Micheal Valdsgaard ex VP Digital Transformation IKEA on augmented reality (episode 276)

Michael Valdsgaard has been in the retail industry since 1993 initially on the bricks side at Danish Supermarket Bilka, then with IKEA in both Europe and the USA where he shifted to the online retail world as Senior VP Digital Transformation leading IKEA’s shift to digital. Since 2018 he’s been helping other retailers to digitally transform with a recent focus on Augmented Reality – or AR.

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About Michael

Michael’s first job was sweeping factory floors followed by a newspaper delivery gig. When he got his first retail job, he was thrilled that it was pretty easy so he just stayed and kept learning.

Michael says he loves to engage with and help people and retail allows him the ability to do that in innumerable different ways. He never imagined that he would move from his position at Bilka doing “stack ’em high and watch ’em fly” type of retail to the nuanced and complex digital landscape he works in now. 

IKEA Building Experiences

IKEA have always been true to their customers and Micahel says that they are genuinely focused on helping people live well at home. It’s logical then that they’ve built their store environments with tangible experiences and created catalogs full of inspiration.

These strategies were more natural to figure out than the daunting task of translating the IKEA experience to a digital platform.  In 2010, IKEA asked MIchael to begin to sort through the best ways to do just that and he immediately focused on what problems they could solve and how they could enhance people’s experiences. 

Research Hibernation

Michael started digging deep into research and saturating himself in other companies who were doing well in the online space. Walmart was doing a great job at that time online, largely because Amazon had begun to significantly eat into their market share.

Michael said they were able to use those successful digital examples as a starting point and then begin building out and customizing for their own brand. Like many companies at the time, Michael says their team got distracted by all the interesting and novel technologies that they were seeing. A lot of those experiments were thrown in the bin, but they were all part of the journey to the incredible AR that IKEA has become really well known for.

Today, Michael says that technology has become so integrated that people don’t even really pay attention to it. At this point, people’s expectations are even farther ahead than the technology itself and it’s harder to keep up with all the time. 

Augmented Reality

Many technologies are overhyped and typically under-delivered. Today, a lot of people are talking about AI and Michael admits that it is certainly going to change the human landscape.

Robotics, self driving vehicles and IOT are going to become part of the human vernacular sooner than later. VR—or virtual reality is another space that is rapidly advancing and this has had a lot of benefit in areas like training and therapy.

Augmented reality, which is laying a digital experience over a real life experience is an amazing technology opportunity for retail. AR has developed to such a degree that it has become really helpful for people making major purchasing decisions online.

The technology has come so far that now people are really comfortable using it. Younger people especially, really embrace AR and have seamlessly integrated it into their shopping experience. 

Integrating AR into eCommerce

Michael’s firm, London Dynamics has sorted out how to take that AR experience and easily overlay it onto existing eCommerce experiences. Because it can be added to an existing website, AR makes sense for integration into eCommerce.

He says that ultimately even eCommerce needs to serve the best customer experience and AR can do that by being integrated into the eCommerce experience immediately without breaking a seamless customer journey. AR is applicable to many sectors, but remains most powerful in the home furnishings and accessories space.

The return on investment is highest there and Michael says that people will likely expect it by the end of the year. But any product that can be “put in the room” is a good potential for AR.

eCommerce Book Top Tip

eCommerce Traffic Top Tip

  • Share a problem that you’ve solved. Don’t try and solve problems that don’t exist.

Tool Top Tip

  • Zoom video collaboration tool

Growth Top Tip

  • Get it right. If you are growing your business but you haven’t got it right, you’ll end up alienating those new customers you get

Interview Links

Related episodes

  • Tesco’s Tamara Duschl talks brand, customer, and how the challenges are the same for a global retailer
  • Building a 7-figure eCommerce business with Sustainable Furniture’s Margaret Larson
  • Retail Customer Experience Guru Cliff Crosbie – ex Nike, Apple, IKEA – including online CX, and tracking emotions

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