May 27, 2019 / 2:23 PM / 6 months ago

Exclusive: IKEA to revamp app as store strategy shifts

BERLIN (Reuters) - IKEA is launching a new app to allow customers to shop remotely for products they can visualize in the context of their own homes, lessening the need for them to travel to its vast network of self-service, out-of-town stores.

FILE PHOTO: General view of the Swedish furniture giant IKEA store before its opening, the company's first store in the heart of Paris, France, May 6, 2019. REUTERS/Charles Platiau/File Photo

The world’s biggest furniture retailer is shifting its business model away from pushing customers through its suburban stores toward making shopping easier online, and downtown.

“It is a completely new experience,” Barbara Martin Coppola, chief digital officer at IKEA, told Reuters in an interview. “The app is combined with the store experience, with the online experience.”

The app will be launched first in France and the Netherlands and will be rolled out in IKEA’S top eight markets - including Germany, the United States and China - by the end of the year.

It will allow users to visualize how their homes could be furnished with IKEA products by inputting room dimensions and choosing from different tastes and life stages. They can then order those products through the app.

IKEA originally launched an augmented reality app in 2017 which allowed customers to see how more than 2,000 items would fit into their homes, but they could not shop from it.

IKEA’s main app carries its full range but products are still displayed in isolation, and customers can only add items to a shopping list for use during a store visit. Remote shopping can only be done through the IKEA website.

Fast-growing British online furniture retailer Made.com last month launched a new interior design service for a fee, which uses artificial intelligence to recommend products and 3D technology to show what the furnished room will look like.

Other players experimenting with augmented reality include Williams-Sonoma, which bought 3D imaging firm Outward in 2017, and U.S. startup Modsy, which raised $37 million this month to expand in 360-degree room and furniture imaging.

IKEA’s new app will complement the group’s move to trial smaller downtown stores with a narrower range, like the one it opened in the heart of Paris earlier this month.

“People who go to the stores might want to access the full range of IKEA, and that is when digital innovations come in handy,” Martin Coppola said on the sidelines of the World Retail Congress earlier this month.

The app will allow shoppers to point their phone at a chair to see other textures or colors, or to see it in the context of a room or alongside similar products in the same range.

IKEA has stepped up efforts to respond to the rise of e-commerce since Jesper Brodin took over in 2017 as chief executive of the Ingka Group, which owns most IKEA stores.

IKEA has been trialing city-center formats including a dedicated kitchen showroom in Stockholm, a London store offering personalized planning for home renovations, and one for living room furniture in Madrid.

As e-commerce grows, Martin Coppola said IKEA might reconfigure its out-of-town sites, incorporating what it is learning from its downtown pilot stores and possibly using more of the space as dedicated warehouses to prepare online orders.

Meanwhile, Made.com is ramping up its offline presence as it expands in Europe. It launched a pop-up showroom in Stockholm this month just a block away from IKEA’s kitchen store, and is displaying plush armchairs in Amsterdam’s Schiphol airport.

“We are in discussions with other airports,” Chief Executive Philippe Chainieux told Reuters. “Every single customer journey starts online and ends online but they still need to have the capacity to touch and feel.”

Made.com is also being creative with the eight showrooms it already operates, such as offering online customers the opportunity to connect with a store manager by webcam so they can see a piece of furniture from all angles.

Reporting by Emma Thomasson, additional reporting by Anna Ringstrom in Stockholm; Editing by Jan Harvey

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