Ikea's e-commerce has fallen apart during pandemic
Ikea has long known the shortcomings of its business. The world’s largest furniture manufacturer kept prices low by selling flat-packed goods out of its giant stores, all while it was slow to respond to the digital revolution of apps and e-commerce. In January, Jesper Brodin, CEO of Ikea’s parent company, Ingka Group, acknowledged as much and told Fast Company that Ikea was “investing like never before” in its digital platforms and home delivery.
But customers have yet to see the return on that investment. In the months since COVID-19 hit, closed Ikea stores and social distancing forced customers to pre-order items online, then pick them up in person, a system Ikea calls “Click & Collect.” Alternatively, customers could get large items delivered for a flat fee of $49.
Ikea tells us its e-commerce business doubled over this time. But without the capacity to handle it, Ikea has fielded widespread customer complaints. We’ve seen stories of unfulfilled orders, inept customer service, and even, in one case, a 500-mile drive to pick up furniture that was marked “out of stock” 30 minutes before the customers arrived. Even now, as Ikeas have reopened around the United States, these problems haven’t been solved.
“We are sorry customers have had challenges with their orders and for the inconvenience and disappointment this has caused,” Ikea offered in a statement to Fast Company, declining to make a representative available for an interview. “Like many retailers and other businesses, Ikea U.S. has been impacted by COVID-19 in many ways.”
The horror stories
The stories we’ve come across, from both readers and disgruntled customers on the internet, are long, intricate yarns, in which a seemingly simple order spirals out of control, sending shoppers into customer service hell.
As Roxana Elliot, who works in marketing, tells us, “I ordered a closet set to be delivered from Ikea, ordered on July 5 for delivery on the 30th so a longish lead time, but I was fine with that given the challenges I know they are having around COVID. On the 20th I got an email that seemed to indicate it was still on track saying it was being picked from their warehouses, and then just on the 28th I got another email abruptly saying it has been canceled with little explanation other than due to delays.”
Elliot tried calling customer service only to be hung up on by automated systems. Ikea support on Twitter ghosted her as well. Ultimately, she got a cancellation letter out of the blue along with a refund, and she ended up going to her store to buy the items herself. What she still doesn’t understand is, if the items were out of stock at her local store, why didn’t Ikea suggest similar items that were in stock?
The experience of a consultant named Thomas Urwin echoes much of this story. He ordered furniture in July, anticipating delays due to COVID-19. He was promised a delivery date of July 28th.
“After several false starts due to busy phone lines and calls that simply ended because Ikea customer support was receiving too many calls, I got through to someone who told us the delivery would not be coming today. Or tomorrow. They couldn’t say when the delivery would come, because the items on order were not in the warehouse. Or in the country. They didn’t know,” Thomas writes. “At least one item has been discontinued since we placed the order, which Ikea didn’t seem concerned about enough to inform or issue a refund. The customer service agent offered to transfer us to a specialist, at which point we were put through to another line which simply told us that due to the volume of calls, our call could not be completed, and cut us off again.”
After several more calls, he was offered the options of canceling his order or scheduling a new delivery date—September 9. But there was a big catch. It was possible the items might not be in stock, yet again, and by September 9 he would be in the exact same situation. He learned his local store would be restocked with the items August 1, but for whatever reason, that store couldn’t just ship them upon receipt. He’d have to go in during the pandemic, and rent a car to get there, since he doesn’t own one. (He also scored a $75 gift card for his troubles.)
Reddit’s Ikea group has a whole thread dedicated to hell stories, with new ones piling up every day. One was a case of what happens when you rent a car and drive way too far to grab the “in stock” item. “My sister and [brother-in-law] are really upset right now,” Reddit user Cyberburn wrote on August 23. “They made the 500+ miles round trip to Ikea to pick up their Click and Collect order on Friday, and it was cancelled 30 minutes before they arrived. My brother-in-law took off work to make this trip. The same thing happened to me a year ago, but the employees were able to ship the few missing parts to me. I’m just surprised that this is still an issue. It’s one thing if you live nearby; it’s a whole different thing if you are driving from far away and only for Ikea.”
The problems boil down to a few things. Ikea’s inventory management seems poorly updated. The company doesn’t appear to know when many items will actually be replenished, and where. In some cases, it sounds like large swaths of items are simply listed as out of stock. When they are listed as in stock and buyable, their shipments are delayed for months, and then delayed for months again. Redditor caitlineljo complained that an order she placed on June 7 is now scheduled for delivery on November 15. “I have matching storage boxes that I’m trying to coordinate with for our nursery,” she writes. “At this point, getting this damn boxes is harder than being pregnant during a pandemic.”
It doesn’t have to be this way
The pandemic has been a challenge to the entire retail and service industry. But most of the giant retailers have stepped up to the moment. Companies such as Amazon, Walmart, and Target staffed up rapidly to meet demand. While not without hiccups, especially in the early months of the pandemic, these retailers have adapted and are pretty dependable right now.
You see analogs in the fast food industry, too. These mega-chains realized that, with dining rooms closed, customers would be funneled into drive-throughs. They rapidly updated their practices (and also hired a lot of new employees) to handle this surge.
Food and generalized retail are a relevant point of comparison to Ikea, not just because they’re big and sell similar products, but because companies such as Walmart and Chipotle are chains that realized they needed to modernize and invest in all sorts of digital infrastructure—even though they did so later than competitors. Walmart only launched its modern online shopping site in 2018. Today, that experience is quite good. Chipotle launched its pickup and delivery app in the same year, while doubling food prep capacity in its stores to handle digital orders. Chipotle’s earnings are down versus 2019, but 10% to 20% less than you might expect. Analysts recognize that Chipotle’s digital evolution has a lot to do with its resilience.
Ikea seemed to have a similar reckoning with its digital business in 2017, but it didn’t figure things out in time for the stress test of 2020. The company confirmed that order delays are an ongoing problem under the weight of twice the online orders and new social distancing practices in warehouses.
The company also tells us that it’s working on these issues. Since COVID-19 struck, the store shifted to a new online system that lets customers track and cancel their orders. In some cases, Ikea is shipping products directly from its stores, though most larger furniture still comes from distribution centers. And they’re filling 200 positions in the U.S. to “develop our digital capabilities to address our customer and market needs” while recruiting new employees in order fulfillment. “We hope some of the changes we have implemented will result in a better experience going forward,” the company writes. “And, we promise to keep working on it.”
