IKEA’s Revolution: Turning Business Circular

Ikea-Brooklyn-Marketplace

By Bharat Venkatesh

Sustainable Brands’ Maxine Perella reports that IKEA, the world’s largest furniture retailer, intends to adopt a circular economy business model going forward, and the company’s sustainability manager, Jonas Engberg, says that their vision is for all their products to have circular capabilities by 2030.

While this may seem overly ambitious, IKEA has already been unobtrusively introducing such programs in its European stores in a bid to discover how it can push circular services to its customers mainstream. Their stores in Belgium serve as a prime example of their changing business model, already offering five options to shoppers: sell, renew, repair, return or donate.

Customers can “sell” back their IKEA furniture for it to be resold or buy spare parts to “repair” their damaged goods. The other three options apply even to third party goods, with “renew” involving workshops for refreshing, restoring and reusing furniture. “Return” and “donate” are specific to certain items that can be recycled to create new sellable goods, preventing such items from turning into bulky waste.

In Sweden, IKEA has partnered with Blocket, a classified advertising website, to encourage customers to transact in second-hand goods, linking back to their website and increasing their traffic.

Engberg says IKEA is “determined to make sustainability affordable and attractive to as many people as possible,” and will offer “products and solutions that enable people to live more sustainably by reducing energy, water and waste, which we have identified as a ‘sustainable life at home range’.”

Parella says IKEA has thus far been “on track to achieve its goal of a fourfold increase in sales of products for a more sustainable life at home,” having increased sales of sustainable products by 29 percent in the last 2015 financial year compared to the 2014 financial year.

“We have converted our entire lighting range to LED and we estimate to sell more than 500 million LEDs by 2020,” Engberg said, providing an example of their success in one category before underlining the importance of circularity in IKEA’s future endeavors. “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.”

IKEA has also been looking for ways to recycle wastes from their own operations, such as plastic, paper, wood fibers, foam and textiles, as new raw materials for their products. The retailer has already started implementing the required logistics for a circular model, offering mattress takebacks as well as kitchen and white goods removal in several of the markets it serves. Over a million spare parts for repairs are already being shipped worldwide.

As a part of Ellen MacArthur Foundation’s Circular Economy 100 (CE100) network, IKEA can easily reach out with other like-minded companies, and Engberg says they intend to collaborate with customers and coworkers to make their business circular.

For more information, read the article on the Sustainable Brands website.

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