Ikea services foray boosts loyalty and sales

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Photo from: Techspot.com

(Source: Inside Retail Asia | February 13, 2019)

Ikea is turning to services to increase turnover and boost engagement with customers.

Moreover, partnering with specialist companies in such areas as delivery and assembly allow it to focus on product design and sales, leaving post-checkout experiences in the hands of specialists, rather than committing its own staff and training resources.

An example of the new Ikea services initiative is US odd-jobs app TaskRabbit, which Ikea bought in late 2017. Ikea recommends the service to customers who lack the time or patience to assemble their own kitset furniture products.

Ikea reports that the number of jobs handled by TaskRabbit staff since it acquired the business had doubled and 10% of the jobs undertaken are now assembling kitset furniture – five times the pre-purchase rate.

Since the acquisition, TaskRabbit has expanded coverage to all 48 US cities with an Ikea store, launched in Toronto, Canada, and expanded in the UK beyond London.

In Hong Kong, where few customers own cars, Ikea now offers both a delivery and assembly service with fixed fees according to location. Previously, it partnered with an app-based third party contractor.

In Australia, Ikea has partnered with Airtasker and in India with UrbanClap, to offer assembly services.

Reuters describes the Ikea services strategy as “a major strategic shift that it has been forced to adopt to stay in the game as waves of new competitors in an increasingly online world erode its dominance”.

Jesper Brodin, CEO of Ingka Group, which owns most US Ikea stores, says TaskRabbit’s customer data could also help Ikea come up with new ideas for furniture.

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