IKEA tests the value of time as a sales incentive

Discussion
Source: IKEA
Feb 24, 2020
Tom Ryan

IKEA Dubai has rolled out a campaign, “Buy With Your Time,” that lets shoppers convert the time they took to travel to their IKEA store into a discount.

At checkout, shoppers show the cashier their Google Maps Timeline, which records all of their past trips. Then, the cashier converts their purchases into “time currency” prices. The prices are determined based on average hourly income levels in the United Arab Emirates. A graphic developed for the program indicates that even five-minutes travel time equaled a veggie hot dog.

The program appears ideally suited for IKEA since many stores are located in remote areas.

“Before the birth of this campaign, we realized two things: time is precious today, and many loyal IKEA customers spend a significant chunk of it visiting our locations, which are sometimes away from the city center,” IKEA said in a media statement. “We think it’s only right to reward our customers’ efforts by repaying them for the time spent reaching us. It’s our way of helping the Dubai community make the most of every minute.”

IKEA claims to be the “first retailer to let customers pay using time,” and that appears true for physical retail. Online, retailers often charge a premium for faster delivery or in-store pick-up, providing opportunities for them to waive fees or apply discounts for customers who accept lengthier delivery or pick-up times.

“There are so many pressures on our time,” Scott McClelland, H-E-B’s president told the Houston Chronicle last December. “There’s a difference in the way our generations have looked at the value of time. My father would happily spend 10 minutes to drive further to save $5 on cheaper gas. Today, his kids will spend $10 to order food to be delivered rather than driving to pick it up.”

Another interesting application of time comes from Timberland, which since August has offered to plant a tree every time customers choose to have their orders delivered in four-to-eight days versus the standard three days.

DISCUSSION QUESTIONS: What do you think of converting the value of shoppers’ time into a purchasing incentive? Is saving time significantly more critical for online shoppers versus in-store shoppers?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"This is an interesting idea, but requiring customers to use Google to get the benefits is a deal breaker for some people, including this never-Googler."
"What about the time lost trying to get out of the store? IKEA’s store layout is a maze, once you’re in it takes a while to get through it."
"Just pay me for the time I have to spend in the checkout line over x minutes. That would be a winner."

Join the Discussion!

15 Comments on "IKEA tests the value of time as a sales incentive"


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Mark Ryski
BrainTrust

I think this is interesting conceptually, but I’m not sure how well it will scale. Time does have value, but you would never know it by the way so many retailers take their shoppers’ time for granted – lack of staff, long check-out lines, etc. – it’s refreshing to see a retailer like IKEA acknowledge that shoppers’ time has value. And saving time has value for all shoppers, both in-store and online, so I think the idea could resonate with shoppers. The real trick will be in how easy IKEA makes this for their shoppers — if it’s complicated or convoluted, it could cause more harm than good.

Suresh Chaganti
BrainTrust

It is nice of IKEA to value people’s time. But it sounds needlessly complicated and may even send a negative vibe. A better and easier-to-administer method would be to segment by distance from home address, and give a $20 or $30 store credit by segment based on distance traveled. They already do that kind of calculation for delivery charges.

Lee Kent
BrainTrust

Yes, it’s a nice thought but I would suggest they keep on their thinking caps. There are many caveats to this one if they want to roll it out everywhere. For my 2 cents.

Cathy Hotka
BrainTrust

This is an interesting idea, but requiring customers to use Google to get the benefits is a deal breaker for some people, including this never-Googler.

Richard Hernandez
BrainTrust

How does this work in places where the closest IKEA is five or six hours away? Is there a limit on how much of a discount you can get?

Georganne Bender
BrainTrust

What about the time lost trying to get out of the store? IKEA’s store layout is a maze, once you’re in it takes a while to get through it.

Gene Detroyer
BrainTrust
Time is my most precious commodity. I put a dollar value on it, and even when money is not involved I think about it. Yesterday I spent two hours at Starbucks with three of my grandchildren. What is the value of that? Priceless! Will I take 20 minutes to walk across the street to Duane Reade to get something I can get on Amazon in two days? No, in dollars and cents, my time is much more valuable. I am guessing most people aren’t like me when it comes to time and money. Therefore, I think the IKEA idea will have resonance and maybe be a little fun. Will people really think about if they will get paid for their time? Probably not. Will they be more inclined to take that hour-long trip to and from the store because they get something for it, no matter what the return? Absolutely! We weren’t asked, but I love the Timberland idea. I would get a tree planted in a heartbeat. Really, how many times do we need… Read more »
Mel Kleiman
BrainTrust

I love the thinking and appreciate that they are considering the value of my time. I would like to change the game a little bit and look at the use of my time differently.

The number one complaint of retail customers is about the time they spend in the checkout line. So here is my suggestion. Don’t pay me for my travel time and make me show you my Google map. Just pay me for the time I have to spend in the checkout line over x minutes.

That would be a winner.

Ian Percy
BrainTrust

It must be 30 years now since my friend Donald Cooper had a very successful women’s clothing store called Alive & Well, located way outside of Toronto. His pitch back then – one that pretty well everyone in Toronto could recite from his advertising – was that if you drove way out to his store and you hated it, he’d pay for your gas. As has been said, IKEA, there’s nothing new under the sun. Mind you, it sure worked for Cooper!

As I reminisce, he also bragged that his changing rooms had more hooks and were twice the size of anywhere else. In the children’s area he served free drinks including grape juice, a beverage deliberately selected for the danger of it. Back then he was Canada’s undisputed retail rebel.

Phil Rubin
BrainTrust
1 month 13 days ago

IKEA has the right idea – as we’ve said for three years now, “time is the new loyalty currency” – but the dimension of time is much more than getting to the store. It’s the time in the store, the time wasted with irrelevant aspects of the customer experience, the time to check out, check order status, wait for deliveries or (especially for IKEA) assembly, and more.

For a brand wanting to be a loyalty leader, time is a reflection and a function of being loyal to customers even before they are loyal to the brand. Thus it’s more holistic than simply time in transit.

A very good start in terms of thinking but there is much farther to go. The question is how long it will take IKEA to get there :)!

David Naumann
BrainTrust
David Naumann
Vice President, Retail Marketing, enVista
1 month 13 days ago

Calculating drive time or distance into an incentive for in-store purchases is a clever marketing tactic. I like it. Convenience is extremely valuable for shoppers and personally, I think the IKEA “Buy With Your Time” campaign will drive incremental store traffic and revenues.

Lee Peterson
BrainTrust

Main thing here is the creativity. What a great thought. And listening to the customer. Consumers today have so many choices, why would they drive 50 miles to stock up their own stuff and get some meatballs? Much easier to shop locally and/or online. But with this? Well, guess we’ll soon find out, but great try, love the thinking.

Craig Sundstrom
Guest

Probably best to see if it actually works — however one defines that — in Dubai before trying it elsewhere.

I give the idea high marks for novelty, but other than that, I just don’t think it makes much sense, either for the customer or IKEA.

Dave Wendland
BrainTrust

I’m fascinated by the concept … this is a wonderful “out of the box” way of acknowledging and showing appreciation to shoppers in an entirely new way. I do like Suresh Chagnati’s suggestion of converting the time into store credits (wouldn’t be surprised if this isn’t already on the drawing board). Another way that IKEA could help place a value on time is to also offer credit against the approximate 30-40 minutes required to assemble many of their items. With all that said, I applaud their early introduction of something entirely different, their willingness to step out ahead of the crowd, and the thought process that has recognized time as valuable. Can’t wait to see the iteration around this innovative concept.

Kai Clarke
BrainTrust

This is a great idea that only needs to properly applied for the right audience. I especially like Timberland’s plant a tree donation concept for each customer. Anytime you can give back to a customer in a special way, this makes them feel special, and often encourages them to return again as a customer.

wpDiscuz
Braintrust
"This is an interesting idea, but requiring customers to use Google to get the benefits is a deal breaker for some people, including this never-Googler."
"What about the time lost trying to get out of the store? IKEA’s store layout is a maze, once you’re in it takes a while to get through it."
"Just pay me for the time I have to spend in the checkout line over x minutes. That would be a winner."

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