Ikea to Eliminate In-Store Discount for Loyalty Members
Effective Feb. 1, Ikea loyalty customers will no longer receive 5 percent off on furniture and decor they purchase in-store, the company said in a press release. The discount was originally offered as part of Ikea's Family loyalty program, which gave customers exclusive officers, discounts on some delivery options, and a free hot drink at stores. The loyalty program is free to join.
While the loyalty program has been around for years — Ikea launched it in the U.S. in 2011 — the 5 percent in-store discount only began last year. Ikea said in the press release that it was discontinuing the discount to "refocus on new lower price offers on hundreds of products across our range that emphasize everyday affordability."
Total Retail's Take: Ikea has been allocating significant resources to its store operations, announcing a $2.2 billion investment in April that would cover expanded new store models and online order pickup locations. Furthermore, the furniture and home decor retailer has prioritized expanding omnichannel options for customers, including launching new plan and order points that specialize in kitchen, bedroom and living room planning.
Ikea is being strategic in waiting until after the holidays to eliminate the 5 percent in-store discount; retail sales trends from July through September were up 3 percent compared to last year, and economists say that is a good indication of a positive holiday shopping season. The company will try to capitalize on increased store traffic during the holiday season, then tighten its belt in the new year with the elimination of the loyalty program discount.