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IKEA is changing its business model

Over 25 years ago my family visited Singapore. In all the shops we visited, rather than carrying home what we had bought or specified, the shop assistants simply asked which hotel we stayed in and the items were in our room when we got back. Several of the items such as clothing had been customised prior to delivery. These services were not aimed at the rich. Free delivery was both standard and expected as part of the normal shopping service across the majority of shops. It’s taken a long time but this customer-centric level of service is now coming into contemporary online trade.

IKEA has announced plans to extend this type of service for furniture and furnishings using a new Virtual Reality app that lets you ‘virtually’ try before you buy followed up by home delivery. The cost of home delivery is mitigated by smaller stores only holding a few items of ‘demonstration’ stock in small retail units.

The key individual behind the latest ecommerce push is Jesper Brodin, CEO of Ingka Group, which owns most IKEA stores. With a background in Science and Engineering, Brodin is a strong advocate of ecommerce. Under Brodin’s stewardship, they have been trialing ‘boutique’ city-centre outlets including a dedicated kitchen showroom in Stockholm, two London planning studios offering personalised planning, and one for living room furniture in Madrid. In each case, customers are able to use 3D modelling and Virtual Reality to better understand how a product might fit within a room. How it might look from different viewpoints plus issues around form, colour and functionality can be explored using VR technology.

A key driver for these new innovations has been the development of a new generation of photo-realistic 3D software environments that are generated without manual 3D programming expertise. Google’s 2019 I/O Developers Conference announced how the company is bringing the smartphone camera and augmented reality together within a single world view. Developer APIs are already available and various ecommerce companies are already experimenting in providing customers with virtual buying choices by overlaying company products into digital views of the actual rooms where the products might end up.

Made.com is experimenting with Augmented Reality furniture placement apps while a whole slew of other companies are experimenting with this new approach to product search and selection.

To varying degrees, each of these solutions use a combination of the Following steps:

It should be noted that not all of the aforementioned case studies conducts every step outlined above. With some, crude simple overlays of 2D information are sufficient to allow a user to gain a ‘reasonable’ understanding of what the result might look like.

Local ecommerce companies such as Glasgow’s WholesaleDomestic have been a long-term user of Virtual Reality to help their customers visualise bathroom suites:

All of the above product photographs combine 3D product models with CGI generated room graphics. The primary reason for this approach is down to cost. It’s much cheaper to do this electronically than to build a bathroom, plumb it with units and then photograph the result. Several hundred example VR image views can be seen at www.WholesaleDomestic.com.

The next logical step is to find ways to speed the process of photo VR rendering and to do it using a customer’s own bathroom as the background. For buyers who are technically able to use their smartphone to create their own 3D virtual model of their own ‘real’ bathroom then experimenting with different layouts, designs and colours will be possible without leaving home. The belief is that the more that can be done to help a customer visualise the actual product in the real setting where it might end up then the higher the sales conversion ratio.

If it can be demonstrated that the dip in conversion ratio from VR only information compared to actually seeing and touching the product is not radically different then, as Jesper Brodin suspects, the future of these large and expensive to run retail warehouses may be numbered.