Ikea : Case Study

IKEA was founded in 1943 in Sweden by Ingvar Kamprad. With over 400 stores in 52 countries, it is the biggest brand in the Furniture industry.

Brief statistics for ikea.com according to SEMRush

- Organic traffic: 185.9M (worldwide)

- Major countries: United States, Germany, France, United Kingdom

Quality products, affordable prices, and customer value are big reasons for IKEA's success. Cost-effectiveness is one of the strong bases of IKEA's stay among its competitors. As per Statista, the leading selling countries of IKEA products in 2021 are as follows.

Here are 7 growth tactics to steal from ikea.com and implement in your online store.

1. Wishlists/favorites page

Ikea offers a wishlist feature that allows customers to create personalized collections of products they want to buy and save them for future reference, indicating interest in a product without an immediate intent to purchase.

The tactic of wishlists for eCommerce stores, using Ikea as an example. Wishlists/favorites page can improve the customer experience and provide valuable insights for sellers, such as measuring the effectiveness of marketing campaigns.

Using wishlists to alert customers about sales is an effective way to encourage them to complete their purchases and make them qualified leads. This tactic highlights a feature of Ikea's website that allows shoppers to save items to their wishlist and share it with others, potentially driving more traffic to the site.

2. Compare at prices

This tactic is all about what the "compare at price" is in online stores. It is the original price of a product that appears crossed out or shown next to the discounted price during a sale. This helps customers visualize the difference between the current and original price and how much they would be saving.

In ikea website, you will see a comparison of the prices of some products. Mostly you saw a promotional description: "new lowest price" and valid till as shown images in below.

In the above example, they are selling a wardrobe for $199 with a compare at price of $229. Apart from implementing two classic pricing tactics, 

1. Compare at Price
2. Charm Pricing 

In their sales copy, "We lower prices where we can," IKEA is building trust along the four pillars of trust, according to McKnight and Chevarny's famous research, What is Trust? A Conceptual Analysis and an Interdisciplinary Model, termed as BUMPER — benevolence, integrity, competence, and predictability.

Instead of simply stating that they have discounted a product, IKEA is communicating their benevolence and integrity by implying that they are passing on cost benefits to their customers. They are also demonstrating competence by positioning themselves as capable of offering high-quality products at the best possible prices in the minds of their customers. Additionally, by saying "We lower prices where we can," they are conveying predictability and encouraging customers to anticipate price drops. This reframing of the product as the result of IKEA's brilliance in cost reduction, rather than as a slow-moving item, further reinforces their competence and predictability.

All of these measures help increase both conversions and customer lifetime value. They also provide IKEA with the pricing power to launch a product at a higher price and then reduce it if it does not sell well, preventing dead stock.

Use Konigle's Bulk Price Editor tool to easily add or edit Compare at prices on your online store. Here is a brief video tutorial that demonstrates add or edit compare at prices on your online store step-by-step. The video will guide you through the process, from the initial to the final stages of execution.

3. Charm pricing

A study that found using "charm pricing," or pricing products with figures ending in odd numbers, can increase sales by an average of 4% compared to using "rounded" price points.

The concept of charm pricing is the psychological phenomenon where people are disproportionately influenced by the left-most digit of a product's price. In the below image from ikea.com, you saw product prices end with 9.

The type of rounding used for online stores may depend on the products being sold and the industry. It suggests downloading a study on charm pricing from Konigle Sellingnomics for more information.

Use Charm Pricing Seller Tool from Konigle to implement charm pricing on a Shopify store for all products automatically.

4. Limited-time offer

Ikea’s marketing strategy of creating scarcity and FOMO (fear of missing out) through limited-time offers with discount prices. This tactic induces anticipation and buzz among buyers, resulting in a boost in IKEA’s sales.

It may come as a surprise that IKEA offers an even cheaper section where items are priced way down, known as the "Last Chance to Buy" items. This collection primarily consists of discontinued items that are either being replaced by newer models or were poor sellers.

As you can see above, the Last Chance deals let shoppers know that items under this collection are older products to be clear to make way for newer ones. This helps prevent dead stock and boosts sales.

Konigle's Bulk Price Editor tool can be used to schedule draft products to become active at a designated time and create email and SMS campaigns to inform subscribers of an upcoming launch or easily create limited-time offers like IKEA’s.

5. Membership offer discount

This appears to be about the IKEA Family program, which offers an exclusive 5% off every visit every day to IKEA's customers, including special offers, free in-store perks, price protection, and more. It’s free to join, and you’ll be saving in no time.

This is the best tactic of Ikea, which creates a sense of exclusivity, community, and personalization in its members, contributing to and strengthening brand loyalty. When customers are rewarded with discounts and special offers for being loyal to your brand, it shows them your appreciation and also encourages them to continue shopping with you. We suggest that other stores could learn from this tactic.

What is Ikea Family?

Ikea Family is an amazing loyalty program offered by Ikea, a fantastic multinational home furnishings retailer. It provides numerous benefits to its members, such as incredible exclusive ikea family discounts, special offers, and access to exciting member-only events.

By joining the Ikea Family, customers can enjoy a wide range of perks and privileges that greatly enhance their shopping experience. Ikea Family members receive personalized recommendations, exciting product updates, and inspiring ideas to help them create their dream home.

Maybe now you have a question about how you can steal this tactic. Do so by rewarding your loyal customers when you create customer-based price rules with Konigle's Customer-Based Pricing tool!

One way to increase customer loyalty is by rewarding them with discounts and special offers. This not only shows your appreciation for their business but also encourages them to continue shopping with you.

You can easily implement this tactic by using tools such as Konigle's Customer Based Pricing. With this feature, you can create customer-based price rules that offer discounts to your loyal customers. By doing so, you can attract new customers while also retaining your existing ones.

6. Deadstock prevention

The clearance section lets shoppers know that certain items will be discontinued and will not be restocked in the future. This helps prevent dead stock and boosts sales.

Marketing tactics can be highly effective in boosting sales and reducing the risk of dead stock. One method that has proven successful is the use of clearance tabs or Last chance to buy, such as the text near buying button of the product Ikea's website.

Not only do these Last chances to buy draw attention to specific products, but they also create a sense of urgency for potential buyers who fear missing out on a good deal. By implementing tactics like these, businesses can increase their visibility and appeal to customers who might otherwise overlook their products.

To implement the Clearance Collection Strategy on your Shopify Store, you can use the 'run flash sale' tactic or Konigle's bulk price editor tool. These options are provided under the pricing power strategy. Through the bulk price editor tool, you can edit selling prices, add tags on discounted products, and display them on the Clearance Collection Page.

7. IKEA Dubai Buy With Your Time Campaign

Much like the popular sci-fi movie “In Time”, IKEA Dubai lets their customers pay for goods with their time. The “Buy With Your Time” campaign allows customers to spend their time as a currency, simply by showing IKEA checkout staff their Google Maps timeline, which proves how much time they've spent travelling to the IKEA store. So, the more time spent traveling to IKEA, the more you can purchase at the store.

As customers usually spend an inordinate amount of time travelling to IKEA outlets due to said outlets residing on the outskirts of towns, IKEA has added “time currency” prices which are based on the average Dubai salary for every item in its Dubai stores. This incentivises potential customers to visit IKEA more frequently, which in turn will ultimately encourage them to buy more goods.

Overall, not only is this campaign a very unique marketing strategy, it also showcases IKEA's innovation and how much they value their customers’ satisfaction.