IKEA is experimenting with a new system: Letting customers pay with time.
This app-driven prospect measures out how far customers need to drive to the IKEA and then doles it out in the form of discounts. And, if it works, it could change the way that some more distant companies are able to attract customers.
Why is the home furnishing brand enacting such a bold experiment? Let’s take a closer look.
IKEA Dubai Wants to Encourage Customers to Come In
The promotion is going to be rolled out first in Ikea Dubai, and then may be spreading elsewhere from there. Customers will be able to use Google Maps to show how much time they’ve spent traveling to Ikea stores, and this can be converted to currency that can be used at the IKEA Dubai location. So, for now, it’s a limited rollout in a specific place.
This rollout is going to encourage people not only to go longer distances for their IKEA goods, but also to go to IKEA locations more frequently. Potentially, they may find themselves picking up more occasional home goods there than other places because they are being rewarded.
Rewarding customers for coming in builds loyalty and retention. Even though some discounts may be given out to the customers, this is outweighed by the benefits of bringing them in more frequently. Further, customers may be inclined to spend more money because they feel that they’re already getting a good deal. Whatever the case, IKEA should see the results shortly and be able to tell whether this type of promotion is ultimately successful.
Google Maps a Necessary Addition
Lost in this could be the fact that customers need to be okay with being trapped on Google apps, something that people have pointed out could set a dangerous precedent. Customers are increasingly becoming familiar with the idea of being tracked on apps, but this is one of the first uses by a major company intent on tracking where its customers go and rewarding them for the journeys.
And it may be one of the first steps to a more integrated world. In the future, businesses may be able to engage customers by asking them to perform other tasks in the real world, or give them additional discounts for actions that they’re already taking in real life.
When this data is protected, it may not be a problem. But there have been security issues in the past with similar tracking apps, such as apps that recorded cyclists’ runs. When hacked, they can give a full detail of where someone is, where they’ve been, and where they’re likely to be in the future.
IKEA has always had some issues with distance, as there are many areas that IKEA can’t service. As a cheap furniture retailer, shipping costs can be more expensive than the items themselves. If this rollout works, people may see it spreading to IKEA stores worldwide, and may feel a little better rewarded for their journeys.
