IKEA Taps Google Cloud to Handle COVID E-Commerce Surge

Need to Know

• Google Cloud allowed IKEA to scale its online business globally to accommodate new demands brought on by the pandemic, such as higher web traffic and more Click & Collect orders.
• Using cloud technology, IKEA also trained data models to assist staff, creating more efficient picking routes and in turn improving the customer experience.
• IKEA says the transformation, which took place instantly, would have taken “months or even years” without the use of cloud tech.

Analysis

IKEA has credited Google Cloud with enabling the company to quickly and seamlessly pivot to accommodate the digital demands brought on by COVID-19.

In a blog post written by IKEA Retail’s Chief Digital Officer, Barbara Martin Coppola, and published in the Google Cloud blog, Coppola details how IKEA leveraged cloud technology “instantly scale our business globally, on the web and in our stores.” This included a transformation of IKEA’s existing technology infrastructure to accommodate a spike in online orders, the conversion of stores into fulfillment centers, and the implementation of contactless Click & Collect services. By using Google Cloud services, Coppola writes, IKEA was able to do all this “whilst increasing the capacity to manage large web traffic volumes and online orders.”

The pandemic accelerated IKEA’s digital development; Coppola writes that, with the use of Google Cloud and other cloud services, “things that would normally take years or months were accomplished within weeks and days.”

In addition to scaling up its consumer-facing business operations, IKEA was able to ensure working conditions for staff remained optimal with the help of Google Cloud. “With the use of technology, we focused on taking care of co-workers as our first priority,” Coppola writes. Staff were able to borrow equipment for working from home and were empowered with new data and digital tools. Through cloud technology, IKEA automated routine tasks and trained data models to assist staff in order-picking, which in turn improved the customer experience.

Coppola’s blog post echoes her comments in June, at which time she noted the company was seeing “a permanent shift towards e-commerce and its convenience.” Coppola said in June that IKEA had halted “non-proactive activities” in favor of e-commerce.

IKEA has been focusing its efforts on digital innovation since before the pandemic, with a number of online initiatives launching in the first few months of the year. In January, the company announced that it would be opening an online-only store in Pune, India, before launching a physical storefront there, after successfully piloting the digital-first launch strategy in Mumbai. Not long after, IKEA announced its plan to expand its online retail offerings to include its popular food items, and the company made history in March by announcing that it would begin listing its products on Alibaba’s Tmall, a third-party marketplace.