IKEA Family
Utilizing machine learning for precise targeting, IKEA saw a 4x increase in purchase likelihood among its most engaged loyalty members. The business case was recognized in the Golden Arrow competition.
Boosting IKEA Loyalty: 4x Purchase Likelihood Through Advanced Machine Learning Targeting
NOTE:
This case study has already been described and awarded on Golden Arrow 2020 in data science category
https://www.signs.pl/galeria.php?name=galeria&file=displayimage&album=1379&pos=20&sid=0&fo=1
https://goldenarrow.pl/2020-zwyciezcy/
In 2024, the Furniture market in Europe generated a substantial revenue of US$231.70bn. It is projected to experience a steady annual growth rate of 2.26% (CAGR 2024-2029). Among the various segments within the market, the largest one is the Living Room Furniture segment, which accounted for a market volume of US$60.87bn in 2024.
Resources:
Furniture - Europe
The main goal of the campaign was to maintain the effectiveness of IKEA Family communications, achieving at least a +10% increase in IKEA's turnover, despite the challenge of reducing the number of promotional offers available to Club Members.
Initial Setup - Utilizing Deep Data to Optimize Loyalty Program Engagement
The reduction in the number of available promotional offers posed an additional challenge, increasing the importance of precise targeting to maintain the interest of Club Members. To better tailor communications to the needs and expectations of members, we leveraged customer insights and the extensive database of the IKEA Family program. With access to advanced systems, infrastructure, and vast data integration, we possess deep knowledge of over 4 million IKEA Family program members.
Implementation of the Universal Scoring Model - Automating Target Group Creation with Data-Driven Models
We developed a proprietary system that automatically trains dedicated scoring models for specifically defined marketing campaigns. These model predictions are calculated for all customers in the IKEA Family database who have consented to at least one communication channel. This enabled the dynamic creation of target groups for individual campaigns based on data and machine learning. Consumers with sufficiently high scores, as estimated by the model, were selected for campaigns. A consumer's score could change daily depending on their interactions across various touchpoints with IKEA.
On-Base and Off-Base Communications - Integrating Scoring Models with Data Management Platforms
Data from the loyalty program is transforming the process of planning and executing communication campaigns by effectively reaching new audiences. Using hundreds of variables related to club members—such as their behavior on the website, interactions with mailings, transaction history, or demographics—we build scoring models and integrate them with Data Management Platforms (DMPs). In DMPs, we identify new audiences ("look-a-likes"), i.e., potential customers who resemble our club members in specific characteristics. This enables us to scale the reach of campaigns. By searching for "look-a-like" cookies, we can also target non-members who show online behavior similar to that of identified club members interested in a particular campaign.
I highly recommend Loyalty Point as a strategic business partner. Whether analyzing industry dynamics or addressing complex challenges, their team consistently delivers practical and well-founded solutions.
Senior Marketing Manager
Vision Express
Loyalty Point has a solid knowledge to successfully overcome challenges ahead and has a decent technical infrastructure to fulfill high satisfaction of our Customers. On top of this are values like trust, engagement and kindness that make achieving ambitious goals achievable.
Digital Director
Lagardère Travel Retail
We are very pleased with the results of our cooperation. We especially appreciate the multitasking nature of the team - despite implementing several projects at the same time, complex promotional mechanisms were always ready on time.
Head of Loyalty & CRM
Decathlon
Loyalty Point consistently supports us in navigating various challenges, offering constant, professional and reliable support and tailored solutions that align perfectly with our business needs and capabilities.
E-commerce, Marketing and Omnichannel Director
Rainbow
The models created using the Universal Scoring Model system significantly enhance the effectiveness of targeted communications. They allow for the selection of consumers who are far more interested in the promoted products compared to the general audience or random selection. Thanks to "look-a-like" modeling, we can extend the system's findings to increase the reach of communications in external media as well. As a result, the models significantly improve the effectiveness of communication and contribute to an increase in overall store turnover.
Targeted communication based on the models created by the USM system is conducted through various channels, including e-mail, SMS, and DIGITAL (using the media house's DMP).
Models created with the USM system greatly improve the effectiveness of targeting communications. Considering the models prepared in the period September 2019 - May 2020, the top 1% of customers indicated by models are, on average, 8.4 times more interested than a randomly selected Club member from the base. For the top 5% of Club Members, the ratio is 5.2, and the group of 10% most interested by model buys 4 times more often than the average Club Member.
I highly recommend Loyalty Point as a strategic business partner. Whether analyzing industry dynamics or addressing complex challenges, their team consistently delivers practical and well-founded solutions.
Senior Marketing Manager
Vision Express
Loyalty Point has a solid knowledge to successfully overcome challenges ahead and has a decent technical infrastructure to fulfill high satisfaction of our Customers. On top of this are values like trust, engagement and kindness that make achieving ambitious goals achievable.
Digital Director
Lagardère Travel Retail
We are very pleased with the results of our cooperation. We especially appreciate the multitasking nature of the team - despite implementing several projects at the same time, complex promotional mechanisms were always ready on time.
Head of Loyalty & CRM
Decathlon
Loyalty Point consistently supports us in navigating various challenges, offering constant, professional and reliable support and tailored solutions that align perfectly with our business needs and capabilities.
E-commerce, Marketing and Omnichannel Director
Rainbow
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