The last stop on the customer journey has new respect at IKEA stores and its website.
Speaking with PYMNTS as part of our ACI Merchant Series, Global Payments Manager at Ingka Group (IKEA Retail) Anna Pulante pointed to a number of initiatives underway at the world’s largest furniture retailer to use digital payments — specifically mobile — to breathe new life into its model.
“Payments is an enabler,” she said. “Until a customer is able to pay, they’re still a lead in that sense — we haven’t secured them yet as a customer,” she said.
But it doesn’t stop there. The Swedish retail giant also has to ensure that its range of products are connected to its range of relevant payment methods so customers can make informed buying decisions that fit their budgets, she said.
It’s not a simple decision for the global chain of over 460 big-box locations and a thriving online ecosystem.
“Being a large organization, we have to really be clear about where is it going to create the most customer value to be able to bring that point of sale closer to the customer,” she said.
At present, the focus is on the in-app experience for the shopper in a gargantuan IKEA location proceeding in a self-progression style of retailing.
“We’ve recently introduced a new way of shopping at IKEA, and that’s being able to shop and go within your app,” she said. “This has certainly changed the way that our customers shop at IKEA.”
Noting that the “IKEA way” has always been “we do a little bit, you do a little bit,” she said it’s an ethos that now applies to the checkout — wherever that may be.
“This is a nice way to represent that value where we’re empowering customers now to have that point-of-sale or checkout experience in their hands,” she said. “With more customers in central city locations where they want to get in and out, that convenience factor becomes more important.”
That effort is turning the smartphone-app combination into “a shopping companion,” she said, “being able to create your shopping list in your app, and then ultimately being able to just check out and pay. It creates a more empowered shopping experience within IKEA.”
Read also: IKEA Bets ‘Seeing Is Believing’ With AI-Powered Design Tool
Optionality and Relevance
IKEA has been ratcheting up its digital capabilities in several ways, including retail innovations like the IKEA Kreative experiential tool, introduced last summer for what it called “the first lifelike, fully integrated way [for customers] to design and visualize their own living spaces” with the ability to erase existing furniture and fixtures in a room and start from scratch on one’s device.
Pulante said this is part of a wider customer-first approach that extends from off-site room design to in-store enhancements to reduce queueing wait times for shoppers.
“If I think about it from a payments perspective and specifically from a checkout perspective, one of the key challenges that customers have is waiting times, having to line up to be able to pay for the things that you want to buy,” she said.
Bringing digital tools to bear “requires a balance of understanding what’s in it for the customer, but also what’s in it for our coworkers to be able to support our customers by utilizing these new tools.”
This focus takes in payments optionality as well and finding a balance there too.
“For us, it’s about being locally relevant for our customers and reaching the many, as well as making sure that our range is accessible for our customers,” she said. “It’s looking into what options are relevant.”
With a nod to the continued strength of cards and cash at IKEA locations, Pulante said, for example, that “there are a lot more digital wallets evolving. As a backbone to that, it’s more about how that’s providing the convenience of being able to pay with those specific options.”
She added that “it’s not just about the options, but also understanding where the convenience factors that are enabling customers to want to choose a specific type of payment option [are]. It is giving them not only their preferred payment method but also the convenience” they offer.
See also: IKEA Pushes Affordability as Inflation Looms
‘Payments Are Sexy’
With PYMNTS research finding that the average large retailer offers over nine different payment options, Pulante said this growth of optionality is an ongoing balancing act that IKEA is still working to perfect.
“In general, you need to understand your customers, you need to understand what customer journeys are impacted by what specific types of payment options and understand what products you are selling and where it makes sense to offer what kind of payment method versus another,” she said.
Saying there’s no “one-size-fits-all” solution, Pulante explained certain payment types, like cryptocurrency, are not currently relevant to IKEA or the customer profile drawn to the brand.
That’s not a condemnation of all exotic, new payment methods, as she expressed interest in the future of central bank digital currencies (CBDCs).
“I think what’s more interesting is talking about digital currency,” she said. “We have the digital euro that’s been in talks. That’s where we see things are headed in this sense.”
The upshot from Pulante’s perspective is: “We’re really talking about payments from a customer experience perspective and what it can do to generate a good experience for consumers.”
“If I leave you with a thought,” she said, “it’s that payments is becoming sexy again.”
PYMNTS Data: Why Consumers Are Trying Digital Wallets
A PYMNTS study, “New Payments Options: Why Consumers Are Trying Digital Wallets” finds that 52% of US consumers tried out a new payment method in 2022, with many choosing to give digital wallets a try for the first time.
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