IKEA in numbers
- UK sales up with 8% year-on-year growth to £2.1bn
- Globally, sales sales grew 5% in the same timeframe
- IKEA also grew its market share in the UK to 9%
There’s a leading edge of retailers making bold, unprecedented moves.
If you think ‘store concepts’ are merely about asymmetric store layouts, popup stands and interactive visual merchandising, think again.
IKEA are taking 2020 by the horns with a store concept that goes beyond reinventing the physical shopping space attacking instead the core business model, product pricing, and buyer spend psychology.
Forget ‘store credit’… why not ‘buy with your time’ instead?
‘Time is money’… literally
Conscious of the ‘out of town’ locations of their stores, and the ‘inner city’ demographic of their core client base, IKEA are anticipating the market trends and doubling down on giving customers better incentives to make the trip to stores outside of town.
The concept is very straight forward—customers covering larger distances to reach stores are able to simply show IKEA teams Google Maps timeline to prove how much time they spent travelling.
Customers literally get to spend their time as currency—with “time currency” prices added for all product ranges. The incentive is being rolled out across all Dubai stores only, initially, so it’s clear that IKEA are recognising the risk in going so far left-field and are right to limit the strategy to monitor and prove the wider potential.
Th move has been timed to coincide with the opening of the new Jebel Ali store and is aimed at encouraging more frequent store visits so that they can clock up more IKEA travel time to cash in. Customers need not even purchase during their trips—and will still be able to bank the time to cash in next time.
READ MORE: Forget ‘online vs offline’: ‘Future of Retail’ will be more about ‘collaboration’ than ‘competition’.
Shopping offline by getting online…
At face value, the ‘buy with your time’ offering seems just a clever way of enticing shoppers to spend more time travelling to IKEA stores. Look a little deeper and you realise it’s actually more significant—because shoppers have to prove their travel times with Google Maps route logs, it means they first have to record their journey digitally to generate their ‘time-currency’ for payment. This is important as another example of high street retail dovetailing with online incentives to create novel store concepts that drive footfall.
Fashion retailers are also combining online/offline concepts to stimulate renewed excitement in customers used to browsing apps over browsing isles—Burberry, Adidas, Puma and Louis Vuitton are just a few of the many examples of retailers developing game-led brand concepts. In doing so, they’re upgrading and nurturing the brand image in the minds of consumers increasingly willing to turn their backs on brands failing to show the same innovation.
Buddying up with games developers won’t be the ‘outside-the-box’ approach that will work for everyone… but what’s beyond doubt is that an ‘if it ain’t broke, don’t fix it’ mindset just won’t cut it in the face of increased demand from customers for who new experiences are becoming a paramount feature of purchasing habits.
The thinking should be… ‘if it ain’t broke, don’t fix it—make it better.’