Cheering co-workers and a marching band greeted thousands of eager customers as
IKEA Tebrau officially opened in Johor Bahru, Malaysia.
I’ve been in Southeast Asia for the past week and my trip happened to coincide with the annual gathering of eTail Asia in Singapore. eTail Asia is the destination event for large, established e-retailers to share best practices, to challenge conventional wisdom, and to network among the leaders of Asian e-commerce. The conference is well known for featuring inspirational case studies from transformational e-commerce companies from across Asia and for giving attendees a practical playbook for overcoming challenges and identifying opportunities.
IKEA, the Swedish furniture and lifestyle retailer that is infamous for its “easy-to-assemble” furniture, kitchen appliances, and home accessories, was making big news this year with their announcement of new e-commerce stores for China, Malaysia, and Singapore. IKEA Southeast Asia Managing Director Christian Rojkjaer detailed plans for how the brand will expand its e-commerce services across the region as the trial runs in these countries succeed.
Rojkjaer stated that Malaysia is a particularly critical market for IKEA in the region. In late 2017, the company announced its plans to invest over RM900 million to establish its regional distribution hub for ASEAN in Malaysia. The new distribution center will enable the country to strengthen its role in supporting IKEA’s growth in ASEAN, serving 12 retail stores in the region. IKEA plans to increase the number of stores in ASEAN to 20 by 2026.
In Shanghai, all of IKEA’s products, except for food and green plants, will be sold online. With the new e-commerce service, consumers can log into IKEA’s official website and purchase products via the shopping cart portal. IKEA’s online and offline products will maintain the same categories and same prices.
“Our e-commerce business model is suitable for smaller cities, where they don’t have physical stores. IKEA will launch more such pickup and order points across the region.”
-Christian Rojkjaer, IKEA Southeast Asia Managing Director
IKEA also boasted outstanding financial performance with stores welcoming 83.46 million visitors, marking a growth of 20%, compared with the previous financial year; and its sales reached CNY11.7 billion, an increase of 19.4% compared with the previous financial year.
Clearly, IKEA is making big bets in e-commerce in Asia — but what are they doing to assure that the conditions for success are in place to drive customer conversion and sales growth?
Working out online conversion rates is simply the most important thing to address when it comes to the website that your customers experience, and by doing some research on the best ways to increase your conversion rates, it’s essential in such a crowded online market.
You may think that IKEA’s secret to success lies in the creative visuals, or the beautifully printed catalog or even the impressive media buys for TV and online advertisements.
Well, you’d be wrong. Both for their in-store experience and on their e-commerce site, IKEA’s success in driving sales conversion derives from doing three things very well.
1. Investing in Compelling and Actionable Product Content
Of course, IKEA’s website imagery, designs, and layouts are of a high standard, but there are many other e-commerce sites that offer attractive, affordable and easy-to-assemble furniture, and some of them have a much longer online sales history. Remember that it is only within the past year that IKEA launched into e-commerce, enabling items to be bought via its website, where before it only allowed purchase in-store or through the product catalog. The reality is, it is a heavy lift to keep thousands of furniture product datasheets up-to-date, with measurements, weights, crate volumes and wrapping, assembly instructions, maintenance, and other standard technical characteristics requested by distributors and customers. IKEA currently handles more than 9,000 product references. This is one of the reasons that more than half of furniture manufacturers have no e-commerce presence.
You need a sophisticated strategy to automate your product catalog and maintain accurate product information. The secret lies in understanding which data elements are most important for awareness and sales conversion. First of all, there is important product information for online visibility and to help optimize search engine optimization (SEO) like product name, description, images and videos. But these are just the very early stages of the Customer BuyWay (where Story meets Strategy). You’ll need more detailed and actionable product content in order to drive sales conversion, some include:
- Price and shipping costs
- Promotional offers
- Technical characteristics (materials, colors, finishes, etc)
- Dimensions and weight
- Assembly instructions
- Packaging description
- Declaration of product performance
- Product liability and environmental impact declarations
Your e-commerce product catalog is a critical success factor when it comes to driving sales conversion. If it is not well-organized, accurate, and up-to-date it will become a barrier to your sales growth.
2. Turning Customers into Advocates
These days, the term “mass marketing” has taken on an entirely new meaning as the masses control much of the dialog and all of the authentic advocacy about brands and their reputations. While you may think you or someone at your company manages your brand today, it is really the external perception of your target customer audience that defines your brand. Making matters worse, social media channels give your target customers an easy way to share opinions about your brand with thousands of others instantaneously. This powerful and ubiquitous communication channel has the potential to put your brand in constant peril and make your firm’s reputation vulnerable to rumors and viral misinformation. How will you manage a brand in a world where so many of the success variables are no longer in your control? By encouraging online reviews and testimonials from your customers, you begin to build up an authentic source of truth about your brand. And as a side benefit, it’s a great way to source new content for your website. In particular, testimonials are a powerful confirmation that there is someone real on the other side of the website, and sometimes that confirmation is just enough to inspire that final click of conversion.
3. Outsourcing Backend Systems
Let someone else deal with the hassle of managing the transaction servers, coordinating with fulfillment operations and assuring that your cyber security and customer privacy protocols are up to date. Outsourcing of e-commerce systems as a practice has matured to the point that it is an industry best practice. E-retailers need to focus on telling their brand story, refining their go-to-market strategies and delivering a remarkable customer experience. Dealing with the complexities of omni-channel interactions and maintenance headaches associated with backend e-commerce systems can become a huge distraction — especially for transformative marketers. You can massively improve your marketing effectiveness and overall productivity through outsourcing. Engaging a high-quality, e-commerce hosting provider enables you to focus 100% of your efforts on delighting customers and making more money.
We can learn much from the IKEA story as they evolve and enhance their Omni-channel customer experience on a global stage. Clearly, it is a company whose leaders have embraced a transformative approach to their business and they’ve tackled the 3S methodology. They have a simple and compelling Story, a clear and integrated go-to-market Strategy, and they are aligning their Systems (people, process, and technology) to deliver a remarkable, Omni channel customer experience.
Get my new book, Marketing, Interrupted, to read more transformational marketing success stories about bringing simplicity, clarity, and alignment to Brand Story, Strategy, and Systems.