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How IKEA, Kmart and Philip Morris are Shaping the Future

In an era of rapid change and shifting consumer preferences, three global retail giants – IKEA, Philip Morris, and Kmart – illustrate how established companies can drive innovation and transformation within their industries. In the second edition of the Accelerating Retail online event, we explored how these brands are adapting their strategies not only to meet but to anticipate modern consumers’ needs.  

IKEA is focusing on building an omnichannel presence and on sustainability, Philip Morris is pioneering a transformative shift toward a smoke-free future, and Kmart reinforces its commitment to operational excellence through Lean principles and a strong focus on customer-centric operations. Together, these companies illustrate the dynamic approaches needed to thrive in today’s fast-evolving retail landscape.

IKEA’s Omnichannel Evolution and Sustainability Efforts

IKEA has been widely recognized for offering affordable design and home furnishings.

Identifying shifts in consumer behavior, IKEA has been transitioning from their well-known large-format stores to embracing an omnichannel retail strategy that includes smaller, more accessible urban locations and an enhanced digital presence. This strategic pivot allows IKEA to offer greater convenience and cater to the increased consumer expectation for integration between online and in-store shopping experiences.

“The customer journey is now purely omnichannel,” emphasized José Luís Rivas, IKEA’s PMO and transformation manager in Spain. He highlighted the adaptability of the company’s retail strategy, which reflects the shift toward seamlessly integrating various consumer touchpoints.

IKEA’s commitment to sustainability – which has been part of the company’s ethos from the beginning but is now more critical than ever – is further anchoring its modern strategy. Efforts include optimizing product designs for environmental friendliness, improving supply chain efficiency to reduce carbon footprint, and striving toward energy independence.

IKEA aims to power its operations entirely with renewable energy and make all its products from renewable or recycled materials by 2030.

These sustainable initiatives reflect a comprehensive approach to environmentally responsible practices, which resonate deeply with today’s eco-conscious consumers.

Philip Morris’s Strategic Transformation Toward a Smoke-Free Future

Philip Morris International is navigating one of the most significant pivots in its history, moving away from manufacturing tobacco products to embrace a smoke-free future. This shift reflects a broader strategy to align with health-centric trends and respond to the growing demand for safer, non-combustible alternatives. The transition involves an extensive overhaul of their product lineup, introducing smoke-free alternatives that significantly reduce the concentration of harmful chemicals compared to cigarette smoke.

“We need to be omni-channel; it’s not an option,” Robert Southern, Phillip Morris International’s Global Head of Retail Operations & Technology, said about the need for a robust direct-to-consumer framework that complements their new product lines.

This transformation extends beyond products and into how the company engages with consumers. Philip Morris is enhancing its direct-to-consumer operations, ensuring interactions are more personal and digitally integrated. This includes a robust B2C model with branded retail locations and an expansive digital ecosystem to provide customer support and product education.

Kmart’s Lean Operations and Customer Focus

Kmart’s adoption of Lean and Kaizen methodologies in their operations underscores their dedication to operational excellence and customer-focused innovation. The retailer focuses on foundational stability and emphasizes the importance of designing processes in “Gemba,” where real value is added. This approach ensures that practical and beneficial improvements are directly where they’re needed most – in-store operations.

By prioritizing tasks adding the most customer value, and involving employees in processes’ design and refinement, Kmart enhances operational efficiency and employee engagement.

“Our extreme focus on tasks that add value for the customer fundamentally drives our operational strategy,” highlighted Fábio Oliveira, Kmart’s Head of Innovation, on the dedication to prioritizing customer satisfaction through streamlined operations and thoughtful process design.

Their strategy underlines the importance of stability before digitization, advocating that without a stable base, digital enhancements could simply amplify existing inefficiencies.

Kmart’s approach not only boosts its operations’ effectiveness but also builds a culture of participation and ownership among staff. This ensures that changes are embraced and positively impact both the employee and customer experience.

In conclusion, IKEA, Philip Morris International, and Kmart show that even well-established companies can radically redefine themselves to align with contemporary values and consumer expectations. IKEA’s emphasis on providing a seamless omnichannel experience and prioritizing sustainability initiatives demonstrates a comprehensive understanding of modern consumer needs. Meanwhile, Philip Morris’s bold move toward a smoke-free future is a proactive response to global health trends, emphasizing consumer well-being over traditional product lines. Kmart complements these strategies by embedding Lean principles into its operations, focusing on stability and customer-centric process improvements that directly enhance the shopping experience.

Together, these strategies underline a crucial lesson for the retail industry: success hinges not just on reacting to changes but on anticipating and shaping them. By embracing innovation and sustainability, IKEA, Philip Morris, and Kmart are not just adapting; they are leading the way in their respective fields, setting new standards for what consumers can expect from brands.

Explore the discussions and insights and learn more about how these industry leaders are crafting the future of retail in the full recording of the Accelerating Retail second edition!