Amer Yaghi, Regional Marketing Director at Ikea Group for UAE, Egypt, Qatar and Oman, reflects on how the retailer navigated the crisis, keeping everyone on board.
There’s little more physical than furniture when it comes to shopping. People want to see it, touch it, even try it at home, if possible, to assess the fit and see if a like can turn into love. So, when the pandemic hit and restrictions became likely, we knew furniture shopping would need some serious reinvention.
This transformation had already begun in many ways with consumers’ adoption of digital lifestyles. The pandemic accelerated and widened it. If on a personal basis, the crisis reminded us of the importance of relationships, staying close to our loved ones despite the distance, on a business level, it’s the power of collaboration in making us agile to respond optimally that stood out.
Our first concern was our staff and customers, so we shut stores and redirected business to digital platforms. Thankfully, these had been worked on for several years, so we hit the ground running, so to speak, managing a 200% increase in our online traffic and transactions in the first two months of restrictions.
When people were forced indoors, their home became the center of their universe. They lived, ate, studied, worked, socialized, exercised there. While the expected increase in home office furniture did materialize, the rise in demand was actually across the board.
We detected this shift in consumer sentiment and behavior early on and adapted by connecting and engaging with our audiences. Through content and storytelling on platforms like Instagram and TikTok, we shared ideas and solutions through online platforms on a micro-moment level. We offered advice on how to live better at home, adding value at this particular time. It wasn’t about selling more but providing reassurance and comfort.
We saw how our Asian operations were impacted by the pandemic and the restrictions applied in response. The fact that our markets of operation are in the Middle East and North Africa allowed us to be more agile in our logistical fulfilment from hubs in Europe and Asia. We also eased the pressure of rising e-commerce volumes on our supply chain by investing heavily in our last mile resources and increasing our fleet capacity three-fold overnight.
Agility has been the order of the day with the pandemic. Remote work had to work for us to stay safe, but it also made us more productive and innovative. The roll-out of services, like Click+Collect or virtual interior design, took weeks rather than months, without anyone having to work 24/7. Our agency partners came up with more creative campaigns and more ideas.
Today, clients require new levels of collaboration, more and faster interactions as well as more efficiency and better quality. It’s particularly true in social content. We’ve started to internalize several aspects of our communications, particularly the customer experience, with the site and e-commerce platforms. While most of our production happens internally, we rely on this external expertise for major parts of our marketing, including strategy, media and the mining and activation of data.
Data and technology
Data allows us to refine our understanding of our audiences and their lifestyles to tailor experiences that maximize visits and transactions. Our audiences are segmented first on their living situations (alone, with a partner, with children or an extended family), with additional layers applied, with thousands of criteria. Through social listening, we gauge demand and interests. We also rely on our loyalty program for our funnel approach, using it as meta-data to create custom audiences and then lookalike audiences to improve our campaign performance.
Before the pandemic, we used these segments in social campaigns to stimulate in-store traffic, optimizing ad impressions on people most likely to visit. Once restrictions were implemented, we used data to drive online traffic to our sites. We turned some stores into order fulfilment centers, where shoppers could collect their online orders. In just a couple of weeks, these represented 5% of our sales. Most of the growth of our online sales in the last two years, from 2% to 17%, happened this year.
This is reshaping the retail experience. Consider our new city center stores, like in Abu Dhabi’s Al Wahda Mall. At 2,000 sq. ft, it’s less than 10% of our typical store. It is a new concept that brings the experience closer to people. It has strong digital solutions for shoppers to interact with the furniture physically, through an Augmented Reality feature on the shopping app, for example, or indeed buy it online. Where people buy is irrelevant.
Incorporating shopping habits and transactional data is extremely important on a macro level. Linking that with a strong content strategy framework will allow retailers to develop content that is relevant interesting, and creative for the right customer. Bridging the gap between online/offline is critically important, and we’ve been looking at integrating OOH with digital. The point is to communicate with people at a relevant micro-moment when they need the brand.
Brands and designers
IKEA started collaborating with brands and designers like Lego or Virgil Abloh before the pandemic. The Markerad collection with Abloh was more for young people newly becoming independent. We explored the intersection of design and pop culture and saw massive potential in artistic products made by a respected designer at an affordable price. Last year, we collaborated with Nada Debs, a famous Lebanese designer, for a Ramadan collection. The result is LJUV, a contemporary Middle Eastern collection with vintage geometry patterns. It will become a feature again next year.
The collaboration with Lego came from the understanding of each of the brands’ strengths. Lego is an expert at providing children and adults a space to imagine and create. So, when Lego came to us with the idea of collaborating together, we had to play. Here in the region, we built IKEA furniture with Lego bricks as a stunt, a big surprise for shoppers.
These brand-building collaborations are more long-term than short-term. Brands must keep investing in collaboration with designers, exploring with young talent, giving them a podium to create new solutions.
To attract customers and make them loyal, brands need to constantly stay top of mind and relevant. Our growth will come from new markets, but also new niches and segments. People’s priorities are changing and collaborations help us keep abreast of them. The crisis reminded us of the power of relationships and mutual understanding. It sounds like a cliché but united we’re stronger. Ultimately, we will win as a collective because we are all intimately connected.
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