IKEA's Online Inventory Problem: It's Here, But You Can't Have It

Right before the 2011 holiday season went into ultra-intense mode (in November), IKEA Canada made a key change to its mobile and E-Commerce product availability system. Like many warehouse operations, IKEA crams an awful lot of merchandise into its stores, with much of it dozens of feet in the air, accessible only via forklift.

Under the old system, the site would tell customers that an item was in-store when it was at that store, not differentiating between a product at a lower level and one at a higher level. The problem: Because IKEA safety procedures prohibit forklifts from being used when customers are in the store, customers would come in to purchase their reserved sofa or table, only to be told that it can't be accessed and that they must return some other day. That's annoying in almost any situation, but the nature of IKEA's stores in Canada means that customers often drive two or more hours to get to a store. Yeah, that problem then goes way beyond annoying.

Under the new system, said IKEA Canada spokesperson Madeleine Löwenborg-Frick, a product is shown as available only when it's truly available for the customer to pick up and take home that day. It also displays a 4-day window for that availability, which will flag to the shopper when the item would be available for pickup.

IKEA's product availability is much more detailed than many other retail sites, especially for mobile. It not only indicates availability, it specifies the number likely to be available on each day. For example, when we looked up a specific coffee table, it said 12 pieces for May 16 and 21 pieces for May 17, 18 and 19. (An unusual color coding indicates the system's confidence in what it's reporting, with green indicating—according to the site's wording—"available at your store," yellow signifying "most likely available at your store" and orange meaning "small chance of availability at your store."

Even better, the site flags the theoretically precise location of the item. The coffee table we looked up, for example, will be in aisle 22, bin 19.

IKEA refers to the product being anywhere in the store—available or not—as "in the building." When it's in the racking way high up? That's called, logically enough, "up in the air," Löwenborg-Frick said.

Given the geography issue and store distances in Canada, the ability to accurately know if a product is available for pickup is more critical than it is for some other countries: About 7 percent of all IKEA customers check stock before venturing out to a store, Löwenborg-Frick said.

This issue came to a head this month, when IKEA chose IKEA Canada as one of three countries to roll out out the new IKEA mobile app on May 2. (Interesting stat: Ten percent of all traffic to IKEA Web sites in March 2012 was from a mobile device, said IKEA Canada President Kerri Molinaro.)

IKEA is taking its inventory seriously. On weekdays, online availability data is updated every 90 minutes, a figure that is cut in half—to 45 minutes—on the weekends. But the inventory stats are not solely based on total units delivered minus POS sales data. Associates using handhelds look for broken merchandise and other issues and update inventory in real time.

IKEA has always positioned itself as the store that crams as much inventory as possible into a small space—its clever Web campaign last month made that point in an unusual way. With its new mobile app, IKEA is at least giving shoppers a better chance of actually bringing a product home.