IKEA has expanded upon how its cloud and digital transformation journey has accelerated as a result of Covid-19 – and the ‘data analytics revolution’ that has resulted.
Speaking at a Google Cloud EMEA event, Barbara Martin Coppola, chief digital officer for IKEA Retail, noted how the company had come a ‘very, very long way’ in its digital transformation.
“We have seen that the whole company has come together to deliver in a matter of days what would have taken a lot longer – months, sometimes – before Covid,” said Martin Coppola.
In a blog post, Martin Coppola (below, right) outlined the process behind the transformation. “An adaptation strategy was important for our business whilst undergoing this period of change,” she wrote. “We transformed our current technology infrastructure, converted our closed stores into fulfilment centres and enabled contactless click and collect services whilst increasing the capacity to manage large web traffic volumes and online orders.
“By using Google Cloud, among other key serverless technologies, we were able to instantly scale our business globally, on the web and in our stores,” Martin Coppola added.
The company, through its IKEA Germany arm, had already worked with Google Cloud in using Google Maps Platform to build a store locator app to improve its digital touchpoints, giving customers visibility of stores with products in stock, as well as highlighting locally relevant information and offers. IKEA is also exploring technologies such as mixed reality to improve the customer experience; the company recently acquired Geomagical Labs, to help consumers capture their spaces and virtually assess products before purchase.
Martin Coppola said the process of ‘data-centricity’, and using artificial intelligence (AI) to augment it, had been ongoing for three and a half years, and that Google Cloud was ‘absolutely essential’ to transformation and digitalisation overall. “We have been able to concentrate our efforts into creating new experiences for customers [and] co-workers, without having to be on difficult infrastructure, understanding and predicting how much capacity we would need,” she said.
“Thanks to cloud we are able to do a data analytics revolution. This is only possible through cloud – before, with on-premise, it was not possible capacity-wise [or] computing-wise.”
IKEA fits as a clear example of a high-value customer in one of the three areas Google Cloud specifically targets; retail, financial services, and healthcare. The retail segment has long been an interesting one for industry analysts, with some retailers – including Walmart and Albertsons – citing Amazon’s dominance as a mitigating factor in using Amazon Web Services (AWS). Martin Coppola told CNBC in March last year how Amazon was ‘a threat… undeniably’ in terms of eCommerce.
As recently as December 2018, IKEA was noted as an AWS customer when the cloud infrastructure leader opened its Swedish data centres. Yet at the major NRF retail event at the start of this year, IKEA decided to end a pilot whereby it tested selling on Amazon’s marketplace. IKEA also deals with Microsoft Azure – CloudTech has seen one contractor whose current employment on LinkedIn is as an Azure architect for the Inter IKEA Group – while in April, the two companies outlined how IKEA was using Microsoft 365 and Microsoft Teams.
Last month, research firm Canalys ranked Google as the top cloud service provider for the retail sector. The company cited Google’s strength in advertising and search, as well as aggressive hiring in the sector and establishing global systems integrator partnerships, as key.
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