Abstract

IKEA revolutionized its customer shopping experience through the implementation of Augmented Reality (AR) and Artificial Intelligence (AI) technologies within its retail operations. This chapter examines how IKEA Place app among other digital tools improves customer engagement by allowing customers to visualize products in real-time within their homes and deliver personalized recommendations. The combination of AI-powered personalization and AR-enhanced immersion provides customers with enhanced control and confidence resulting in stronger emotional bonds to their buying choices. The chapter examines recent research along with case studies to show how IKEA uses technology to boost customer interaction while decreasing product return rates through sustainable retail methods. The chapter examines the crucial impact of trust, perceived risk, and co-creation elements on AR-based personalization adoption. The chapter delivers a future-focused analysis of how AI and AR utilize IKEA's implementation to create interactive and intelligent retail spaces that centre around the user.