How IKEA executed contactless retailing to open its stores in Hyderabad amid a lockdown

• In our latest series, we talk to brands about how they have been marketing during these adverse times, the things they have learnt and how they are preparing for the somewhat uncertain future.
• In today’s exclusive, Kavitha‌ ‌Rao,‌ ‌Country‌ ‌Commercial‌ ‌Head,‌ ‌IKEA‌ ‌India‌ tell us how did the brand pull off reopening its stores and how contactless shopping is the inevitable future of retail industry.

With the lockdown, the meaning of what home is has evolved. It is our gym, workplace, playground and school for kids. With this, furniture brands had to relook at their product offerings to be able to address the changing consumer needs.

IKEA was quick to spot that COVID had made the furniture category move from being a want to becoming a need. The Swedosh furniture giant reminded consumers through its advertising campaign that ‘Home can be full of possibilities.’ It encouraged people to stay at home, and explore their home by engaging in activities befitting each room. However, while buying new furniture to facilitate various remote activities became a necessity, consumers did not want to step out because it involved communicating with store helpers.

So when IKEA decided to open its stores back in Hyderabad amidst the lockdown, it wasn’t an easy job. It involved rethinking retailing. It, therefore, launched a contactless way of shopping called ‘Click and Collect’ that allowed consumers to collect their order in the car parking area. Apart from that, contactless hand sanitizer machines, indicators on the floor for social distancing, physical barriers for extra safe shopping, queue management for line-ups, separation screens around sales points, cash registers and customer service points were installed to gain consumer trust.

Kavitha‌ ‌Rao,‌ ‌Country‌ ‌Commercial‌ ‌Head,‌ ‌IKEA‌ ‌India‌, further walks us through the brand’s action plan for the Hyderabad launch, changing consumer patterns in the market, why it is important to listen to your consumer in the current situation, and find solutions that are not only easy to implement but also easy on the wallet.

Excerpts:

Q. How challenging were the last three months for you?

At IKEA, the health and safety of our customers, co-workers, suppliers and communities have been our biggest priority. Keeping this in mind, we closed our physical retail operations even before the government guidelines came out. As a business, we have had to redirect our focus to take care of our people, whether they are our coworkers, business partners or communities around us as we face this unprecedented global crisis together.

It was clear that we need to understand what the future of retailing would look like, and begin to rethink the future and what innovations would be relevant in the post COVID era. We also realized, it was important to stay agile and adapt as things continue to evolve rapidly.

During the lockdown, the ecommerce channel has been a big boon to consumers and businesses. With people spending a lot of time at home, home furnishing has become even more important and hence, we had to strengthen our online presence to reach many more people with home furnishing essentials they need during these times. ‘Click & Collect’, a safe and contactless shopping service was launched in India in May to support our ecommerce business even better. We also launched an online personal shopper service to aid customers in their shopping journey online. In addition, remote planning and home furnishing consultancy supported our customers to plan and furnish their homes remotely.

Caring for communities has been a big focus for us. To be people and planet positive is integrated in our business foundation. Globally we launched a relief fund of €26 million to support COVID-19 affected communities. In India, we have tied up with various organizations, and government to help vulnerable communities such as migrant families, children and women. IKEA India also helped setup quarantine centers in Hyderabad. We will continue to support communities in the long term.

Q. How have you observed the consumer behavior changing during these last few months?

The ‘home’ is always emotional. With our consumers spending all their time at home, it has acquired a whole new meaning; it is the new office, the new playground and school for children, the new restaurant and the new window to the world. While spending habits may not be the same as before, the need for home furnishing and furniture is amplified. This has given us a chance to explore innovative ways to offer products and solutions and address the consumer needs linked to home.

Recent researches talk about 25-30% of consumers shopping online for the first time across categories, be it food, groceries, services, etc. A more forced-adoption of ecommerce is also leading to consumers discovering the convenience associated and the option is turning out to the preferred mode of shopping.

Consumers are also more focused on their health and well-being and people are more conscious of leading an environment friendly and sustainable life at home. This will mean that brands paying attention to this trend will gain significantly.

There are many needs at home today, but the economic uncertainty is not far behind. While a lot of the furniture and home furnishing solutions are moving from a want to a need, this is also the time when consumers are thinking twice about every spend. This is where affordable solutions become even more important. Being able to do more with less acquires a new meaning. Businesses that address this dimension of consumer sentiment are poised for growth.

Q. What are some things that you think will never be the same, once we resume normalcy?

There are many factors that will evolve in a post COVID-19 world, and one of the foremost developments is people avoiding crowded places for a while to come. This could also mean that consumers make a more permanent shift to shopping online in some categories. We will also see an emergence of smart buying where customers will plan their shopping in advance and only purchase things that they need. With a likely decline in consumer spending in discretionary categories, value for money and affordable solutions will be a preferred option for consumers. Physical retailing could see some significant changes; consumers might not be keen to interact with store coworkers but might be more comfortable to shop using digital enablers – videos, QR codes and apps that demonstrate the features, tips and tricks, functionalities of a product; thereby substituting the coworker and help maintain social distancing.

Q. As markets open up, how are you ensuring that your consumers start trusting you?

Safety of our coworkers and customers are our highest priority during these extraordinary times. To enable safe shopping, we launched Click & Collect, first of its kind in India which is a totally contact less way of shopping. Customers can order IKEA products on our website, pay online and select the ‘Click & Collect service’ option when checking out. IKEA's delivery team would prepare their order for them to pick up from the Click & Collect collection station in the store’s car parking area. This has added to our ecommerce capability and provided more options to customers shopping online.

We reopened the Hyderabad store earlier this month with strict safety protocols in place. We limit the number of customers allowed into the store at a given time and ensure strict social distancing norms. Contactless hand sanitizer machines, indicators on the floor for social distancing, physical barriers for extra safe shopping, queue management for line-ups, separation screens around sales points, cash registers and customer service points are in place to secure a safe shopping experience. All shopping bags and trolleys are sanitized after use. And customers are subjected to temperature checks and mandatory face masks to further heighten safety.

Q. How do you see the retail sector shaping up? What would its future look like? Do you think e-comm will take precedence?

E-Commerce will emerge as a preferred channel for shopping for a vast majority of consumers across a wide range of categories. Physical retailing will see a reduction in shopping trips, but the trips that happen will be well planned and focused. This would also mean window shopping and impulse purchases are likely to reduce.

When it comes to discretionary spends, consumers are likely to cut back on spending. A lot will depend on value for money and affordable products and solutions that retailers are able to bring together to address consumer needs. For example, a family might decide to postpone the purchase of a new sofa but might be open to updating the curtains and cushions to refresh the living room. Retailers will need to identify these pockets of opportunity and address consumers’ needs in the best possible manner across dimensions of value for money, good quality and design.

Retail sale campaigns of the future could look different. Consumers might not be swayed by discounts offered as window shopping and impulse purchases are likely to decline due to the economic implications of the COVID crisis. Addressing a consumer need with value for money products and solutions might become more important than a deep discount.

Q. Has the current situation made you innovate and think out of the box, in terms of how you communicate with your consumers? What does your marketing strategy look like?

In tune with our vision ‘To create a better everyday life for many people’, as a brand, we always side with the many people, the common man as we know them in India. We always want to reflect empathy and togetherness with our customers, co-workers and communities. We also believe that ‘everyday life’ matters much more than the one-off excitement that could be few and far between. With that, our aim is and continues to be- to create a better life by offering a wide range of functional, well designed, affordable home furnishing solutions that can meet the needs of a diverse section of people with varying needs, wishes and dreams linked to their home.

The COVID crisis is unprecedented and has required us to rethink the future and reinvent ourselves across many dimensions. When it comes to our marketing communication, we continue to side with the many people on relevant themes. During the lockdown period, we launched two campaigns that focused on people and their lives during COVID-19. The ‘Home is full of possibilities’ campaign encourages people to stay at home, and explore their home by engaging in activities befitting each room. And on account of International Day Against Homophobia, Biphobia, Intersexxism, and Transphobia (IDAHOBIT), we launched #BeSomeonesHome campaign as our outreach to LGBTQI individuals whose families may not be with them in these times of crisis.

IKEA is a relatively new brand in India and we will continue to work towards building the brand for the long term with key messages linked to everyday life at home and how IKEA can help make it a little bit better with our range of products and solutions that stand for design, quality, affordability and can support a more sustainable life at home. Through our messages, we will always connect with people as people more than as consumers.

Q. What is your media plan going to be now? Which medium will get the lion's share?

As a brand, we side with the many people and hence we need to reach a very diverse audience; we will continue to focus on all the key media options ranging from out of home, TV, OTT channels, digital to print media. The media landscape has evolved significantly in the last decade with digital options taking a lead and we will look to have a good balance of digital and conventional media options. In the post COVID world, we do see people consuming entertainment at home and that is a new and interesting space to explore.

Q. What are some of the key learnings from this experience?

The COVID pandemic has caused a major health crisis across the world and the intensity and duration of the economic crisis that will follow is still unclear.

It is important to stay agile and be quick to adapt to changing conditions that the crisis can present. Businesses in general need to use this opportunity to think of new ideas that can enable profitable growth in the future. As a home furnishing retailer, we see that the home has become even more important, but that does not mean people have the money to spend on refurnishing their homes, even though they might have an acute need to do so; this makes it even more important to find solutions that are not only easy to implement but also easy on the wallet.

In addition, retailers also need to focus even more on their co-workers as they are in the lead in delivering a great customer experience, both online and in the store. Building a mindset of resilience amongst coworkers and empowering them to innovate and adapt to new ways of working is a great enabler to growth.

It is only by remaining open to change, collaborating, understanding and adapting to consumer sentiments and trends, can we help create a new narrative for the future. A new narrative that will help us meet consumer need and enable the much-needed growth for our businesses.