Shownotes
This Omni Talk Retail Fast Five segment explores Best Buy’s new consultation spaces inside IKEA stores and why the partnership could be smarter than it first appears.
Chris Walton, Kelly Carey, and Chad Lusk discuss why IKEA shoppers are already in the mindset of upgrading their homes, how Best Buy’s service-focused approach complements IKEA’s inspiration-driven experience, and why this partnership works far better than trying to place IKEA inside Best Buy stores.
They also unpack what this says about the growing importance of experiential retail and strategic in-store partnerships.
⏩ Tune in for the full episode here.
#BestBuy #IKEA #RetailPartnerships #RetailInnovation #CustomerExperience
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Transcripts
Best Buy is debuting consultations.
Speaker A:I can't wait to talk about this.
Speaker A:Best Buy is debuting consultation spaces inside select IKEA stores, flipping around the retailer's existing shop and shop partnership and creating a new format where Best Buy experts live inside IKEA locations to advise on appliances and technology.
Speaker A:I don't think they actually live.
Speaker A:I think, I think I probably wrote that incorrectly, but that's my.
Speaker B:I think it's quite literal, Chris.
Speaker A:Yeah, right.
Speaker A:Yeah, right.
Speaker A:The geek squad is literally geeking out in ikea.
Speaker A:According to Retail Dive, the new Best Buy consultation spaces are launching at two IKEA locations in Texas and Florida.
Speaker A:No surprise, that seems to be where every retailer test things these days.
Speaker A: nership that also launched in: Speaker A:The consultation spaces give IKEA shoppers direct access to Best Buy experts for product advice, consultation, guidance and ordering support on appliances and tech inside IKEA's own locations.
Speaker A:Kelly, buy or sell the idea of Best Buy consultation spaces inside of IKEA stores.
Speaker C:I'm buying this idea, actually.
Speaker C:I think I'm buying it more than the other shop and shop of Best Buy and ikea.
Speaker C:I definitely am.
Speaker C:Okay.
Speaker C:Yay, we have agreement.
Speaker A:I think we're a unanimous.
Speaker A:Chad's.
Speaker B:Chad's clapping in the background.
Speaker B:Yeah, we're all pumping our fists together.
Speaker C:Awesome.
Speaker C:I'm excited to talk about this one.
Speaker C:I also, you know, you could actually, as a geek squad, probably live in an ikea.
Speaker C:You've got all the rooms set up for you, but no, you've got the food.
Speaker C:Yeah, exactly.
Speaker C:As someone who is about to move and furnish a home, I was super excited about this headline.
Speaker C:A couple of reasons why.
Speaker C:So I think it's a great move for both IKEA and Best Buy.
Speaker C:IKEA has the equity, the brand for furniture and if you're going to be doing a total home remodel, you need a lot of furniture.
Speaker C:You're going to go to Ikea, you're going to walk around and you'll find the furniture you need.
Speaker C:But what if you also need a fridge?
Speaker C:You also need a TV from the consumer experience.
Speaker C:Those are add ons things you need to the furniture, but they're not something that you associate with ikea.
Speaker C:Tech and appliances are a bit of an adjacency for ikea.
Speaker C:So to have Best Buy on location, to actually be able to give that in person consultation that people want and value for technology more than they probably do for furniture, I think is a great idea.
Speaker C:Whereas when I Think about it in the reverse.
Speaker C:You know, I need a. I might need a fridge and not be renovating my whole kitchen.
Speaker C:But if I'm renovating my whole kitchen, I probably also want to buy a fridge.
Speaker C:So I think it's just going to be a much more natural customer experience in how I would be buying those Two things together.
Speaker A:100% Agree, Chad.
Speaker A:I think you do, too.
Speaker A:Well said too, Kelly.
Speaker C:Thank you.
Speaker B:Yeah.
Speaker B:Was my rousing applause not avi enough that I agree?
Speaker B:I mean, yeah, I do agree.
Speaker B:Let me.
Speaker B:Let me build on that a little bit and completely agree with what Kelly said.
Speaker B:If I think about the different store experiences, right?
Speaker B:So even just stepping back from, like, the products themselves and which ones are.
Speaker B:Are better attachments, right?
Speaker B:Like the IKEA store experience, like the visit itself, it's inspirational, but, like, very overwhelming, right?
Speaker B:Best Buy is very functional, but not particularly inspirational, right?
Speaker B:So put them together and you solve each other's weaknesses.
Speaker B:But I think it works better to insert practicality into IKEA than it is to try to bring inspiration to Best Buy, right?
Speaker B:So, like, in the home space, consumers are typically shopping project first versus kind of category first, right?
Speaker B:Kelly, you can probably attest to this.
Speaker B:And thinking about the home now, it's what I've heard, for instance, from Wayfair executives as they've started to open up showrooms, right?
Speaker B:But until.
Speaker B:Until they scale, IKEA is one of the few places consumers willingly spend hours wandering around thinking about buying a new life, right?
Speaker B:They're asking themselves, like, how do I make my home look better?
Speaker B:With Best Buy there, they can also ask, how do I make my home work better?
Speaker A:Right?
Speaker B:And so putting that consultation inside ikea, like, if Best Buy can intercept consumers when they're already imagining a better version of their home, like an upgraded life, like, it's the perfect mental state to sell a $2,000 television, right?
Speaker B:So really, really smart adjacency.
Speaker B:And so for me, it's even less about, like, electronic store inside a furniture store and more just like creating this aspirational living ecosystem 100%.
Speaker A:Well, I don't even have that much more to add.
Speaker A:I mean, I think you.
Speaker A:I mean, I know you two have listened to the show a lot.
Speaker A:I mean, the number one thing I always say about the home furnishings business is it's a chore.
Speaker A:And anyone that's going to IKEA is going to get that chore done.
Speaker A:And so for me, it's all about probability.
Speaker A:Like, where am I going to have the biggest hook?
Speaker A:Am I going to have the biggest Hook trying to add on electronic support via Geek Squad or however you want to do it in an ikea, or am I going to have the ability to, in a Best Buy, sell cabinetry to someone that's going in to look for a microphone to do their podcasting better?
Speaker A:It's definitively the former.
Speaker A:And the other point I'd make too, I mean, it's not even close, right?
Speaker A:I mean, Chad's laughing.
Speaker A:It's not even close.
Speaker A:But like, the other point I would make too is it hits Best Buy's value proposition in the marketplace, which is service and the GI Squad angle particularly.
Speaker A:And it gets.
Speaker A:Gives them.
Speaker A:I particularly like this for Best Buy because it gives Best Buy another outlet to get their service, their Geek Squad hook into folks at the moment they need it most without ever having to step foot in an actual Best Buy, because that relationship can carry forward for a long time and is probably pretty profitable too, when you think about the memberships that get associated with that and the fees that are associated with that too.
Speaker C:So it's not to counter anything we've said, but it is a little bit of an interesting dichotomy and service model, because when you think Ikea, it's great furniture, it's value, nice clean look.
Speaker C:But they're the famous.
Speaker C:You have to DIY the construction of this furniture, the drawings of how to build, which is actually very contrasting to the high service model of Geek Squad.
Speaker C:So I'm, I'm curious, you know, if this continues to grow, they expand, and is that going to put some pressure on the core IKEA service model down the line or just challenging them to think about things differently?
Speaker A:Well, that's the thing too.
Speaker A:I think all three of us approach this from the lens of almost thinking about it like, what works best for Best Buy.
Speaker A:And I think we probably all like it for Best Buy, but do we actually like it for ikea, or is this a harbinger of the fact that IKEA seems to be doing this kind of real estate model?
Speaker A:You know, we talked about it with, I think it was decathlon, you know, as well, like give carving out space for them in their stores.
Speaker A:And we were all questioning, I think, I think A&M CRG was on the show that week.
Speaker A:And so the question then becomes, like, how much do we like this for ikea?
Speaker A:But, you know, I don't, I don't think it's, I don't think it's, it's not going to detract from that key experience.
Speaker A:At the end of the day, I think it's a low risk experiment.
Speaker A:You agree?
Speaker C:Yeah, I think it will add to the IKEA experience, certainly for, for customers as well.
Speaker C:Maybe, maybe what you really do need is a TV and you're renovating your entertainment space.
Speaker C:I was looking on their, their website before the podcast and I actually don't know that IKEA sells televisions.
Speaker C:They don't have TVs on their website.
Speaker C:So, you know, you might get, be getting more trips bringing people in, you know, by expanding the assortment as well.
Speaker C:So I still, I definitely like it for them.
Speaker A:I think it's an easier experiment to run too, than trying to set something up inside of a Best Buy and get that to work.
Speaker A:I think that potentially is a lot of wasted effort too, if we stop.
Speaker A:You agree, Chad?
Speaker B:No, I, I absolutely.
Speaker B:And, and to your question, I don't think it detracts at all from the overall IKEA experience.
Speaker B:It can only serve to enhance by building more elements around kind of how customers are, are picturing their new spaces and their new lives and, you know, making it complete with the electronic stack as well.
Speaker A:Yeah, Beware of, beware of Greeks bearing gifts too.
Speaker A:Maybe IKEA learns how to do this and starts doing it themselves over the long run too.
Speaker A:You never know.