IKEA has been quietly piloting various initiatives across its European stores to see how it can build circularity into its service offering for customers. It’s a bold move, given that consumer-facing circular economy business models are still relatively embryonic, particularly in the retail market.
“Over the coming years, we will support customers to care and repair, rent, share, bring back, and resell their IKEA products to prolong product life,” IKEA’s sustainability manager Jonas Engberg told me in a recent interview.
He points to the retailer’s Belgium stores as a case in point, where five options are available to shoppers: sell, renew, repair, return or donate. Two of the options, sell and repair, are just offered for IKEA furniture, but the other three can include furniture brought elsewhere.
With ‘sell,’ IKEA buys used furniture back from the customer to resell, and the customer receives a voucher in exchange to use in-store; with ‘renew,’ customers can attend workshops held in-store to practice techniques for refreshing or restoring furniture, or learn how to reuse it in other ways; and with ‘repair,’ IKEA offers a spare parts service for its own furniture.
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The last two options, ‘return’ and ‘donate,’ are based on a takeback/reverse logistics service for certain items such as sofas and mattresses, involving either IKEA or a social enterprise.
Last year in Denmark, IKEA piloted a project where leftover textile material from a store was given to a local sewing company and turned into pillows and cushion covers – items which the store then bought back on its regular supplier terms to sell in-store.
“The project was a great success and is being launched in three other countries over the coming months, just as it’s being repeated in all the Danish stores next year,” Engberg reveals.
Meanwhile in Sweden, IKEA is working with classified advertising site Blocket to encourage customers to buy and sell second-hand products – the website is also linked to the retailer’s Swedish IKEA website to help boost traffic and promotion.
Asked if he’s noticed any shopping trends that suggest appetite for consuming in different, more sustainable ways, Engberg replies: “We know that our customers want to live more sustainably at home. We are determined to make sustainability affordable and attractive to as many people as possible. This includes offering products and solutions that enable people to live more sustainably but reducing energy, water and waste, which we have identified as a ‘sustainable life at home range’.”
During the last financial year FY15, sales of such products increased by 29 percent compared to FY14 for IKEA, keeping the company on track to achieve its goal of a fourfold increase in sales of products for a more sustainable life at home by the end of FY20, compared with FY13.
Picking just one product category as an example, Engberg says: “We have converted our entire lighting range to LED and we estimate to sell more than 500 million LEDs by 2020.”
He adds that designing for circularity will be key going forward. “We strive to design for circularity by making durable products and products that can be reused, repurposed, repaired and resold. It also includes creating products that consist of materials that are easy to separate and reuse.”
The retailer is also working with its suppliers to explore new ways to turn waste into new raw materials for IKEA products. “We are developing our capabilities to reuse plastic, paper, wood fibers, foam and textiles from our own operations and customer bring-back. We are also developing systems to collect packaging material from our own stores and turn them into new products,” Engberg says.
Putting in place the right logistics will be crucial going forward. Already IKEA offers mattress takeback in 21 of the markets it serves, as well as kitchen and white goods removal. To help facilitate customer repairs, the company ships over one million spare fittings worldwide every year and offers 2,000 defined spare parts for Scandinavia, Belgium and the Netherlands.
Being a member of the Ellen MacArthur Foundation’s CE100 platform is also bringing benefits to IKEA’s circular ambitions, particularly in terms of scale up.
“There are many things that we can change on our own … but to change other things, we need collaboration,” Engberg admits. “We also strongly believe in involving customers and co-workers to make our business circular.”