture companies, however, IKEA is still evolving as an Omni-channel retailer

Continuous innovation without process efficiencies and integration will prove detrimental to the brand

Tack så mycket!