Ikea describes itself as a global retailer whose brand reaches millions of hearts and homes, united by a unique philosophy and approach.
Joining me today to share how that philosophy creates customer loyalty is Penny Shaw, the Global Loyalty Manager for Ikea.
Penny shares some of the initiatives that have emerged from deep customer insights to increasingly recognize and reward members of the Ikea Family program, not just for their transactions, but also for other ways they interact with the brand.
As well as this innovation, Penny also explains the background and proposition for the brand-new Ikea Business Network – another entirely new concept, targeted at supporting the needs of small and micro business owners around the world.
Welcome to Let’s Talk Loyalty, an Industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas, and if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.
This episode is brought to you by Collinson Worldwide Leaders in Loyalty, creating and orchestrating loyalty initiatives and programs for some of the world’s biggest brands in travel, retail, and financial services. Doing it globally for over 30 years. Want to know more, go tocollinsongroup.com.
Hello and welcome to episode 323 of Let’s Talk Loyalty, and my first interview of 2023. Firstly, thank you for joining me again to listen and learn, and I can promise you that Let’s Talk Loyalty is going from strength to strength. We have some incredibly exciting ideas and interviews lined up for you in the months and the year ahead.
I’m particularly excited to be back today with IKEA from my first episode of the year. As it’s exactly two years since I also had IKEA as my guest, as my first interview of 2021. IKEA describes itself as a global retailer whose brand reaches millions of hearts and homes united by unique philosophy and approach.
Joining me today to share how that philosophy creates customer loyalty is Penny Shaw, The Global loyalty Manager for IKEA. Penny shares some of the initiatives that have emerged from deep customer insights to increasingly recognize and reward members of the IKEA family program, and not just for their transactions, but also for other ways they interact with the brand.
I actually think this approach might be a world first in terms of the really thoughtful approach to create and reward customer loyalty, step by step, supporting each customer’s journey with the brand rather than waiting until they buy something to reward them. As well as this innovation for the IKEA family program.
Penny also explains the background and proposition for the brand new IKEA business network. Another entirely new concept, targeted at supporting the needs of small and micro-business owners around the world. Thank you again for joining us today, and please do enjoy my conversation with Penny Shaw. Global Loyalty Manager for IKEA.
Paula: Penny Shaw, welcome to Let’s Talk Loyalty.
Penny: Hello. Good afternoon.
Paula: Ah, so good to have you here, penny. It’s actually, would you believe two years since I’ve had IKEA on let’s Talk Loyalty with your former colleague, Aaron Mitchell. So great to have you on the show now so we can get an update in IKEA Family.
Penny: Lovely to join you and yes, so time’s flying.
Time’s hugely flying since Erin left us. Yeah.
Paula: Absolutely. My goodness. So Penny, you have an incredible career in loyalty and I know you’re doing some fabulous work with IKEA. Uh, but before we get into talking about all of your latest ideas and insights and propositions, as you know, we always love to kick off our show, talking about our guest’s favorite loyalty programs.
So, I know you’ve had a bit of time to think about this Penny, so please do tell us what is your favorite loyalty program or programs?
Penny: Well, yes, I did actually struggle to narrow it down to just one. So I’ve chosen two, which are at different ends of the spectrum actually. Okay. One is, um, kind of new. It’s uh, a company called Ole and Steen, which is a Danish bakery that’s now available in London as well.
And it’s a nice, simple app base program, you collect points with your everyday bread shopping and then you can redeem the products, but it actually works cross border. It works in Denmark as well. Really nice simple proposition. Beautifully executed and you know, often service loyalty programs don’t work very well cause the frequency isn’t there.
This one actually does work really, really nicely. So I think it’s a, a lovely, handy every day sort of app that gives me rewards back. Yeah, but, but then we go to the other end of the spectrum, and my other favorite loyalty program is British Airway’s Exec Club with Avios. I’m absolutely obsessed with collecting Avios, with making sure I get my tier points.
I use my BA AmEx, wherever I can. All everyday spending goes through the AmEx as possible. Yeah. And if I can’t manage to use AmEx because the website doesn’t take AmEx then I’ll use PayPal to make sure I can still pay my AmEx card. So all of that everyday spending is mounting up for me. And then I think the thing I love about Avios, although it’s not, always the easiest to use and the easiest to find. The redemption flights when you do the reward that you enjoy is truly memorable. You know, there’s lovely unexpected holidays that you get that are mainly on avios are just such a treat that they really, really make it worthwhile.
Paula: Honestly. Penny, I couldn’t agree more. Um, I did some work with Avios myself. I dunno if you know that, um, I. , there you go. In the Irish market now. So quite different to you. Um, and I think I was after you, and again, mine was only for about a year or so, but honestly once I got my head around exactly that, you know, the redemption levels and exactly how, once I paid attention, I guess to how it works, uh, it’s exactly like now, for example, of course I live overseas, so it’s not the same program, but like that on Friday I’m traveling on a redemption flight because I have behaved myself all year. I’ve done my loyalty junkie thing, and I can hear Penny, that you are really paying attention and being loyal to the British Airways Executive Club, the AmEx card, which can be, I think, quite difficult to use in the UK so I’m really thrilled to hear it’s working for you so well.
Penny: Yep. It is, and it’s, it’s, that common thing isn’t, it’s such a great reward when you get it that it’s worth delving through the complexities.
Paula: Totally, totally. But I also take your point as well about the bakery Penny, because I think there is an awful lot to be said about simplicity.
And to me that is a core principle that through so many of the loyalty programs, I think we all work on. You know, we’re trying to make it so compelling and yet we have. So many stakeholders involved that I think sometimes the bigger the company, the more complex the program can be. So, um, I can see you nodding away there.
So obviously the, the Danish bakery totally nailed that one, huh?
Penny: Absolutely. I, I really think simplicity is so important for the customer. Yeah. I think you, you’re right that when you have businesses with many elements, we need to cover this. We just make sure this is part of it as well. Yeah. It just becomes unwieldy and not easy to understand.
Um, and the, the bakery one, it’s just simple, easy, and it works.
Paula: Beautiful, beautiful, great stuff. So listen, uh, you have a fascinating career, um, in multiple markets across, uh, various loyalty businesses. Um, so maybe, if you don’t mind, Penny, just take us through some of the loyalty, um, propositions you’ve worked on, the various brands you’ve worked for, even before we get into IKEA I think you have one of the most varied loyalty careers I’ve seen, in fact, so it’s incredible.
Penny: Thanks. Yes. A few different brands. Uh, just before I was IKEA, I was working with Sky On Sky VIP. Okay. And there we needed to create a whole new loyalty concept from Scratch for Sky.
Yeah. There was a challenge around, um, keeping existing customers and making sure they were happy. And didn’t you? And we had, um, pretty much a blank piece of paper to start with. And in less than year, we created Sky VIP, and the real, um, the really exciting part about that was we said that the only currency is time.
So the longer you’re with us, the better it gets. So we rewarded customers for not the amount of money they spent with Sky, but how long they were with Sky. And then when we launched the program, we automatically put people into the, the tiers for the tenure. They. So for customer Biman Sky for 15 years, they went straight to the top tier.
Yeah. And then we created and curated all the amazing experience and content that only Sky could do and shared those with the customers. We shared tickets and we had many, many, um, free cinema tickets to give away as well. Yeah. All of that for free to the customers. So there was nothing to pay and it didn’t matter how big or how small your bill was with Sky, you could still enjoy Sky VIP and all those lovely benefits.
So that was great fun to work on. Um, and I think quite, quite new and innovative, for the industry.
Paula: Uh, for sure. Penny. I was going to say I still don’t think I’ve come across any other program that has really identified and recognized and rewarded tenure because there always seems to be all of the other elements, and we know loyalty is here to drive profitable behavior, of course. But you know, I do remember, actually, you reminded me. The very first time I worked on a loyalty program was within the telecoms industry, and I remember a friend of mine going, well, hang on a second. I’ve been a customer there for 10 years and nobody’s ever thanked me. So there you are. I mean, Skye have really nailed that with the VIP program.
It’s, it’s so compelling and so customer led. It’s incredible.
Penny: Yes. It was a really good program to work on. Uh, yeah. And, and before Sky, um, I worked, I did work with, uh, British Airway’s Avios for a while. Yeah. Uh, I also worked in South Africa with Pick n’ Pay. Ooh. Which is, um, one of the largest grocers in South Africa.
Yeah. And then we were part of launching Smart Shopper, which is a more of a traditional grocery rewarding program. But it was great to see loyalty, um, starting South Africa and help Paick n’ Pay understand their customer data for the first time and create the first segmentation to really give them an insight into who their customers were and what they needed.
So that was very, very interesting to work on. Before that, I was sort with Nectar for a little while as well, so working with many, many different brands who use Nectar as their loyalty currency. So got to see it in lots of different industry sectors, how loyalty worked for them.
Paula: Okay. And now about four years from what I can see on your LinkedIn profile.
So you’re the Global Loyalty Manager at IKEA, a program of incredible scale, and, uh, at the same time, I think beautiful simple proposition to, to go back to our point earlier, so. Would you maybe tell us a bit about the history of the IKEA loyalty program, Penny? Because I know there is a lot of variation in different markets, of course. Um, but the scale of what you do, and I suppose the integrity behind it is always super impressive. So tell us a bit about the program just overall.
Penny: Certainly. So yes, we’ll IKEA just on four years now and manage IKEA Family and also IKEA Business Network as well, which is our new program we can talk about in a bit.
Ok. But yes, IKEA family, our beloved, uh, customer loyalty program has been in around in different iterations for many years. But, um, in the last couple of years we have got a more, a common approach to IKEA Family and we have a, a set of rewards and benefits that are common in all markets right now. But we identified some challenges we said this is a good basis to start on, but it’s actually not enough to engage customers on every interaction. And we found that not all customers were identifying all the time. So we needed to do something new. So we have actually created recently a, a new rewarding concept. And that is just going live now in our second market in Italy.
So we’re live in Italy, Portugal now. But that’s been quite a journey to start from concept, right. Going through to execution of that new loyalty concept.
Paula: Wow, super exciting. Penny and Portugal and Italy. Um, I’ll be dying to hear exactly what you’ve launched there, but give us a sense of the global scale of the, of the family program.
Penny. Just, you know, in terms of the, the basic program that is live in every market.
Penny: We have just on 180 million members now, so it is a significant member base. Yep. Wow. It’s really huge. huge. So it, yeah, it’s a really big program, but we think we’ve still got a lot more opportunity there because we find not all of our members will swipe.
So let’s say in two years maybe in just our over half of our members will actually swipe and identify. Yeah. So we see a really big opportunity to make the program even better, more valuable. Yeah. More rewarding for customers so we can get that deeper level of understanding of our customer’s needs and knowledge.
Paula: So tell us a bit about this, um, this new proposition that you’ve talked about, Penny. So you’ve launched it, as you’ve said in Portugal and now in Italy, and I’m sure you have a, a long roadmap ahead, but where did you start? I’d love to just get an understanding of, you know, how did you, um, identify what else was needed in terms of layering on top of the Family proposition?
Because I do think, you know, that the concept, for example, of things like, you know, the free tea and coffee and there’s some very, um, simple and compelling benefits that family has always been famous for. So how did you go about finding that what layer on top of that.
Penny: It is worth saying actually that we keep all those benefits, we keep those as the foundation.
Yeah, absolutely. The tea and coffee won’t go away. It’s a really important point. We need to make sure we communicate that to our customers, that we’re not taking anything away. We’re only offering more value, so absolutely. tea and coffee in the IKEA Family prices will remain Okay. Um, in the markets. Yeah. But what we did is we started, um, actually again with quite a blank sheet of paper.
We knew we had our, our great Family Club with many millions of members. Yeah. But, um, we, and we needed to do something more, but we weren’t sure what that was. So we actually partnered with Frog, um, our innovation agency partner. Okay. And so a couple of years ago now that we actually started, we started by um, partnering together with a number of countries with our markets, bringing together all the data we already have in our IKEA Family members.
And then really starting to think about what this new concept might be. And then we actually started ex. Experimenting, let’s, we’ve narrowed down into a, a, a suite of potential concepts that it could be. Um, based on the insight, we then started testing. Um, we created, um, fake brands on Facebook, for example, so we could test different versions of a concept to see which appealed to customers more.
And so by narrowing down on the insight and testing, Yeah, we came towards the proposition that we, we ended up selecting, but obviously being in many markets, it’s uh, quite a big risk to go and launch something new in a whole market. Yeah, so we did a small beta trial in a couple of markets. We tested in two stores in two of each country, so two in Sweden, two in Spain.
It was a closed beta group test, so only invited customers could join, and we explained that it wasn’t gonna be a perfect experience, but they were helping us co-create the future of IKEA Family. Actually that worked really well. Customers were really happy to work with us and co-creating feedback. Nice. And they gave maybe some of the, the things that weren’t perfect.
we created something that for customers, looked pretty reasonable on the face of it, but actually in the backend we had, I like to call it string and cell tape. You know, we had Excel spreadsheets and , not all of the, the right solutions in the backend, but enough so that we could test the concept in reality of customers and also have a control group so that we then became comfortable once we’d got the measurement and the evaluation of that test.
We have some good, solid numbers to, to base our evaluation on. Yeah. Unfortunately that happened during Covid, so we went live as Covid went live. Oh gosh. So we ran those tests. Yeah. It was not good cause Spain and many of the stores closed in Spain during the test period. Yeah. But Sweden did stay open for, um, the whole time.
So at least we had some data there. We actually ran the, the test longer than we originally pla planned. But to get that robust data, we did need to, to run it for nearly double the original plan time. Wow. But at the end of that, we closed that trial, but we had some really good results to share back to the business.
So, , we understood what we would do in terms of, um, the sort of harder commercial measure measures, so increasing ATV and ATF, but also the softer measures. Do we get greater engagement with, um, planning tools within IKEA, et cetera. So we’re able to share those solid results for the business. Yeah.
And then use that as a platform to move forward to touch, touching, pilot in whole country.
Paula: Amazing. And just so I understand, understand your acronyms Penny ATV Average Transaction Value, and I’m guessing ATF is Average Transaction Frequency? Yes. Perfect. Okay. I’ve never worked in retail loyalty, so just, oh, sorry.
We all have a language, I think particularly from things like our airline days and, and Avios, for example. Oh, absolutely. I know there’s so many days to us acronyms. Yeah.
Penny: So do you know what was, what was interesting with the, um, the pilot? We actually found that we were looking to increase both Average Track Transaction Value and Average Transaction Frequency, we wanted them both to go up. Yeah. In the pilot we found that, um, the Individual Transaction Value went down a little bit, but the Average Frequency went up more than enough to, to justify that and gives the total value being, um, an uplift actually, that that was only for the pilot.
Once we’ve, uh, we’ve gone live now, we see, um, increases in both.
Paula: Okay. Okay. And tell us then about the new proposition then, Penny. I know you talked before that essentially you’re not just rewarding transactions, you are rewarding interaction with the IKEA brand and some of your other tools. So I’m fascinated to hear what you’ve, uh, built and launched.
Penny: Absolutely. So this was really driven by customer insights and we had a number of really strong insights, uh, from our customers. Um, and some of them were around, um, home confidence many of our customers will struggle with home confidence. Of course, you have the people who know exactly what they want and they’re happy to go and buy, but many customers will, see a need or a problem in their home, but really not be very confident about how to fix that and how to move down the purchasing journey from the initial understanding and need to actually being happy to make that purchase. And, you know, 500 jurors plus, that’s a lot of money for people to commit if they’re not so confident.
Yeah. So we know that we’ve got many tools to help customers in terms of building confidence. We have, um, workshops. We have many, many planning tools, you know, kitchen planners and wardrobe planners, so we can really help customers. So we want to be able to bring those tools to our customers and really help them with the confidence so that they feel happy to make that decision.
And we understand actually, The more, uh, complex purchases are naturally planned, but even some less complex purchases are also planned. So it could be a simple refresh of a living room or a bedroom can also still be a planned purchase when you think about ’em together and you plan how your new living room’s gonna look.
Yeah. And we want to be part of helping customers to, to make those plans. And we understood from, um, a behavioral economist that helping people shift from initial acknowledgement of a need right way through the journey to making an action, making a purchase in this case is a really challenging peak journey for people to go on. So to give you a different example, if I say to you that, oh, I’m feeling a little bit stiff and maybe I should do yoga. Do you think I’m gonna do yoga this week? Probably not. No. But if I say to you, I’m feeling a little bit stiff, I think I should do yoga, and I’ve checked online and I’ve found a class and it’s a Thursday at seven o’clock and their space is left, then it’s much more likely I’m gonna take that action. And in that way, with home furnishing, we can help people move down that journey to knowing what their plan is to solve their home furnishing need. We’re part of that planning. We’re part of that journey, then it’s actually much more likely we’ll come to top of mind when they do to come to make that purchase.
And we can actually help them, yeah, go through all the different options and come to their decision. So the concept’s really built on customer insight. And then what we’re doing, as she said, is we’re gonna recognize spend as should expect, but it’s not all about spend and IKEA because we are for the many people.
Um, with a thin wallet as well. It’s not all about money. So we spend, we are rewarding spend bands. So from zero to 50 will be a certain number of reward keys, and then from 50 to a hundred, so more reward keys and on through. So you go, so when you spend much more, you will get some more keys, but it’s not all about spend.
Okay. And also acknowledge engagement. So when customers perhaps log on or create a wishlist or attend an in-store event, many different engagement interactions, we will also re reward, reward with keys there as well. So in terms of the earning concept, um, they’re called Reward Keys from IKEA Family. And we, we give those keys for transaction and direction.
Then in terms of how you spend the keys, it’s for the help that you as a customer need to bring your dreams at home to life, all sorts of different helpful services IKEA has. So it could be, um, delivery, home delivery, or help with assembly at home, volunteer design, consultation. So many of those helpful services.
But what we actually found during the trial is not everybody has a project on all the time. There may be times ago customers, I thought they’ve just completed a number of projects, they don’t have anything in mind just now. So then we also included some, um, food rewards that might be lovely, lunch for two or fe of two in store.
Yeah. Or it could be a, a project reward if there’s that final, um, accessory you want to finish off your room, that could be a product reward as well. And that was, some of that was developed as part of the learning from the very first test.
Paula: Amazing. I love the inside Penny that essentially to go from a problem in my head, in my home to through to solving that problem.
Because we all know how beautiful the experience is shopping in IKEA when you know what you want, but when you don’t know what you want, honestly, you’re right. It is a pain point. So to be able to, as you said, take people on that journey and and give them the confidence, I think that’s a really lovely word.
And I don’t think I’ve ever heard it used in the loyalty industry before with such depth of understanding and I suppose the handholding is what I’m hearing that again, a bit like a family, like you’re there to support people you know along, you know what, they don’t know what they need, but they trust you to guide them from what I’m hearing.
Penny: Absolutely. We have so many tools, it’s how do we bring those together for the customer? Yeah. So many different tools and plat and ways, and to help customers. So much depth of knowledge. We want to bring that to our customers. Totally. So it helps us to know where they are on the journey so we can offer other helpful tips and help and information.
Yeah. So we can really move them along the journey. So we, yeah, we’re really trying to bring together, yes, the best of IKEA to our customers, but in a way that’s relevant for them. What is the task that they are worried about at that moment?
Paula: Great. And just to clarify then, you mentioned keys. So is the, is that essentially a currency, uh, essentially a points-based currency or, no.
Penny: It’s absolutely not a currency. Okay. That’s why. It’s a token. Yeah, A token, I could hear there was a difference there. So brilliant. So, so tell us why you went with a token approach Penny.
We didn’t want to copy the many of the retail schemes out there and go for points for Euros or kinds, we wanted to do something that was uniquely ikea.
Okay. That was based on our, our heritage and our brand. Lovely, so unique for us based on deep customer insight of our customers and their challenges. Yeah, so it’s a token of rewards. So we, we award these tokens, they have no cash value, but then they’re exchanged for the many different types of help that IKEA can offer our customers to bring their homes, their dreams, at home to life.
Paula: Lovely, lovely. Thank you for explaining that, penny. Because yes, I mean, clearly we talk about points a lot on this show, but I do often feel that there is a lot of jadedness around the concept of points. You know, even though we know clearly, for example, when it comes to Avios or the well-established ones, it’s incredible.
But there is downsides to a currency. And when I think about my own career building programs, to me that was always a really big question. Do I want a currency? Do I want to, to get over the jadedness? Into, you know, with the upside of course, because it does have a level of understanding. But, um, I like the idea that you’ve come up with this token, so certainly be keen to, to hear how that evolves for you.
It’s brand new in market. Am I right? When did you launch in Portugal, Penny? It was the first market, wasn’t it?
Penny: Yeah, Portugal was at first market, um, at the end of January this year. So it is all still quite fresh and new. Amazing. And we’ve only just gone live in Italy. So Portugal was our partner market actually from the very start, so they participated in the whole concept generation. They were our partner right along the way and it was brilliant to, to work with them first. Cause again, they were very much co-creating with us. We’ve been building this as we go, and unfortunately, a brilliant partner telling us what they need from the market perspective to make this work.
Amazing. Yeah, it’s great to have them. And then we have, Italy is our next sort of bigger market, so we’re moving to the scalable solution now where we can manage to supply and manage all of our markets.
Paula: Absolutely. Yes. Clearly. With a brand like yours, you need to go quite carefully in terms of the rollout to make sure that you don’t topple the technology along the way, when you know you discover
Penny: Yes, you’re right. The volumes, of course, will get so much bigger from Portugal to Italy, and then to add on all the other many countries. Yeah, we have to make sure we have a robust, scalable solution.
Paula: For sure. The other key piece I wanted to ask you about, Penny, and this is going back actually to, uh, to chatting with with Aaron, and that was actually again, January, 2021. Hard to believe, but at the time, again, Aaron talked a lot about, you know, I suppose the core values of IKEA and things like customer insight, which I’m, I’m loving hearing coming through your work as well. And one of the early ideas, I know it was very much, I think still in a trial phase, and I actually think it was with Frog as well, cause when you mentioned your innovation agency, I remember he really enjoyed working with those guys. And it was this whole idea around community and so many people, Penny, I think as loyalty program owners, realized the potential for community but haven’t yet managed to find a solution in order to, I suppose, essentially allow the members of their program to engage with these with each other in meaningful ways.
And Aaron was, was trying to develop a solution in that space. So I’d love to get your insights. I think there’s been a fair bit of progress on that, so I’d love to hear your thoughts on that one.
Penny: we worked with RGA actually, um, another one of our partner agencies on, um, a concept, we called it Clubhouse or KlubbHus, um, in Swedish.
Yeah. And we, we had a really good trial that ran in the UK running clubhouse, but it was actually external to, um, Ikea digital ecosystem. So it was a little bit more of a test and it was brilliant. We learned an awful lot during KlubbHus and one of the biggest things we found is how active we as the brand, as IKEA needed to be to keep the conversations going.
We found that we, we got some great engaged IKEA family members coming in and, and talking a little bit, but the conversations didn’t flow naturally between members. As much as I think we we’d hoped or thought they would. Yeah. So, um, I really felt like we were almost like a party host where we needed to continually introduce people to each other and introduce topics and say, Hey, you know, how’s your hallway looking?
I think you’ve got some great tips you could share. So we really had to do a lot of work to stimulate the community and put content in there to, to get the conversation going. So, so we’ve learned an awful lot with KlubbHus and it was really interesting. We did actually end close that trial down. Okay. And that’s now morphed. We do have a community actually active, within the IKEA system, uh, ecosystem there, which is live in the UK and Canada, which is actually taking longer lessons learned from KlubbHus as well as, um, some more sort of practical tips on, um, how to build furniture, et cetera. So we are now piloting that club, that, uh, community concept ministry markets.
Paula: Yeah, amazing. It’s funny because even I suppose, you know, from a personal perspective, you know, I’m a content creator and so many times people would say, oh, you need to create a community. And I know even from a B2B perspective, how much work goes into. You know, cultivating, supporting, leading, and driving. Like, it’s actually, I think, a full-time job, .
Penny: Yeah, I completely agree. Actually, that is one of the challenges. Yeah. You really do need to dedicate a team, yes. Uh, to thinking about the content, to making sure you’ve got things ready to, to almost have a calendar, but then to be ready to respond with the more topical, relevant things to respond to what’s going on in the community.
So absolutely. It’s a full-time job and, and I think that’s one of the things we learned. It needs to be, if you’re gonna have a successful flourishing community, it will need ongoing, um, input from the brand.
Paula: Yeah. Yeah. And I do think it can obviously get there over time. I think we’re all familiar with, you know, whether it’s Reddit or you know, some of the really big communities online, but I think brands definitely struggle.
Um, so yeah, I think there’s a lot of work to be done. So definitely want to watch and super keen to hear how your, your latest trials go as time passes. The other key topic we wanted to talk about today was your new business proposition, Penny. I know you’ve got some incredible customer insights as well, and I’m guessing now, I could be wrong with this, but I’m guessing this possibly became a bigger priority for IKEA coming through the pandemic.
Because I do think there was a lot more demand for IKEA products and services, certainly for me, in terms of building a home office, for example. So maybe tell us a bit about, uh, what, uh, what you’ve built with the, with the, the business, uh, customer in mind.
Penny: Certainly, yes. Um, actually we had started this just before the pandemic, this whole concept with, um, amazing. Businesses. We did identify a great opportunity to work with, with B2B generally, but particularly with micro and small businesses. So we, we focused this initiative around businesses with zero to 50 employees to give us, um, a bit more of a target. Um, but absolutely Corona only, um, enhanced the need for that and the need of solutions for so many more people, um, to have that home office experience. So yeah, definitely. Many times we said if only we’d had this live already before the pandemic, then it would’ve been great. But yeah, so we started, and again this is something quite sheet of paper because we wanted to create something from scratch. Completely directed at these entrepreneurs. So we did some great work actually again with, with Frog and with RGA, to delve into and understand the insights for these micro small businesses. And we got to, got to know some customers. It felt like quite personal though. A lot of this was happening during Covid, so again on teams, on Zoom, et cetera. But we met a lot of small business owners to really understand their challenges and needs, and we found that there were some real insights that hit home with us, and one of them was about a real lack of time.
People who run small businesses have this massive drain on the resources. They’re passionate about one particular thing, but they’re running a whole business and really a lack of time can lead to missed opportunities. And we, a lovely lady who ran a restaurant in Japan and she was so passionate about running her restaurant and she was watching the dishes, and coming outta the kitchen and then going back in again to see what was being eaten and what wasn’t. So she could plan the menu for the next day. Yeah. But she’s so involved in the business that she had no time for family or friends, so she really had a massive lack of time. Yeah. And uh, also small businesses are so dependent on people. People are really, really important for small businesses, but they can sometimes struggle to attract that talent versus a bigger corporate business, which will have all of the lovely benefits that you might expect of how does a small business compete with those bigger corporates to attract and retain that talent.
Okay, so lots of really good insight. Another one is actually about the way small businesses want to run themselves. Not all of them are about massive growth. They’re not always about 10x every year. It’s really about how they want to live their lives. Some people are passionate about the topic and actually to make a, a good living for themselves.
And that’s their definition is enough to manage the business well. That’s what they want. Yeah. So, um, we decided, we came up with a concept which had sort of three pillars and the three areas we felt that we could partner with their help, small businesses were around business, running their business more efficiently.
Around space as you expect from IKEA how could we help them make the best of their space? Yeah. Um, so around people, uh, and then also yeah. About people. So how could we help them with people perks? So say big corporates can offer you things like discounted gym membership or life insurance, those sort of perks, how could we help these micro small businesses also access some of those people perks? So we have the three pillars of the club and uh, we called it IKEA Business Network. Okay. And, uh, if it’s okay, I’ll just, I’ll share the customer value proposition for you. Cause I, I, I think that’s, please. freezes life well, yes. So it’s a, it’s IKEA for business Customer Club is for everyone who seeks greater control over their business. We inspire and empower members to create a better life at work through our services, communities and knowledge to enable them to nurture growth on their terms in a journey filled with unknowns.
We give members the support to keep doing it their way. Oh, so it’s really about supporting businesses to grow in the way that feels right for them.
Paula: Well, I’m a micro-business Penny, and that makes perfect sense to me. Um, you know, and I remember actually you said last time we spoke as well, Penny, that you know, some of the insights was around, you know, being a micro-business can be actually quite a lonely place to be. Yes. So, so to have a brand like IKEA trying to connect us as micro-businesses because we are a tiny little business of course. Um, I think that’s a lovely initiative. Is it available globally, Penny, or where is that in terms of rollout around the world?
Penny: It is rolling out as we speak. So we’re in, yeah, we’re in 15 markets there.
Ok. We just went live in the US uh, couple of weeks ago. Ok. I’m very proud about that. So that’s a big market for us. So yeah, we’re in the process of rolling out, so we started with our mvp, uh, so right now it’s the mvp, it’s called IKEA Business Network. And actually we want to grow some more in the networking areas. So we want to create more opportunities for businesses to come together. Both digitally and physically. So that’s one of the next things we’ll be looking at with the network, is to actually create more networking opportunities, but we also have a task to do to roll out to the rest of the markets as well.
Paula: I was going to say, because networking can be, you know, I suppose again, to our point about community can also be quite time intensive in terms of nurturing and supporting, again, a little bit more feasible from a B2B perspective. So amazing to hear that that’s on the intention and on the roadmap. Yeah.
Cool. My goodness. Well, listen, I think that to me sounds like all of the, the latest initiatives, um, in terms of your global rollout. I know it’s an extremely busy time for you with that, to such huge initiatives and I dunno how many countries actually operate in total Penny, but you know, to get all 180 million people bought into, I suppose the interaction piece, understanding how IKEA can support them, as you talked about in terms of their journey along the way to make sure that their home is the place that, uh, that it should be. And again, the micro business proposition, it’s, it’s all super fascinating. Uh, very inspiring. Um, and yeah, I’ll be really excited to, to stay in touch and to hear how it evolves over time.
So I guess my final question for you is, Is there anything else that you’re thinking about either in terms of, you know, future trends? We hear a lot about, you know, so many things on this show, Penny from, you know, web 3.0 to subscription models, or is there anything else that you are suppose reflecting on as a loyalty professional that you think that our audience need to be thinking about?
Penny: Yes, we are certainly thinking about future developments. I think everything that I’ve talked about so far is really what we see as a bit of a foundational basic to create those great relationships with both our business and private customers, and to have enough data to really help them and serve them in a relevant way.
But that’s really just a foundation for us to, to build on top of. What we’re thinking about for the future, for, for private customers, we’re thinking about how can we be more helpful, more frequently, so how can we engage in everyday life, people’s everyday needs. So that’s a another area we want to look at.
And also broader around the home. How can we help people create a better everyday life in a broader sense of the word? So when we have this foundation, we see many, many opportunities to help our customers. Even more adjacent spheres around the home and about around better living. And yes, of course, we’re also thinking about new membership models.
We’re thinking about, I think, the baseline for IKEA is we are for the many people and we will always have our free membership, free membership open to all. So both IKEA Family and IKEA Business Network are absolutely free to customers. Okay. But we could see an opportunity in the future where we might have paid for additional elements.
So just for example, we were thinking about people moving home. Could we, we as IKEA help people with the whole home, move with the packaging, with the boxing, with the logistics, with the traffic section, that could be an opportunity area for us. Yeah, and, and that of course will be a paid service, but it’s on top of all of the value you get from your membership already.
Paula: I love that Penny because I might have to move house quite soon. So definitely a pain point. You can be our first test. Yes, happy to be the UAE, uh, beta customer. Um, but I think what that’s doing as well, Penny, it’s, it’s beautifully leveraging the trust in the IKEA brand because otherwise when I do have to pack up my home and move, you know, it’s a case of find a man with a van.
and that all of the risk and the concern associated with that, whereas IKEA clearly cares about my furniture and cares about my home. So I do think that sounds like something that for sure I would be happy to pay for. In fact, I’d be relieved to pay for it. So you’ve got my vote of confidence.
Penny: That sounds brilliant.
Paula: Thank you . Brilliant stuff. Penny. Listen, is there anything else you wanted to mention? As I said, you’ve got such incredible work going on, uh, across the consumer proposition, the new business network and as you said, thinking about, um, other opportunities to expand your services, uh, based on thoughtfulness and every day. I think that’s a really nice strategic insight. Is there anything else you wanted to mention for our audience before we wrap up.
Penny: I think that the last thing for me is that we do need to keep it innovating. We need to keep going, keep pushing forward. There’s a massive task that we have to, uh, logistically deploy what we’ve already created, but we also need to keep looking to the future.
So keep on innovating, keep on thinking, keep on experimenting, and absolutely sometimes failing, but better to fail, experiment and learn than not to move on. So, Keep on innovating.
Paula: Well said. Penny Shaw, I have to say Global Loyalty Manager. Thank you so much from Let’s Talk Loyalty.
Penny: Thank you so much. It’s been great run.
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