Ikea is planning to rival online furniture resale platforms such as Facebook Marketplace, eBay and Shpock with the launch of its new peer-to-peer marketplace.
The Swedish giant is trialling a platform which allows customers to sell their unwanted Ikea pieces in Madrid in Spain, and Oslo inNorway, before looking to expand the model to more cities.
Global retail boss Tolga Öncü explains the vast majority of home furnishings that are being sold between consumers are Ikea products and as such, “there is a big opportunity to help facilitate that, with more easy access to Ikea data about those products”.
The response to the new marketplace has been “tremendous”, he says, with the retailer’s teams in other regions already eager for it to come to their turf too.
But what is the world’s largest furniture retailer’s marketplace plan and will it revolutionise furniture resale?
How does Ikea’s marketplace work?
Öncü explains the platform aims to “simplify” the process of reselling home furnishings.
Customers can upload images of the pieces they are wanting to sell and Ikea will populate the listing with product data and add “some inspiring pictures of that product in different environments next to your pictures”, he says.
Users also have access to repair kits, assembly instructions and spare parts, which “no one else can do”, Öncü adds.
The marketplace is only available to Ikea Family members – the retailer’s free membership scheme – to buy and sell products on the platform.
It is currently free but that the business may look to introduce a “symbolic fee so the quality of the platform remains on a high level”, he adds.
But if it’s free, what’s in it for Ikea?
If the platform is populated with people selling their used flatpack furniture then it gives Ikea access to streams of data, Öncü explains.
“Some of the products are sold a second, third or fourth time, which is also a good confirmation about the durability of the products.
“It also gives us more access to data about easiness to assemble or de-assemble the products,” he says. “Having that dialogue in our platform, together with the users, is going to help us to improve products even more.”
For example, from feedback, the retailer has redesigned its PAX wardrobe to shorten assembly time from one hour down to 20 minutes.
Digital commerce global vice president of strategy Gregor Murray says that “Ikea isn’t the first but they certainly won’t be the last” to launch a marketplace.
“We have already seen a number of retailers open marketplaces, and I would think it is only a matter of time before we see other retailers follow suit and offer their customers an opportunity to resell their purchases while taking a secondary margin on the sale,” he says, adding “for many retailers this could become a lucrative additional revenue stream”.
Is it a threat?
The marketplace is off to a strong start as Öncü says the response has been “really, really great” and is feeling optimistic about its future.
At the moment, it’s a “minimum viable product” – meaning there are just enough features to be used by early customers.
“Our job now is to measure, follow up, tweak and adjust the things that don’t work, and then by the end of this calendar year, take the decision on how we scale this to all the markets where we operate.”
Murray believes that the marketplace “won’t remain a trial for long”. “I believe it will be rolled out and I believe it will be popular when it is,” he says.
The strength of the Ikea brand means “that customers will use it, and trust the Ikea resale platform more that many other marketplaces”, Murray says, adding that in the future he can see customers “using stores as an exchange site, and stores having a resell section for customer peer-to-peer sales”.
However, Öncü is taking a slightly more cautious approach and is focused on getting the marketplace right. He says that over the next four months the team will be paying close attention to “customer score of convenience, easiness of using and trust in the platform”.
“We are very curious to understand which products and categories are more sold than others,” Öncü notes, adding that the team will be asking: “Can we do something with that? Is there something we can help and support with? Maybe if we redesign the product – tweak a little bit here and there – maybe it will become even more easy knowing that this is a product that is being sold 5, 6, 7, 8 times?”
“The access to repair kit and spare parts is gonna be something that we are gonna follow up closely, because if you buy an Ikea secondhand product on another platform, you don’t have access to the needed assembly instructions, spare parts that you might miss.”
“I’m quite optimistic, but I will be cautious during the test phase to really understand the mechanics and operating model behind it,” Öncü says, adding that he doesn’t see “any limitation” to it.
“It’s more that we find a way to do it right, as low cost as possible and as good service as possible for the both seller and the buyer.”
Ikea is trying a unique approach to resale, and is determined to get it right. All in retail will be watching closely.
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