Whether it’s Amazon or Alibaba, Ikea will have to work even harder to retain their customers’ loyalty in a retail world where brand names may well be quickly replaced by convenience and ease of access. Hugh Fletcher, Global Head of Consultancy and Innovation, Salmon looks at the challenges facing Ikea.
Ikea’s ‘test’ to sell flat-pack furniture through third-party providers is unsurprising given how digitally-inherent customers now expect convenience in their daily shopping experience. The rise of digital services has disrupted the sector entirely, and is encouraging more and more brands to take on an omni-channel strategy that realises partnerships of this ilk.
Ikea’s potential alignment with Amazon makes sense given that the Seattle giant continues to show that immediacy is king in the retail world; Prime completely changed retail and showed customers that they can have what they want with little waiting time.
Whoever Ikea aligns itself with, it will be a coup. Why? Because it is evidence that even some of the biggest global brands are using the interfaces and infrastructure of big market-place providers to develop their omni-channel strategy.
This type of partnership may open the floodgates for other brands and service providers to jump in too. But jump in with caution they must. Whilst a partnership with a market-place gives access to customers, experiences and logistics, it removes a direct relationship with the brand. With this is mind, Ikea will have to work even harder to re-retain customer loyalty.
There is no doubt that the supply-chain logistics and overall operations will be complex, albeit simplified by a partnership with an existing ecommerce powerhouse. Developing a complete ecommerce offering will allow Ikea to reach into a previously untapped market.
Looking beyond online, innovation will play its part in separating the very best from the rest. It has never been so crucial for retailers to evolve their business. Online has rapidly become the platform of choice but entirely new services such as Programmatic Commerce and Zero-UI connected devices like Google Home will soon become the norm. Retailers that embrace this kind of innovation will ultimately be the ones that succeed.”
By Hugh Fletcher
Global Head of Consultancy and Innovation