With the objective of sending more relevant communications for every member, IKEA wanted to find more ways of offering the customer what they really need. As an agency with a long running history, working successfully in partnership with IKEA, Quant was tasked to make this a reality. In order to achieve this goal, we created an innovative basket analysis tool (PPRE – Personalised Product Recommendations Engine) that would take into account the individualistic needs of the IKEA customers.
By analysing millions of historical transactions, we were able to develop several algorithms which varied by recommendation type.
The types being;
1. Amazon style recommendations – Supporting early repeat sales for new IKEA FAMILY members, by suggesting complimentary products. (“People like you bought this…” or “People who bought this, also bought…”)
2. End of line recommendations – By identifying buyers of the item being discontinued we were able to promote ‘a last chance to buy’ for complimentary items.
3. New product recommendations – Targeting the latest ‘new products’ to individual members, by matching these to their demographic segment
In order to increase the effectiveness of the tool, we output these recommendations through multiple communication channels; personalised emails, IKEA family web and as an integrated section of the in-store Kiosks. We worked alongside IKEA to enhance the capability of their in store Kiosks, incorporating the functionality so that product recommendation would be available on screen when customers log into their profiles. Thanks to the unique approach, our product recommendations don’t just spit out products based on an algorithm or statistics, we have calibrated them in line with IKEAs business requirements, incorporating rules specific to IKEA product lines, seasonality and sales targets.
Since implementation, IKEA Poland has seen a major sales uplift, with an increase in per customer spend of £4.65 compared to the control group over a period of three months. A major uplift in engagement metrics was also seen with an email open and click through rate of 38% and 12% respectively, which is an increase of 200% and 133% respectively, outperforming the industry standard.