In the News

A convenient takeover for Ikea

Penny Brooks

1st October 2017

There are many headlines for this story: 'Ikea assembles deal for Taskrabbit' in the FT, 'Ikea enters gig economy by buying freelance labour firm Taskrabbit' in the Guardian, and the less wordy 'Ikea buys odd-jobs firm Taskrabbit' from the BBC. But I think my favourite is from the Independent: 'Ikea buys Taskrabbit, suggesting an end to the pain of flatpack furniture'. The sub-heading goes on thus: 'Have a stranger come and get confused by allen keys and strange instructions instead'.

In all of them, the key to the story is the eminent good sense that it makes for Ikea to extend their offer of a great range of low cost self-assembly furniture by helping customers to find some help with delivery and assembly of the boxes full of parts, nails, hinges and dowels. Customers are increasingly time-poor and may lack not only the transport for the boxes of parts but also the patience to construct their own furniture, so a link to help with those makes a lot of sense.

With a model based on people strolling through their physical stores and making impulse purchases of all kinds of household items, Ikea now aim to quadruple their online sales by the end of 2020 to a total of 10% of their turnover. It has just released an app, Ikea Place, which uses augmented reality to allow iPhone users to place pieces of furniture in their rooms on a screen, to see how they look.

Meanwhile the FT looks at the benefits for Taskrabbit, which it says is understood to have 60,000 “independent contractors” registered on its platform, but it is unclear how many are active. The article refers to the retrenchment in the number of platforms set up to support the gig economy. Too many were set up, and they have not found enough business to be sustainable on their own - two examples in the US, that closed in 2015, were Homejoy, a site for cleaners that raised $64m on start-up, and Sidecar, a pioneer of ride-sharing that was later overtaken by Uber and Lyft.

Penny Brooks

Formerly Head of Business and Economics and now Economics teacher, Business and Economics blogger and presenter for Tutor2u, and private tutor

© 2002-2023 Tutor2u Limited. Company Reg no: 04489574. VAT reg no 816865400.