Three years after senior IKEA executive Steve Howard declared that the West had probably hit “peak stuff”, the Swedish furniture giant has announced a radical departure from its current business model.
It’s part of a drive, ultimately, to build a circular, more sustainable business model in which it not only sells and rents items, but later re-uses material from those items to build new products.
IKEA will begin its first leasing trial in Switzerland later this month, initially involving office furniture.
“We will work together with partners so you can actually lease your furniture. When that leasing period is over, you hand it back and you might lease something else,” Torbjorn Loof, chief executive of Inter Ikea, which owns the Ikea brand, told the Financial Times.
“And instead of throwing those away, we refurbish them a little and we could sell them, prolonging the lifecycle of the products,” he added.
The company hopes the trial will lead to “scaleable subscription services” for a wide range of furniture types.
The new direction is part of an overall transformation of the company’s business model. Where once it was famed for its flatpacks of furniture, sold in vast, out-of-town warehouses, it has more recently opened a number of city-centre stores and pop-ups specialising in furniture for specific rooms in the home.
It has also ramped up its delivery and online sales offerings.
While the initial trials will involve leasing office furniture, the company says household leasing, such as kitchen furniture, is another possibility for renting.
“You could say leasing is another way of financing a kitchen,” Torbjorn Loof suggested.
“When this circular model is up and running, we have a much bigger interest in not just selling a product but seeing what happens with it and that the consumer takes care of it,” he said.
The company is also continuing its drive to popularise products for the smart home that are in typical IKEA fashion – easy-to-install, super-easy to understand, and, of course, affordable.
This began modestly some 18 months ago with a string of lights that respond to a remote control (a phone app is optional). Now, it has announced an addition to its Home Smart line up from this spring: a set of smart blinds called Fyrtur, that will open and close with a remote controller or a voice command.
Sourced from Financial Times, CNET, Guardian; additional content by WARC staff