Ikea to drive growth through omnichannel strategy
Hyderabad: Ikea, Swedish home furnishing retailer, which opened its first retail store in Hyderabad in August 2018, witnessed 28 million visits to its website and the store, over the last three years. Driven by its omnichannel strategy, it aims to continue to make a positive impact on the regional economy through accessibility, affordability, and customer & community engagement.
Ikea today is catering to residential, office and hospitality segments with a range of furnishing products and accessories. India being a digitalised society, the retailer is drawing key data insights to understand the customer preferences and demand patterns, so that customised and relevant products can be offered from time to time.
Per Hornell, Market & Expansion Manager, Ikea India, told Telangana Today, in an exclusive interview, “Our 4,00,000 sq ft Hyderabad store is serving customers through multiple touch points — store, app, and online services. During the pandemic, as home took the centre stage, we launched Click & Collect, New Lower Prices, Ikea Family credit card and array of online services such as home furnishing consultancy, personal shopper, planner, etc. Over 40 per cent of our 10 lakh Ikea Family members are from Telangana.”
“With over 9,000 products, we continue to understand the needs of the home and provide home furnishing solutions accordingly. We have constantly been adding new products. We are not only engaging with our customers but the community as well. We are also planning a long-term community support programme where we will help repair homes for poor communities in Hyderabad,” he added.
The Hyderabad store currently has 636 direct co-workers and around 400 indirect co-workers. It has a mix of internationally experienced and locally recruited co-workers. The company that believes in diversity aims for equal gender representation at its store, and women already account for 44 per cent of co-workers.
On the sustainability front, he said, Ikea today is making 17 per cent deliveries in Hyderabad through electric vehicles. The store uses 13 per cent renewable energy through solar panels. The company uses 100 per cent recycled material as fillers in its parcels, and cardboard boxes made from recycled cardboard.
Some of the favourite product categories among Hyderabad’s customers had been beds & mattresses, bathroom, decoration, cooking and dining products. The top three searched terms are study tables, chairs, and sofas. Products related to living room seating are the most viewed on the web this year.
Digital solutions
“Through our digital solutions, we want to become even more accessible to customers in Hyderabad and across Telangana. We will continue to work towards affordability and will continue to invest towards this. We will also enhance customer and community engagement,” he added.
As part of the omni-channel expansion, Ikea has e-commerce presence in Hyderabad, Mumbai, and Pune. Recently it expanded ecommerce to Ahmedabad, Surat, Vadodara, and Bengaluru. He said, “We introduced e-commerce as a part of our omnichannel strategy. We also rolled out home furnishing consultancy for our customers, which helped during the pandemic. We anticipate the volumes will grow through online channels in future. As we enhance our online penetration, we expect to strengthen our customer support and logistics teams.”
Ikea aims to serve 200 million people in India over the next few years with an omnichannel approach. The first physical store was opened in Hyderabad, followed by its Navi Mumbai store in December 2020.
Sourcing arrangement
Ikea has been sourcing from India for over 35 years with close to 50 suppliers with 45,000 direct employees and four lakh people in the extended supply chain producing for its stores worldwide. It also works with social entrepreneurs, engaging close to 2,000 women artisans to produce limited-edition products for its global stores.
He said, “While we have a global range with local solutions, we have ensured that we have a large source base in India. We have introduced a locally relevant range of products to meet regular needs as well as festivities. Our local supply which was at 20 per cent when we opened our Hyderabad store, has gone up to 40 per cent now. This will continue to grow.”
City stores
Ikea is opening its first city store in India at Kamala Mills, Worli, Mumbai. The city store format allows Ikea to be adapted to smaller spaces in an urban context. Consumers will be able to shop the Ikea range, based on a digital and physical shopping experience. The city stores are in the range of 50,000-1,00,000 sq ft, whereas the traditional big Ikea blue box stores are typically 4,00,000- 5,00,000 sq ft.
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