You have a bolt-on problem. And its not with your furniture.
You have a classic business model challenge — the kind that happens when you try to bolt-on a new value proposition to your core business, without the right capabilities and operating model to deliver on that promise.
First, you should know me:
- I design and test new business models at the Business Innovation Factory. You might say I’m a business model junkie.
- I’m a customer. Like many of your customers, I became addicted to your DIY cheap proposition in college. I would travel to your VA location with a few items in mind, and walk out with hundreds of dollars of pretty artifacts that I never knew I even needed!
- My husband and I populated two apartments with your clean, Scandinavian aesthetic. (I just recently painted a dresser I bought 15 years ago!)
- My funky design firm has IKEA written all over it.
But when I needed you, you failed. I have two kids and a new house. I needed furniture. And I’m not married any more. Which, surprisingly, handicapped my ability to go to your store and get furniture. I went online and prepared a shopping list. I rented a U-Haul, and I drove an hour from Providence, RI, up to your store in Stoughton MA (despite several online reviews suggesting it’s a safer bet to go to New Haven CT…. 120 minutes away. Do you pay attention to customer reviews? Might be worth checking out.).
Strike one: I couldn’t translate my IKEA shopping list into an order.
That’s when I also discovered I couldn’t pick and load two beds, two drawers, two desks, a couch, a sofa, and few a sundry items by myself. A few willing staff offered to help piecemeal, but couldn’t help me the get entire order. OK. That’s not part of your model, so I get it. My bad.
That’s when I discovered you offer same day/next day delivery and home installment. BOOM. I’ll pay for that! Because we couldn’t pull up the shopping list, we spent an hour manually inputting the items into a home delivery order. That’s cool. Dude was super nice. I opted for delivery on Oct. 20, organized myself to work from home. BOOM. Everybody is excited.
Strike two: My order doesn’t show up on Oct. 20.
I call your 800 number and wait on hold for about 20 minutes, at which point the customer service rep informs me that: She talked to someone at the store. My order was never pulled from the store shelves and the third party distributor wasn’t notified. Someone from the store would call me back within two hours and arrange for a new delivery date and time.
Strike three. Nobody calls me back.
When I call the 800 number again, I am informed that they can’t talk to the store yet, and that they will create a case number. Best I can do is call the 800 number again at 10 am, and they might be able to get someone from the store on the phone. Which I do.
I am now waiting for someone to call me back sometime before 9:13 am, Oct. 24 (which is the 76 hour expectation) to schedule a delivery. Who knows (certainly not me) when the delivery and installation will actually happen.
Tears, frustration, worst customer experience ever (well… you might be tied with USAirways).
But, here’s what I want to tell you:
You have a business model problem.
Not with your core business. Your core business is awesome:
Pretty, well-designed, inexpensive furniture. Low-cost delivery model, wherein customers fulfill their own orders (transportation and assembly). And $29 billion euros in annual revenue is great.
Then, you “bolted on” a home delivery and assembly value-add. It was a good thought — specifically if you want to serve adults like me, and more specifically, an older market. But the execution stinks, and it doesn’t reflect what works in your core business.
Consider how you could make this bolt-on add actual value:
Most importantly, continue to put customers in charge. This works so well for you. Don’t take this away because you are adding delivery and installation. Engage me in the wait, and enable me to see where things stand. Create an app that allows me to choose my delivery date, let me see when my order gets pulled from the shelves, when it’s loaded onto a truck, and and when it’s out for delivery.
Don’t… make me guess or make me call to find out where things are. ESPECIALLY, if you’re never going to be able to give me a good answer because of issues with third-party integration.
Which brings me to my second point:
Your product is awesome because it is modular. Rely on this design principle in your value-added services. Unbundle your delivery and installation, and again, put the customer in the driver seat.
Problem #1: You don’t have an integrated delivery system, which you could solve by partnering with someone who does (UPS, FedEx, etc).
Problem #2: You’re trying to control the installation, which you wouldn’t need to do if you tapped into the excess local capacity. This would also enable you to offer delivery and install in EVERY community, and not just specific zones.
Need an example?
Try UHaul. Moving is one of the worst human experiences. So who knew that the U-Haul customer experience could be so awesome?
When I go to U-Haul’s website, I can:
· Rent a truck
· Buy all my moving supplies
· Rent supplies I don’t want to buy
· Choose a mover from a list of movers displayed by price and customer ratings.
· Schedule movers for loading and unloading — unbundled, in case I don’t need both.
· Hire a truck driver if I want one
· (Pay for the mover, truck, moving supplies, etc., in one easy check-out. I don’t even need an online account.
· I receive a confirmation email from the movers with a payment code.
· I receive a confirmation email from UHaul, including a number that’s linked to my order info online. I can change or cancel the order online, no login needed.
· The mover calls me within two hours to confirm specifics (how much stuff? stairs? piano? etc).The mover texts or calls to reconfirm.
· I pick up the truck and/or supplies at a local, convenient place. (If I need the supplies earlier, I can pick them up at any U-Haul location.)
What would this look like for IKEA?
· I build my shopping list online.
· I am assigned a store by zip code.
· I choose a delivery/shipping mechanism (FedEx, or UPS).
· I am given the option to hire a local installer.
· I pay for everything at check-out. I receive a text payment code, which I will use to pay the installer when the job is complete.
· The local installer calls me within two hours to schedule time and place.
· I watch, via my app, as my delivery is taken from the shelves and shipped for delivery.
· I get a text message from UPS telling me how to track my packages.
· I get a text from my installer, who confirms she’ll be there at the right time.
The result: I feel completely informed, satisfied, and happy. Exactly how IKEA has always wanted me to feel. You helped me make all the right purchasing decisions — just like your value proposition has always promised.
You’ve got an amazing opportunity to grow your market. IKEA isn’t just for college students anymore. It’s for the adults who grew up with you, who love your design, and who will retire at some point into smaller apartments. It’s for the adults who won’t always be able to do their own transport and assembly.
IKEA, don’t shy away from this opportunity. Use your existing competencies and values to grow from within your business.
Don’t bolt on.
PS. I don’t recommend changing everything all at once. Let’s create a test case. Might I recommend Stoughton, MA? I would be happy to help.