Swedish home furnishings retailer Ikea has purchased online same-day handyman service marketplace TaskRabbit in a push to offer more services to customers and improve its digital expertise.
Terms of the deal, which is expected to close in October, were not disclosed. Ikea and TaskRabbit did not immediately return requests for comment.
The move is designed to make it easier for Ikea shoppers to assemble their purchases. TaskRabbit works by allowing a shopper to search for a skilled “Tasker” nearby who can help with a project, such as home improvement, mounting and installation, or—most germane to Ikea’s business—assembly of furniture that typically comes packed flat in boxes and requires nuts, bolts and Allen wrenches. TaskRabbit has a pool of 50,000 on-demand contractors. In November 2016, Ikea operated a pilot program with TaskRabbit and Ikea stores in London to enable furniture-assembly services by Taskers.
I thought I’d be able to tackle this Ikea desk but it has defeated me.
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“In a fast-changing retail environment, we continuously strive to develop new and improved products and services to make our customers’ lives a little bit easier,” Ikea president and CEO Jesper Brodin says. “Entering the on-demand, sharing economy enables us to support that. We will be able to learn from TaskRabbit’s digital expertise, while also providing Ikea customers additional ways to access flexible and affordable service solutions to meet the needs of today’s customer.”
Ikea, No. 212 in the Internet Retailer 2017 Top 500, had an Internet Retailer-estimated $161.1 million in online sales last year, up 20% from $134.2 million the previous year.
The companies have not revealed how the TaskRabbit service will integrate with Ikea’s e-commerce site. On the TaskRabbit site, a consumer chooses from several tasks, such as yard work, home improvement and furniture assembly. Choosing furniture assembly takes the consumer to a page where he enters his address and gives details about the job. The example given states, “I thought I’d be able to tackle this Ikea desk but it has defeated me. Can you please bring your tools and help me get this set up? I’ll send you a picture of the current state of assembly to give you an idea of how far I got. Hopefully, this won’t take more than three hours.” Shoppers pay in the app.
TaskRabbit, which operates in the U.S and the United Kingdom, will continue to work with other retailers.
“After the completion of the transaction, Ikea Group will fully own TaskRabbit, which will remain a standalone company and operate as an independent company within the Ikea Group,” Ikea writes. “As such, TaskRabbit will continue to partner with other retailers and commercial partners in this capacity.” TaskRabbit does not list any retail partners on its website.
Brodin said the acquisition is about leveraging TaskRabbit’s digital expertise to continue to grow Ikea’s own online business.
“As urbanization and digital transformation continue to challenge retail concepts we need to develop the business faster and in a more flexible way,” he said. “An acquisition of TaskRabbit would be an exciting leap in this transformation and allows us to move forward with an even greater focus on innovation and development to meet changing customer needs.” Brodin, who used to lead Ikea’s supply chain development, took over as CEO of the retailer on Sept. 1.
Industry experts say this could have a two-fold impact on Ikea’s overall business.
David Naumann, vice president of marketing at retail consultancy BRP, says this could mean more older shoppers wind up buying furniture from Ikea.
“TaskRabbit’s customer base includes people that don’t have the time or skills to do manual labor projects themselves,” he says. “These demographics are prime candidates to expand Ikea’s customer base, as these individuals aren’t inclined to shop for do-it-yourself products, older consumers or those that don’t want to hassle with assembling furniture were probably previously reluctant to purchase unassembled items from Ikea. Now they can benefit from Ikea’s unique designs, at value prices, without having to worry about assembling the furniture themselves.” Top500Guide.com data shows that 57.78% of Ikea’s online shoppers are under the age of 45.
Ikea is not the first major home furnishings retailer to partner with a company that helps with assembly and setup. In April 2016, Wayfair Inc. (No. 16) began working with home services platform Porch.com to connect its shoppers with experienced professionals who could help them install their purchases from Wayfair. Amazon.com Inc. (No. 1) in 2015 began offering Amazon Home Services for such jobs that include plumbing, installation of a TV mount and treadmill assembly. The add-on services are available on more than 1 million products, and shoppers can browse service providers available in their area.
Adrien Nussenbaum, CEO and co-founder of marketplace technology vendor Mirakl, sees TaskRabbit as being complimentary to Ikea’s online and offline retail offerings.
“It’s a strategic digital move for Ikea to offer an easy connection to so many service providers who can actually assemble their furniture,” he says. “This move not only showcases a continued investment in digital commerce, but offers a truly complete omnichannel experience, where one of those channels becomes your home. The holistic experience of finding, buying, and assembling any Ikea products is now possible, completely enabled online under the Ikea brand.”
According to CrunchBase, TaskRabbit has raised $37.68 million across six rounds of funding since launching in 2008.
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