IKEA bets on remote interior design as AI changes sales strategy

Author: Reuters

LONDON, June 13 (Reuters) – IKEA is training call centre workers to become interior design advisers as the Swedish furniture giant aims to offer more home improvement services and hand run-of-the-mill customer queries to an artificial intelligence bot called Billie.

In April, IKEA expanded its interior design services to the UK and United States, after previous launches in parts of Europe, Australia, the United Arab Emirates and elsewhere. In the UK, customers pay 25 pounds ($31.44) for a 45-60 minute interior design advice video call and suggested product list, and can pay 125 pounds for three workspace design consultations, a floorplan and 3D visuals.

Ingka says it has trained 8,500 call centre workers as interior design advisers since 2021, while Billie – launched the same year with a name inspired by IKEA’s Billy bookcase range – has handled 47% of customers’ queries to call centres over the past two years.

“We’re committed to strengthening co-workers’ employability in Ingka, through lifelong learning and development and reskilling, and to accelerate the creation of new jobs,” said Ulrika Biesert, global people and culture manager at Ingka Group.

Asked if the increased use of AI was likely to lead to a reduction in headcount at the company, Biesert said: “That’s not what we’re seeing right now.”

Sales by phone or video of products and services through Ingka’s remote interior design channel accounted for 1.3 billion euros ($1.40 billion) of revenue in Ingka’s 2022 financial year – 3.3% of the total. Ingka Group told Reuters it aims to grow that share to 10% by 2028 as part of a push to appeal to future Gen Z customers.

In comparison, online sales of products via IKEA’s website, which is owned by Ingka, amounted to around 9.9 billion euros, or 25% of total sales in Ingka’s financial year ending Aug. 31, 2022.

The investment in digital services, as IKEA embarks on a 2 billion euro expansion in the United States, is in keeping with rival Wayfair, which last month launched a ‘Digital Design Studio’ – an in-store kiosk where shoppers can experiment with furniture styles and layout in a digital rendering of a room.

“It’s not surprising that IKEA are now focusing on virtual sales channels – if anything the surprise is that it’s later than it could have been,” said Jocelyn Paulley, a technology lawyer and co-head of the retail sector team at Gowling WLG in London.

These virtual services require significant investment, she said, to ensure items’ colours, textures and sizes are accurately reflected and to minimise returns.