Fast Five Shorts | What Should We All Make Of IKEA's Secondhand Marketplace?
In the latest edition of Omni Talk’s Retail Fast Five, sponsored by the A&M Consumer and Retail Group, Mirakl, Simbe, Ocampo Capital and Scratch Event DJs Chris Walton and Anne Mezzenga are joined by special co-host and Shoptalk and Groceryshop’s VP of Original Content and Strategy Ben Miller. In this clip, the group discusses: What We Should Make Of IKEA's Secondhand Marketplace
For the full episode head here: https://youtu.be/ySon4C9S-hQ
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Transcript
IKEA is looking to expand its secondhand furniture offering after test success, according to Euro News, which.
Speaker A:Ben, I have no doubt you read Euro News voraciously, right?
Speaker A:It's always on your dial, Right.
Speaker A:The decision comes after the Swedish multinational launched two successful pilot projects in Madrid and Oslo, which will be expanded to all of Spain and Norway until August, quote, it works.
Speaker A:People like it, said Jesper Brodin, CEO of IKEA's largest franchise.
Speaker A:Inca Brodin then went on to add, quote, we have decided to expand it from Madrid to Spain and from Oslo to Norway in a couple of years.
Speaker A:We want to scale it up to all markets in Europe, end quote.
Speaker A:He also said that the pilot in Madrid and Oslo led to about 200,000 customers visiting the IKEA pre owned website and quote, couple of thousand people also engaging, end quote.
Speaker A:Ben, we go to you as the resident European on this show.
Speaker B:Are you surprised that IKEA European correspondent.
Speaker A:A European correspondent from Armitage.
Speaker A:Yes.
Speaker B:Now you can put it on your LinkedIn, Ben.
Speaker B:Now you can put it on.
Speaker C:Yes.
Speaker A:Are you surprised that IKEA is expanding the reach of its online secondhand marketplace?
Speaker C:I love this, I love this story.
Speaker C:Or I'm all in on this.
Speaker C:I think so.
Speaker C:Couple of reasons.
Speaker C:One, they've tested it, they've tested it on two cities.
Speaker C:They would not be expanding it if it, if they weren't getting some positive results from that.
Speaker C:So that's great, I think.
Speaker C:I mean, the second is this whole area of circular commerce is really growing and the brands have been completely left behind.
Speaker C:So where'd you go to buy secondhand furniture?
Speaker C:It's Facebook Marketplace.
Speaker C:Where'd you go to buy pre used sneakers?
Speaker C:It's ebay, you know, whether it's Nike or whether it's Ikea, every the brand and the IP owners are playing catch up in this space.
Speaker C:So activities, having been on the, the, the IKEA pre sale website, having looked at what they're offering through in Madrid, the CX is good, the user experience is good.
Speaker C:You can choose to either be paid as a seller, you could be paid in cash, or actually you can get vouchers to be used in an IKEA store.
Speaker C:But you get 15% more than the sale value.
Speaker C:So it can drive some positive traffic back into the store, I think.
Speaker C:Look, if they're trying it, it's good, they're expanding it.
Speaker C:Uh, I'm, I'm all in on seeing brand owners be more active in circular commerce.
Speaker A:Got it.
Speaker A:So, Ben, so I want to make sure I heard you right.
Speaker A:So you think this, this signals that the concept is actually working and they think there's a business out of it.
Speaker C:Okay.
Speaker C:I'm 99% there that it signals it's working.
Speaker C:I'm 1% there that it might be helping some challenges they're having with sustainability communication.
Speaker C:So I'm, I'm, I'm favoring the 99%, but I do recognize it's a helpful part of a round of story giving.
Speaker A:Them the extreme benefit of the doubt.
Speaker A:Okay, got it, got it, got it, got it.
Speaker C:And I, and I look forward.
Speaker C:Members of the Ikea team are going to be on the short Europe agenda, so we can, we can ask them that honest question then.
Speaker C:But for now, I am giving the benefit of the doubt.
Speaker A:Yeah, that's right.
Speaker A:And I think Ikea deserves the benefit of the doubt to some degree too.
Speaker A:And what do you think?
Speaker B:I think you can't just look at it as whether or not this is working from, like a business profitability angle too.
Speaker B:I think you have to consider that this is a very strong marketing hook as well.
Speaker B: whole, like this this year in: Speaker B: ram for trying to not shop in: Speaker B:So these, this whole group of, especially Gen Z, who are trying to see what, what can I do for circular commerce to buy as little as possible this year.
Speaker B:And this is, this concept of what Ikea is doing has been alive and well, especially in like, the consignment space, for a long time.
Speaker B:And I've, I've lived it for years now where when I need something new, I know I have a credit or I know I have a gift card to Ikea.
Speaker B:That's going to be the first place that I'm going when I'm looking for new furniture, because I have that credit to use.
Speaker B:And so I think that this is more to me about getting people to go to Ikea first when they're looking for home goods or houseware products than it is about, like, how it's really contributing to Ikea's bottom line when I return my Billy bookcase and am I buying something that day?
Speaker B:But, but yeah, I think it's playing to, playing to all the right themes right now for Ikea to continue a sustainable business in all sense of the word.
Speaker A:All right, well, so I'm gonna, I'm gonna kind of wedge myself in between the two of you.
Speaker A:I think, like, I think, I think kind of, I think there's bull on dang.
Speaker A:But I'm.
Speaker A:I'm a little more like, wait and see with this, I think, because I.
Speaker A:I'm.
Speaker A:I'm not surprised that they're rolling it out at all.
Speaker A:You know, that's the thing fundamental here.
Speaker A:I'm not surprised for.
Speaker A:Basically for the reason you said.
Speaker A:An.
Speaker A:But there's.
Speaker A:There's really two reasons I thought of, like, one, and Ben, I think you'll appreciate this the most.
Speaker A:One, they're Swedish.
Speaker A:Like, it's in their ethos, like, you know, to.
Speaker A:To.
Speaker A:To take this position.
Speaker A:Right.
Speaker A:And so.
Speaker A:And then number two.
Speaker A:And Ben, you alluded to it in some ways, and, and this goes back to what you said in the marketing hook.
Speaker A:They are also public enemy number one on a lot of sustainability factors, like raw material sourcing in particular.
Speaker A:So did you know, for example, that according to Earthsight, which is an organization that monitors the environment, environmental impact of businesses, IKEA uses 21 cubic meters of logs every year.
Speaker A:That means one tree is logged every second to make an IKEA product.
Speaker A:Every second.
Speaker A:One.
Speaker A:One tree is logged every second to make an IKEA product.
Speaker A:Now, I'm no expert.
Speaker B:Like, what.
Speaker B:What about Wayfair and some of these, I mean, compared to what?
Speaker A:Well, I mean, just like, like, is that.
Speaker B:Are they, like, the number one abuser?
Speaker A:It's the biggest furniture manufacturer in the world, I think.
Speaker A:I'm not 100 sure.
Speaker A:But, like, that's just a lot of locks, right?
Speaker B:Yes.
Speaker A:And so the real question is, it's just a lot of logs, right?
Speaker A:I mean, I hate to say it.
Speaker A:It's just a lot of logs, right?
Speaker A:So the real question is, is this new website, just right now, another form of rewatching, or will they honestly try to make a sustainable business out of it?
Speaker A:The one thing that makes me skeptical is the rollout seems a little bit slow.
Speaker A:Like, you're going from Madrid to Spain, like, and then you're talking about rolling out naturally.
Speaker A:So I'm just, you know, I'm tempering the expectations here that, that it's all about the business value being accrued so far, but time will tell.
Speaker A:That's my take.
Speaker B:Yeah, I think that's a really smart call out, Chris.
Speaker B:I agree.
