The side business of selling meatballs and ice cream to customers who came to pick up furniture has grown so big that it can no longer be run the old fashioned way.
A Swedish furniture and home goods manufacturer was starting to offer snacks at attractive prices as a side business to increase customer loyalty. The first restaurant in IKEA was opened back in 1960, but only in 2006 the company created its own brand of food products IKEA Food. And today this direction has turned into a multibillion-dollar business, and the logical step for the company was to introduce the latest digital technologies into the food inventory management chain in its network.
It is planned to start using common digital supply chain management schemes for furniture and food products, with a special focus on food storage management systems. The company also plans to collect data on pricing, orders and the movement of products in its stores and subsequently apply artificial intelligence technologies to process them and build more efficient business processes.
The technologies being implemented will include digital dashboards where workers can see forecasts of influx of customers, information about cooking times, staff movement, and more. When preparing orders, data on available semi-finished products and the quality of products will be immediately available to the chef. And too much waste in any restaurant will immediately attract attention and allow for quick action without waiting for official reports at the end of the month.
IKEA is partnering with developer JDA Software Inc. to create food management software. Work on a digital platform for the food division, which will manage the range of products, time and volume of deliveries and sales, has been underway since 2019. The new system is planned to be launched in the fall of 2020, the first test period will be held in the IKEA chain in Croatia, and then the platform will be implemented in all retail outlets of the chain.
The company plans to lead a real digital revolution that will affect all aspects of the food division. Similar technologies are already being used in the management of the main furniture business. At the same time, costs will be reduced, waste will be reduced, and digital technologies will be used to unite all the chain stores into a common network, despite the fact that there are still hundreds of outlets that manage their restaurants in IKEA using spreadsheets or even without using computers at all. .
IKEA's restaurant business today accounts for approximately 5% of the company's retail sales, with sales in this area totaling around $2.37 billion in 2019. The company sells more than a billion meatballs alone per year.