What:  Ikea’s CDO interview on digital transformation and what it takes

Why it is important:  Even though she is coming from the tech world, the CDO reminds that tech is at the service of a vision, a purpose, and values supported by the company.

The HBR interviewed Barbara Martin Coppola (formerly at Google, Samsung and Texas Instrument) to understand the challenges of digital transformation in a legacy company. Ikea has tripled e-commerce in 3 years and digital transformation was carried at an intense pace. Since stores act as fulfilment centres, this led to a redefinition of goods flows, supply mechanisms and stores physical structure, and, more importantly, having to learn how to operate at 2 speeds (offline and online) with only one space to operate from. Martin Coppola reminds that digital transformation is not a goal per se, but a tool to transform business and making decisions.

In order to proceed, she makes an analogy with the iceberg: the visible part is what is done to interact with the customers, but under the surface, huge changes are made to the business and operating model.

E-commerce went from 7% of total revenue to 31% in 3 years, thanks to an holistic approach involving inventory management, logistics and fulfilment modernisation on several years.

Coppola Martin also reminds that nothing replaces the sense of purpose. For Ikea, the trust customers place in the company it key to its DNA. In order to keep that trust, digital transformation involved Ikea asking itself how to invent a new approach. As a consequence, there is a data control panel in the app that allows to change the privacy settings at any time. This allows to create a trustful relationship, as customers are able to decide what data they share while increasing the engagement.

Inside IKEA’s Digital Transformation