With ARKit, Ikea and Apple beat Amazon to the punch — and turned AR into a true retail strategy
Apple’s Worldwide Developers Conference keynote speech in June previewed a host of new products — many of which seemed to be designed exclusively to get under Amazon’s skin. New iPads and the forthcoming HomePod were announced, but it was a blink-and-you-missed-it reference to Ikea that was designed to hit Amazon at the heart of a strategic plan to use Augmented Reality to disrupt furniture retail. As part of Apple’s announcement of ARKit, a set of tools allows developers to deliver stable Markerless Augmented Reality (AR) solutions on the iOS platform, Apple made quick reference to an Ikea application coming this fall that will use AR to allow customers to preview a selection of furniture options in context.
The forthcoming AR app is one part of Ikea’s plan to appeal to shoppers using a host of new strategies and technologies. Others include a pilot that lets customers use Virtual Reality (VR) to preview kitchens (and, for some reason, make pancakes in said kitchen), allowing third-party retailers to sell through Ikea’s website, and experimenting with mini-stores and pop-up shop concepts. But why is Ikea pursuing Augmented Reality again – and why now?
Ikea and Amazon: The future of furniture retail is Augmented Reality
It’s impossible to contextualize Ikea’s initiatives without talking about Amazon. Though Ikea and Amazon are not direct competitors at the moment (and Ikea might even be looking to partner with Amazon to sell its furniture directly through the e-commerce site), over the past few months Amazon has been making some noise about their plans to disrupt furniture retail. The company hosted a pop-up shop at the prestigious High Point Market in April, and has been vocal about using AR and VR to sell furniture to customers in their own homes.
When Amazon casts its gaze upon an industry, the leaders in that space take notice. Just ask any grocery CEO, in the wake of Amazon’s purchase of Whole Foods, whether they’re paying attention to Jeff Bezos’ retail colossus. As such, it’s easy to view Ikea’s experiments as a hunt for the retail breakthrough that will stave off a new and dangerous competitor. However, that take on the current situation is only part of the story.
Ikea has a history of innovation
The good news for Ikea is that the company has a rich history of innovation. From inventing flat pack furniture (after an employee removed the legs from a table to fit it into a car trunk back in the 1950s), to turning assemble-it-yourself furniture into the most dominant force in the market (Ikea is the largest furniture retailer in the world, and uses a staggering 1% of the world’s commercial lumber each year), Ikea is great at finding ways to appeal to and attract customers.
Remember this? Ikea was ultra early to the AR party
It’s common knowledge that Ikea has been experimenting with VR, AR and smartphone apps for years. The recently announced ARKit-based app won’t even be the company’s first attempt at AR furniture placement. Way back in 2013, Ikea went with a marker-based approach for its catalog app, allowing shoppers to preview furniture in their own homes using a smartphone or tablet. Ikea’s early AR app dabbled in fun and painted the Ikea brand with a forward-thinking sheen. It’s a cool, innovative brand and they used AR tech to amplify that brand message.
It’s one thing to cook up some quirky, attention-grabbing marketing gimmicks, but it’s another thing entirely to solve enterprise content and retail technology challenges internationally and across scale. There are 314 Ikea stores in 38 countries/territories. The IKEA Group itself owns 277 stores in 21 countries. No strangers to localization and operations, the innovation team at Ikea knows that they have to make a great app — but also that making it so is a significant challenge and that the actual AR tech is only a small part of the problem they need to solve.
How to guide: 6 keys to winning with Augmented Reality retail apps
Even with Ikea’s long track record of innovation and the fantastic new technology that Apple is offering, there are always challenges in making an app that doesn’t just work, but that adds value to the customer experience and the bottom line. For retailers looking at what Ikea (and Amazon, Houzz, Wayfair, etc) are doing with AR — and wondering how to create successful immersive Augmented Reality shopping experiences that deliver on customer expectations and enhance sales — here are 5 factors to take into consideration:
1. Speed and reliability
Whether you have over 2 billion visits to your website each year or just a few million, consumer expectations are high and so are the stakes. Consumers have very little patience for sluggish load times or apps that go off-line. Developing a quick and consistent experience is vital to creating a pleasant and resonant customer experience.
2. Realism and approachability
Graphics processing advancements and consumer gaming experiences leave little room for “fakey fake” products. If products don’t look real, shoppers will notice. Attention to lighting, reflection, textile quality and movement are key in convincing shoppers that what they’re looking at in 3D is exactly what they’re going to get.
3. Inventory planning and management
Ikea has estimated that their first ARKit app will launch with 500-600 3D product models or SKUs. But Ikea offers more than 9500 SKUs in their retail stores and adds 2500 new products per year to renew their range. These SKUs can probably be configured into tens of thousands of different combinations. While seeing random or top selling products in AR can be entertaining, it’s not useful until customers can actually see the items that they want to buy— not just the most popular items or what happens to be in the app.
4. Defined product relationships and content management
ARKit is an amazing helping hand for designers building iOS AR apps, but publishers and retailers need to provide their own content. Look for a content management system that not only hosts and manages 3D content for export to a range of platforms and experiences, but can deliver structured metadata and smart experiences that allow for geometric rendering and assemblies.
5. Efficient 3D content creation
Ikea has a team of more than a dozen employees working exclusively on 3D products. Of course, they manufacture their own furniture and can control the 3D product creation process – but producing CAD models and producing a pipeline of realistic AR/VR-ready 3D product models are different balls of wax.
6. Audience penetration
ARKit is perhaps the most powerful markerless AR implementation to come out of Silicon Valley — and if you’re on Android, you’re plum out of luck. ARKit is an Apple exclusive, as the iPhone maker hopes to use AR as a competitive differentiator that pushes its signature handset to higher profits and adoption numbers. Yes, Apple’s user base is huge (it’s estimated that 45% of U.S. smartphone users use Apple products) and known for spending money, but Apple is also sometimes considered as a luxury brand — an image that runs counter to Ikea’s more no frills vibe. (There’s no “luxury” in having to assemble your own bookcase.)
