IKEA Uses Geo-location Technology to Drive Footfalls to its Stores

IKEA stores are usually located outside of city centers because of the furniture giant’s ‘big box’ retail style. Geo-location technology helps IKEA entice shoppers to make the long trip to these out-of-the-way stores.

IKEA is the world’s largest furniture retailer. Mainly known for its Scandinavian style, ready-to-assemble furniture, the brand is easily recognisable all over the world with its blue and yellow big box building design. A traditional IKEA store covers an area of about 300,000 square feet on average, equivalent to the size of five football fields. Naturally, most of its stores have to be built outside of city centers.

Since IKEA stores are usually located in the distant suburbs, most shoppers do not find it convenient to travel long distances to purchase small items. IKEA is addressing this challenge using geo-location technology in its marketing campaigns to entice shoppers and drive footfalls to its stores.

‘Buy With Your Time’ Campaign

IKEA UAE was the first retailer to allow shoppers to purchase items with their ‘time’. The limited-time campaign was held in conjunction with the opening of its newest store in Jebel Ali in Dubai.

Acknowledging the fact that shoppers had to spend significant time to get to its outlets, IKEA added “time currency” prices for every item in its Dubai stores. The price was fixed based on the average wage in Dubai, which is AED 105 per hour.

To start with, shoppers had to turn on their Google Maps Timeline on their mobiles and record their trips to the store. The duration of the trip was then converted into savings. For example, shoppers traveling for one hour and 55 minutes could avail of a Billy bookcase for free. A shorter 49-minutes trip could get them a Lack coffee table, while a hotdog cost a five-minute trip. IKEA allowed shoppers to accumulate their travel time credit from multiple visits.

When customers showed their Google Maps Timeline at checkout to the cashiers, the latter converted the recorded time into currency. Shoppers could then decide whether they wanted to pay with their time or their money, or a combination of both.

By rewarding shoppers for the time they spent commuting to the stores, IKEA not only increased its footfalls but also motivated shoppers to make multiple visits for greater savings.

Mobile Ad with Geo- and Time-based Targeting

Meanwhile, in Jakarta, IKEA Indonesia faced a similar reluctance-to-travel challenge – only it was more critical due to the bad traffic conditions in the city. Although the outlet is directly accessible via a toll road, many shoppers still felt the journey would take too much time because of the traffic.

In partnership with a digital media company, Xaxis, IKEA Indonesia created a mobile ad campaign that gave shoppers the estimated time it would take them to get to its store at specific times of the day from specific locations in the city. In order to do this, the ad was programmed with geo-targeting as well as time-targeting.

Using real-time traffic data, IKEA targeted audiences at specific locations that matched the estimated travel time. The advertisements promoted items of interest to shoppers (based on consumer behaviour patterns) and displayed how much time it would take them to travel to the IKEA store at that very moment. Once consumers clicked on the ads, they were taken to the Google Maps application, which showed them the fastest route to get to the store.

The campaign reached 4.6 million people and beat its in-store footfall target by 131 percent. The ad analysis found that people who saw the ads were three times more likely to visit the store throughout the campaign period.

How IKEA Uses Geo-location Technology to Drive In-store Footfalls

Drive-time Maps

IKEA Ireland uses drive-time maps, provided by TravelTime, to customise its marketing campaigns based on locations.

A drive-time map takes into account traffic, one way streets, traffic lights, and expected delays that are unique to the start location selected. Therefore, a drive-time map is always more insightful than a distance radius map.

A drive-time map showing all the places that are reachable within a 20 minute drive from IKEA’s Ballymun store in Dublin (Image credit: TimeTravel)

With the help of the drive-time maps, the marketing team at IKEA created advertisement messaging tailored to consumers’ locations. Consumers who live closer to the store were targeted with ads about smaller day-to-day essentials. Ease of access made it likely that these consumers would visit the store more regularly. Those with a longer drive to the store were targeted with bigger furniture advertisements, as they were more likely to visit the store for specific furniture needs.

IKEA has proved that sending the right offer to the right user at the right time in the right place is key to boosting sales and customer bases. Geo-location technology, in combination with consumer behaviour analytics, will continue to play a big role in the widespread adoption of mobile-first strategy in retail.

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