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IKEA constructs loyalty program with mobile in the forefront

May 22, 2012

Mobile is playing an increasingly important role for IKEA as it continues to build momentum for its loyalty program in the United States.

The IKEA Family program has been available in other countries for several years, but was not launched in the U.S. until last year. Mobile is a key part of the strategy, with employees using in-store tablets to sign-up new customers and IKEA sending out SMS alerts to keep consumers updated on new products.

“Any retailer that is not thinking about mobile is missing something,” said Tim Reilly, senior account manager at 89 Degrees, Burlington, MA. “We are looking at traffic to our various sites, and people coming from mobile devices is becoming a larger and larger percentage.

“It is important to get information to people when and where they want to use it,” he said.

89 Degrees is a marketing services company working with IKEA on its loyalty program.

Rewarding customers
While IKEA overarching strategy is focused on offering customers everyday low prices, the loyalty program is one of the ways the home furnishings retailer provides special offers.

The goal of the loyalty program is to reward IKEA’s best customers with discounts and special offers throughout the store.

The IKEA Family program rolled out to all U.S. stores last year.

By mid-May, the program had already signed up more than 1.6 million members.

Customers can sign up for the program in-store at an in-store kiosk and receive a membership card on the spot. Customers can also view exclusive discounts and offers.

There is also another way to enroll via a Galaxy Tab tablet, which store associates can hand to shoppers who want to sign up. The store associate scans a card with the tablet to activate the loyalty card and then hands the device over to the shopper to finish the registration process.

The tablet was first introduced last summer during the grand opening of an IKEA outside Denver. It has since been rolled out to all stores and is being well received, with 89 degrees reporting that stores are requesting more units and using the tablets at a growing array of in-store and outside events to sign up IKEA Family members.

Just after launching with IKEA Family in Nov. 2011, the store in Portland saw five percent of its Family registrations coming from the tablet device

“Some stores are requesting additional tablets because they are finding a lot of use for them,” Mr. Reilly said.

“We want to extend the use of the tablet in other areas as it relates to family and beyond family,” he said.

Targeted SMS messages
Customers can also sign up to receive SMS alerts via the tablet.

IKEA has had an SMS program for several years that has focused on in-store campaigns, sweepstake and real-time feedback in several stores.

The response rates for these communications are more than double those for traditional retail digital communications, per 89 degrees.

However, with the loyalty program now in place, there is growing focus on delivering targeted content specifically for Family members.

Examples of how IKEA is using SMS includes when the loyalty program was coming to the IKEA store in Seattle last year. SMS messages were sent to opted-in customers to let them know and asking them to text back with their email address so they could receive a preregistration email once the program had launched.

Additionally, customers who do not have their loyalty card with them and who want to receive a discount at the cash register, can text a keyword to a short code to receive a message with their card number that can be shown to the cashier.

IKEA is using SMS to help it tie its various communications channels together, having found that the value of customers increases the more programs they signed up for.

“IKEA wants to be able to tie the channels together,” said Laura Saati, vice president of strategic marketing services at 89 Degrees.

“We are planning to do more loyalty-specific SMS text messages,” she said.

“We certainly see that the folks in the SMS program are more active than those who are not. Because they have taken the extra step to enroll, those in SMS program and in Family are that much more valuable.”

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