If you’ve ever put together a piece of IKEA furniture, you don’t need to read one speck of analysis to understand why the Swedish retail giant went after gig-economy startup TaskRabbit.
It’s a match made in Arkelstorp heaven: A way for customers to order a moderately priced piece of furniture without having to sacrifice a weekend to assemble it. But the deal has a grander meaning in the world of retail.
Retailers are embracing the notion that the vaunted “customer experience” extends well beyond the marketing and merchandising that spurs a consumer to buy a product. In the digital world there has been a tremendous focus for years on embracing new technology to improve things like personalization, product rankings and site-search performance.
In the years to come, that focus will expand well beyond the functions that inspire a customer to click the buy button. Artificial Intelligence and machine learning will take a bigger role in payments, fraud protection, shipping, delivery and post-purchase customer support. That post-purchase love will even extend to the sort of support that sends Allen-wrench-wielding workers to your house to put together your Hasselvika bed frame — making it a Hassel-free experience.
At this week’s Shop.org, an annual gathering of e-commerce professionals, a gaggle of vendors were selling the vision of further injecting artificial intelligence and machine learning into the backend of e-commerce. After all, what good is it to provide an elegant customer experience leading up to an online sale only to screw up on getting the product to your customer on time?
“I think one of the themes of this is going to be so much more than product recommendations and search optimization. We’re going to see machine learning impact retail from end-to-end and across channels,” Dave Barrowman, vice president, innovation at Skava, said during a presentation on the role of machine learning in retail.
TaskRabbit’s Human Help Comes With a Helping of Machine
Adding services, like having a handy person show up to help you make your purchase worthwhile, just makes sense. And while there is no denying the service is very much human based, that doesn’t mean it doesn’t come with a strong helping of machine.
Think of TaskRabbit and other gig services as the Uber for getting stuff done. In fact, TaskRabbit uses algorithms to match workers with the work that someone wants accomplished. And so, Friday’s deal is just another example of retail embracing technology to keep up with customers’ expectations.
Shop.org 2017 featured an area called the Tech Lab where a couple of dozen startups seeking to disrupt retail with technology pitched their products. Among them was Handy, a matching platform that, you guessed it, for a fee sends workers to your house to do the things you can’t or don’t want to.
Handy has partnered with retailers, including online home furnishing and accessory giant Wayfair, to send people to your house to build the stuff that looked so good online, but looks a touch intimidating in a big brown box.
Alex Levin, vice president of expansion and partnerships with Handy, told me that such post-purchase services were fast becoming a must-have for retailers who want to compete in 2017.
“Amazon is pushing the way, as usual,” Levin said. “Now they’re offering installation and assembly. Retailers who don’t offer installation and assembly are going to be left behind.”
And he explained how the technology and strategy behind Handy can help preserve the profit margin by making the back-end retail customer experience better.
Sure, he said, Wayfair has seen an increase in sales with Handy. That’s front-end stuff. But Wayfair has also seen a reduction in returns, he said. Given that returns are a major margin-killer for online retailers, with as much as 30 percent of orders coming back to the warehouse, minimizing returns is no small matter.
“What happens is, once the customer actually gets the product, it will sit there in a box,” Levin says.
IKEA is Reducing the Chance Customers Will Regret Their Furniture Purchases
Having furniture sit in a box gives a customer time to second-guess, to forget why he or she thought that couch would look so good along the living room wall in the first place. Having a piece of furniture built and ready to curl up on within hours of its arrival causes stickiness. Once something is part of your home, it becomes harder to part with it.
The IKEA/TaskRabbit deal comes with questions. The price of the deal hasn’t been announced, for starters. And IKEA hasn’t explained exactly how TaskRabbit will be integrated into the retailer’s business. Nor has anyone talked publicly about what the service will cost the buyer — either in fees or higher prices.
But the benefit seems clear — for retailers the potential for higher conversion rates and lower return rates. And for customers? The ability to get their Saturdays back.
Or in other words, a better customer experience that lasts well after the a consumer has clicked the buy button.