Iris > Case Studies > Translating Analytics into ROI: A Case Study on IKEA's Family Loyalty Program

Translating Analytics into ROI: A Case Study on IKEA's Family Loyalty Program

Applicable Industries

Telecommunications

Applicable Functions

Sales & Marketing

About The Customer

The customer in this case study is IKEA, a multinational conglomerate that designs and sells ready-to-assemble furniture, kitchen appliances, and home accessories. IKEA is known for its modernist designs for various types of appliances and furniture, and its interior design work is often associated with an eco-friendly simplicity. The company operates in numerous countries around the world, with a significant presence in the US market. The challenge faced by IKEA was to tailor its global loyalty program, IKEA Family, to the US market in a way that would resonate with American consumers and encourage participation.

The Challenge

IKEA, a multinational conglomerate known for its ready-to-assemble furniture and home accessories, was faced with the challenge of tailoring its global loyalty program, IKEA Family, to the US market. The company aimed to make the program a primary vehicle for capturing customer data, developing insights, and activating sales through data-driven marketing. The challenge was to create a value proposition that would resonate with the US market and encourage participation in the loyalty program. This required a comprehensive understanding of customer behavior and preferences, which could only be achieved through the analysis of vast amounts of data from various sources.

The Solution

To address this challenge, IKEA implemented a data capture strategy that combined transaction and customer information from over 20 sources, resulting in billions of data points. The company used analytics for segmentation, modeling, and a proprietary personalization engine to gain insights into customer behavior and preferences. Custom tech solutions were developed to support the IKEA Family program, including an in-store kiosk, digital wallet, member website, and many more. These solutions allowed IKEA to run over 100 targeted campaigns per year, each designed to engage customers and encourage participation in the loyalty program. The use of personalized communications, driven by the insights gained from the data, provided a sales lift compared to other communications.

Operational Impact

The implementation of the data capture strategy and the use of analytics for segmentation, modeling, and personalization resulted in significant operational benefits for IKEA. The company was able to gain a deeper understanding of its customers, which in turn allowed it to tailor its loyalty program and marketing efforts to better meet customer needs and preferences. The use of custom tech solutions, such as the in-store kiosk and digital wallet, enhanced the customer experience and made participation in the loyalty program more convenient and appealing. The ability to run targeted campaigns based on the insights gained from the data also improved the effectiveness of IKEA's marketing efforts, leading to increased customer engagement and sales.

Quantitative Benefit

Lifetime value of IKEA Family shopper is 4 times that of non-members
Communications outstrip industry benchmarks by 1/3
Personalized communications provide a sales lift of 7% compared to other communications