Event Recap – IKEA’s Approach To Marketing Intelligence

AMA Tampa Bay welcomed Mary Lunghi, IKEA’s Market Intelligence Director, as its featured speaker at the Centre Club on April 21st. Ms. Lunghi provided the more than 100 attendees a look at how the global furniture company uses consumer research and analysis to shape its customer journey.

IKEA’s beginning and why having an outside-in vs. inside-out perspective about customers is critical.

IKEA was founded in Sweden in 1943 by Ingvar Kamprad. The name “IKEA” was formed from the founder’s initials plus the first letters of the farm and village where he grew up.  The company’s core idea is to offer a wide-range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.

Ms. Lunghi shared a story about the company’s entry into the U.S. market in 1985. She admitted that the first opening in Plymouth Meeting, PA didn’t go well. IKEA learned quickly about the differences between European and U.S. consumers. For example, U.S. customers wanted larger bed sizes and actually bought vases as glasses because the drinking cups were too small.

Mary Lunghi IKEA AMATampa Bay April 2016

As she described, the company at that time took an “inside-out” approach by applying their knowledge of European needs to the U.S. Had they better understood the U.S. consumer’s perspective from the “outside-in,” their launch domestically would have been more successful.

Today IKEA invests in multi-level, consumer research and analysis to drive all aspects of their business.

IKEA conducts research and analyzes data on four levels—Global, Regional, Local and Personal—with a key requirement that all research must be actionable. These efforts help guide all aspects of the business from store locations to hiring practices to showroom design to product development and to other functional areas.

Ms. Lunghi provided an example of a Global study, named Life@Home, and demonstrated how the results were applied to the company’s product development efforts.

Life@Home included respondents from eight cities across the globe. The primary research question was: What do people need to start the day off well? Sample insights were that 46% of Londoners were worried about waking up late, 37% of New Yorkers put out clothes the night before, among other related city findings.

IKEA then seeks to find commonalities and differences in this data set that can lead to actions. The “a-ha” moment with the Life@Home study was that people generally like to plan what they are going to wear the night before. This drove the product teams to develop furniture that made it easier for consumers to layout their clothes prior to the next day.

As Ms. Lunghi also noted, the company goes deeper to find actionable insights down to the regional, local and personal level. She provided several other examples for the audience that reflect their focus on keeping aligned with consumer purchase behavior.

In the U.S., IKEA conducts quantitative research across DMAs looking for insights about the home—size of the living spaces, does the family recycle, what types of home improvement projects, etc. Living space findings for example help IKEA account for different showroom design needs between markets such as Brooklyn vs. Tampa.

Other research efforts include an online panel named “IKEA Insights Community,” selfie research where IKEA super-fans provide direct video feedback, and an ethnography study that sought consumer insights on IKEA’s loyalty program.

Ms. Lunghi concluded by sharing IKEA’s work to improve a customer’s path-to-purchase experience, which is often not a smooth or even journey. People for example have a hard time visualizing new furniture in their homes prior to making a purchase. The company’s answer was to develop augmented and virtual reality tools to help alleviate some of this purchase stress.

Consumer research and analytics are an important part of IKEA’s effort to shape its customer journey. Using multiple methods to collect and identify insights allows the company to continue delivering on one of its key principles, “To create a better everyday life for the many people.”

By Blake Pierson

BPierson Photo

Blake Pierson is a marketing and operations’ professional with over two decades of ad-agency and digital-media industry experience. He has had career stops at Wieden & Kennedy, DDB, AOL, and most recently at Catalina Marketing in St. Petersburg. A snapshot of Blake’s background includes having developed strategic advertising plans for clients such as Nike, Subaru, Holland America Line and Microsoft; and responsibility over AOL’s premium ad solutions for the company’s O&O web-sites, which were sold to Fortune 500 advertisers. He has been an AMA Tampa Bay member since January 2016, and is a digital content volunteer for the chapter.