Retail giant IKEA has taken its 2010 catalog mobile with the launch of an augmented reality application for Apple’s iPhone.

Mobile marketing agency Mobile Dreams Factory has brought the 2010 IKEA catalog to the iPhone with a unique augmented reality feature: Users can select a piece of furniture from the catalog and place it anywhere inside the room around them, changing its size to fit the perspective by using the phone’s camera.

“Every year IKEA launches their printed catalog,” said Alberto Benbunan, managing director of Mobile Dreams Factory, Madrid. “Last year, IKEA launched announced an iPhone app together with the press release of the printed catalogue.

“That increased the notoriety of IKEA and this specific press release,” he said. “The target demographic of the app is the same as IKEA’s in general—mainly women ages 25-44—but in the app we found that we all are fans of IKEA.

“Hundred of thousand applications were downloaded in Spain and across Europe.”

IKEA is a Swedish home furnishings retailer that sells flat-pack furniture and accessories, as well as bathroom and kitchen items in their retail stores worldwide. The company claims to be the world’s largest furniture retailer.

Mobile Dreams Factory has two business divisions: Brand Services, which specializes in providing mobile marketing services such as strategy, creativity, technology, purchasing and planning of media, as well as application development.

Operator & Media Services provides advertising platforms to carriers, media companies and content providers.

In addition to IKEA, its clients include Mini Cooper, Vodafone, BBVA, Grupo Mahou and Sony Ericsson.

IKEA ramps up mobile initiatives
The IKEA application has been downloaded more than 200,000 times and in the first week of its release became the second most downloaded application in Apple’s App Store.

The mobile marketing campaign developed by the Spanish agency Mobile Dreams Factory to promote the application won the Golden Lion at the Cannes Lions International Advertising Festival for best advertising campaign on mobile devices.

Gartner estimates that mobile advertising and marketing could grow by 80 percent this year alone and might reach $10 billion.

IKEA realized a couple of years ago that it had to jump on board or miss the boat.

For summer 2008, IKEA launched a mobile loyalty program to build a database of consumers interested in receiving discounts from the home furnishings retailer.

The text-to-enter loyalty program is a means for IKEA to start a dialogue with interested consumers. BCode powered the texted discounts (see story).

When IKEA Seattle launched a mobile loyalty program to build a database of people interested in receiving discounts, the home furnishing retailer never even imagined that 23,000 consumers would sign-up (see story).

IKEA also leverages the mobile platform to reach consumers via advertisements, contests, a customer-relationship management program, coupons and a WAP shopping site.

IKEA’s Seattle store has been running a monthly mobile contest giving opted-in consumers the chance to win a $500 IKEA gift card.

The Seattle store also features a mobile club offering customers savings and special offers to encourage loyalty. The mobile site serves almost as a shopping assistant (see story).

Augmented reality
The IKEA iPhone application is free, and while there is no in-application payments mechanism in this version, the application is designed to increase retail sales.

Consumers can use the augmented reality feature to try out the furniture before buying.

The application also serves as a branding tool that drives consumers into bricks-and-mortal retail stores.

“The hundreds of thousands of downloads of this app in only few months were thanks to word of mouth, blogs and media that echoed the story,” Mr. Benbunan said.

“The unique augmented reality features of this application made it the number-one most downloaded app in many European countries,” he said.

Here is a video showcasing the IKEA iPhone application: