Patricia Fresno has been working at IKEA Spain for seventeen years and is responsible for the digital hub that the Swedish company opened in Madrid in 2020. Ms Fresno leads a team of more than a hundred people dedicated to the digitalization of the entire group, not just the Spanish market.
In this conversation with Madrid Investment Attraction, she describes the change that the pandemic brought to their business and how they have speeded up their digital transformation since then. She also claims that Madrid is “an important innovation hub, full of emerging companies with a lot of digital talent”.
M.I.A.: IKEA has been in Spain for more than forty years. What does the Spanish market mean for the company, in terms of business activity?
P.F.: Spain is one of the five countries in the group that have grown the most. It is the third in growth, only behind the United States and Russia. The other two are China and Italy. It is a powerful market. At this time, sales are very satisfactory and we are very proud of what is happening in Madrid.
The world economic situation and the commotion in the Russian and Ukrainian markets have had a great impact on all of us. In the end, this affects all countries. But we cannot complain about our results. At the end of August we will close the fiscal year and, for the moment, we are happy.
M.I.A.: How many employees do you have here?
P.F.: Last year we had 9,854 people working for the company; an increase of 906 workers compared to the previous year.
M.I.A.: What has the pandemic meant for the company, bearing in mind that furniture was one of the sectors that experienced the most growth?
PF: It caught us off guard. In the first wave of the pandemic, when stores had to close, we had to adapt to the new situation and sell online. It was an explosion that forced us to transform: what we would have done in four years we did in a matter of weeks. We were not prepared. We had difficulties dealing with those purchases, but it helped us to approach the online business in another way.
Now we don’t work alone. To deal with this increase in online sales, we work with a wide network of external suppliers. The products are not only delivered from our stores, but also from distribution centers. We don’t just sell from our stores either: we use delivery points, as well as reaching customers’ homes.
It seems trivial, but we have had to work really hard because the stores were not prepared to handle this increase in sales. In the last year we have doubled their capacities to deal with online purchases.
M.I.A.: Has this growth stabilized or is it still increasing?
P.F.: We are still growing and we continue to work, looking for improvements. We are aware that there is still room for improvement in many areas and the need to adapt is constant: improving the platform, trying to increase our capabilities and delivery times and working hard on zero emissions. This is a crucial aspect: between now and 2025, 100% of the last mile deliveries will be zero emissions.
M.I.A.: What are you working on in terms of sustainability?
PF: On last mile deliveries. We want to increase zero emissions deliveries by 20% by June of next year and continue until we reach 100%. It is an important challenge. Work was done on the packaging to change all the products wrapped in plastic. That was done from our HQ, not from Spain. And we are expanding our delivery points. There are two new ones in Madrid: one in Núñez de Balboa and another in Embajadores.
In that sense, we are working on different store formats. We started with big blue box stores on the outskirts of Madrid but we have expanded the concept. We opened a store in Goya, there was another temporary one in Serrano and we have recently opened in Las Rozas to aid online sales. We have opened more planning spaces to be more accessible. What are we doing there? Not all product samples are on display, everything is more virtual. You can see the furniture and design the kitchen and the rooms.
M.I.A.: In 2021 you opened your digital hub in Madrid. What does this hub consist of?
P.F.: We opened it in September 2020, although we publicized it in 2021. We were caught up in a pandemic. We set up the digital hub working from home, although we have had an office for a month. We are in a reorganization process, to see how we will work in the future. We are still working with a hybrid model.
M.I.A.: Did you plan to create the hub before the pandemic or was this a consequence?
P.F.: It was planned but then everything slowed down. The idea came from Sweden: to be more transversal, to find out what was happening in the markets, the company decided to open four digital hubs, in India, Philadelphia (United States), the Netherlands and Madrid. All four hubs were decided at once.
M.I.A.: How is work distributed between the four hubs? Do they all depend on Sweden or do you have a horizontal structure?
P.F.: They are offices that work for Sweden, where the headquarters are. We are divided into business areas. In Madrid, at the moment, we focus on what we call business and venture: B2B development, the IKEA Food and the customer experience in store divisions. But we do all the strategy with them.
M.I.A.: How many people work in the Madrid hub?
P.F.: Today we are 110, with the goal of reaching between 150 and 200 employees. This is not set in stone: circumstances change. What is certain is that the Madrid hub is very attractive. It is an important innovation space. Madrid’s business fabric is full of emerging companies with a lot of digital talent.
M.I.A.: Do you work together with the IKEA offices in Madrid?
P.F.: We are two different units. In addition, there is a digital department in Spain. But we encourage what we call togetherness, i.e. working together. At the hub we focus on the development of digital solutions for the whole world, while the digital department in Spain focuses only on the Spanish market. But being in Madrid, it is true that we also work on the Spanish market. Because that knowledge exists and we can work together easily.
M.I.A.: Why did you decide to open the hub in Madrid?
P.F.: From the point of view of IKEA globally, Spain is a very innovative country. We have always tried to improve processes, to explore different working methods. Moreover, Madrid has a lot of emerging companies in the technology sector, as well as a lot of digital talent. We see that when we launch new processes. Madrid is a hotspot of digital talent.
M.I.A.: Did you consider other cities?
P.F.: Yes, but in all our analyses Madrid always came out top.
M.I.A.: What kind of professionals are you looking for? Is it easy to find them? What percentage of Spaniards and foreigners work in the hub?
P.F.: The workers we have are very good. We work in four areas. The first is product design, where the strategy and the product needs are established and candidates with specialized skills in digital products, such as product owners or product managers, are sought. Then there is product development: computer and telecommunications engineers who have not only studied engineering, but who also have the skills to develop a digital product. Then we have UX and UI design, which make the app accessible. And finally, the data analysts, who constantly analyze and extrapolate data.
We have workers of various nationalities. There are people from Latin America, Morocco, Sweden, Italy… But percentage-wise it is a very Spanish center.
M.I.A.: How is this hub going to evolve in Madrid, where do you see yourselves in five years? And IKEA in general?
P.F.: In the digital world it is difficult to make long-term forecasts. We want to continue growing and betting on the Spanish market and our hub. As a site manager, I take risks to increase our opportunities to do business, because I think we have great potential.
M.I.A.: Are you in touch with the Administration in Madrid, be it the City Hall or the regional government?
P.F.: At the hub we have not had any contact, but other areas have been in touch. We have been here very little and we have not been able to make ourselves known more in that sense.
M.I.A.: What selling points do you think the administration should emphasize about Madrid to attract international companies like yours?
P.F.: I would focus on diversity. In the digital world, the presence of women is still below the average. And not only women, senior workers are also under-represented. We must bet on wisdom: although the future belongs to the young, we must not forget our older workers.