Digitalization is transforming the retail landscape, pushing businesses to adapt and innovate. This article examines how IKEA, a leading retail giant, explored digitalization in its early stages, navigating uncertainty and integrating new technologies into its existing business model. We analyze IKEA’s approach through three key activities: interpreting digitalization, interrelating it with their existing business, and integrating new ideas and solutions.
Understanding Digitalization in Retail
Digitalization, the integration of digital technologies into everyday life, has significantly impacted businesses, particularly in the retail sector (Hagberg et al., 2016). It presents both opportunities and challenges, forcing companies to rethink their strategies and operations (Leeflang et al., 2014). In retail, digitalization has influenced areas such as omni-channel strategies (Verhoef et al., 2015), business models (Jocevski et al., 2019), and the role of physical stores (Hagberg et al., 2017). While recent research has explored digitalization across the retail value chain (Hänninen et al., 2021), the early exploration phase, where companies grapple with the meaning and implications of digitalization, remains less understood. This article addresses this gap by examining IKEA’s initial approach to digitalization.
IKEA’s Exploration: A Case Study
IKEA, operating in a dynamic retail environment, faced the imperative to adapt to the digital age (Hänninen et al., 2018; Blom, 2019; Jocevski et al., 2019). This case study examines how IKEA navigated the uncertainties of digitalization, exploring its potential impact and integrating it into their established business. Our analysis focuses on three core activities within IKEA’s exploration phase:
Interpreting the Meaning of Digitalization
IKEA’s initial step involved understanding what digitalization meant for their specific business context. This required analyzing the evolving digital landscape, identifying relevant technologies, and assessing their potential impact on IKEA’s operations, customer experience, and overall strategy. This process involved internal discussions, external consultations, and market research to gain a comprehensive understanding of digitalization’s potential.
Interrelating Digitalization with the Existing Business
Once IKEA established a working definition of digitalization, they focused on how it could enhance their existing business model. This involved identifying areas where digital technologies could improve efficiency, enhance customer engagement, and create new value propositions. IKEA explored how digitalization could be integrated into their supply chain, logistics, customer service, and in-store experience.
Integrating New Ideas and Solutions
The final activity involved implementing and integrating new digital solutions. This included piloting new technologies, developing digital strategies, and adapting internal processes to support digital initiatives. IKEA experimented with various digital tools and platforms, focusing on those that aligned with their overall business goals and customer needs. This iterative process allowed IKEA to learn from their experiences and refine their digitalization strategy over time.
Conclusion: Navigating the Digital Frontier
IKEA’s early exploration of digitalization demonstrates a proactive approach to adapting to technological change. By focusing on interpreting, interrelating, and integrating digital solutions, IKEA successfully navigated the uncertainties of the digital landscape and laid the foundation for future innovation. This case study provides valuable insights for other retailers seeking to embrace digital transformation. Future research could explore the long-term impact of IKEA’s early digitalization efforts and compare their approach with other retailers.
