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Product of the week | IKEA
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Every week I pick a tech product, spend time using it, talk to it’s customers, understand how are they growing today & recommend 3 bets that will help them grow faster, cheaper & profitable. I am doing this to sharpen my own approach. Outcome on the newsletter and everything is a big bonus :)
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Product of the week | IKEA
IKEA boasts itself as the most practical, well designed & affordable furniture & home accessories store. IKEA has a mobile app & website. For the purpose of this issue, we are going to talk about the IKEA app (better repeat purchase behaviour).
Some back story
IKEA launched it’s first India store in Hyderabad & hasn’t looked back. It’s overwhelmed with demand. For the record, it caused traffic jams in Hyderabad on the day of launch. Same goes when they launched other cities.
Considering the product has no top of the funnel problems, we are going to focus on the other problem statements that came out of an extensive (we called 20+ IKEA customers) user calling exercise.
Insane demand side equation
Every store launch for IKEA has brought in additional demand with more serviceable pin codes. For the record, their website crashed when they started delivering to Bangalore.
Lower order value on mobile app than in-stores
We spoke to users who bought products from the app and they mostly purchased items under Rs. 5,000 while those with in-store purchases were mostly above 20K. Yep, most of the users were from Mumbai & Hyderabad.
The mobile app
The mobile app is designed to make you shop more based on kind of look you want out of your living room / specific room in the house. The app does a really good job at hooking you to buy more.
Post the user calling and looking at everything that’s available on the internet about IKEA, we decided to focus on just the IKEA mobile app. That’s where growth could be unlocked from.
Problem to address
Solve for repeat purchase behaviour of e-commerce first customers
1. Push mobile app
Customers who bought from the website shows lower repeat purchase than those who bought from the mobile app.
Majority of the traffic is on the web vs app.
Push mobile app to every new customer coming from the web experience. Create different constructs to get this user to download the app right after the order is placed. Few of the levers could - free delivery on next order, wallet credit or bonus items shipment with existing order.
2. Instil repeat order behaviour
I personally have the IKEA app since 6 months now. I have never been told what new products are being launched or what should I buy next.
Most new users buy products of low average order value (AOV). This is consistent with the amount of trust they have on IKEA for large price point furniture purchases.
The bigger change could be create a house redesign journey on the app. But, an MVP could be an experiment could be the following.
Someone buys a single product → Pitch adjacent product that complements.
Example, buying a sofa cushion → Pitch curtains that complements the living room.
This does not absolutely happen on the app today. Very surprising.
3. Move users to a subscription (!)
Most users forget about IKEA as they make ~2-3 purchases a year.
Exception : The crazy buyers in Bengaluru. I have seen Bengaluru folks making a IKEA purchase every other week. This is typical with people moving into new apartments.
Do you remember which app you used a year back? Think Hard.
Now think of app you used this month?
Now think of app you used this week?
Which one is easier to answer?
That’s the point.
IKEA needs to launch / repackage something that helps them get the user to transact every month. I don’t know what that product could be but it’s going to be a low price point product(s).
Food for thought
You don’t have to do everything like a furniture company. Learning from high frequency products could be interesting for IKEA.
That’s all for today.
Like this issue?
Last week, I wrote about
How thursday app is killing it & what can we learn from it?(Link: LinkedIn)
Ohh, Last week, GrowthX fam spent the weekend in Goa ❤️
Will include pictures in the next issue :)
See you next week ✨