Ikea to test furniture rental in 30 countries

IKEA will expand tests to allow customers to rent desks and sofas rather than buy them in response to growing environmental concerns.
An Ikea employee hangs up a sign reading "natural - sustainable" at the company's store in Kaarst, Germany.
An Ikea employee hangs up a sign reading "natural - sustainable" at the company's store in Kaarst, Germany.PHOTO: REUTERS

KAARST, GERMANY (REUTERS) - Ikea wants to roll out furniture rental to all its main markets in a bid to appeal to its increasingly environmentally conscious and transient customers.

The world's biggest furniture group, known for its low-cost disposable items, first said it was looking into leasing its desks, beds and sofas in February. It fleshed out its plans on Wednesday (April 3) at an event held at its first "sustainable" store in Kaarst, western Germany, which was opened in 2017.

The rental pilot was driven by a recognition that many consumers change homes more frequently but can't afford new furniture every time they move, Mr Jesper Brodin, chief executive of Ingka Group, which owns most Ikea stores, told Reuters.

It is also motivated by environmentalism, with Ikea surveys showing that 90 per cent of its customers are ready to change their behaviour, even if most don't know how to do that.

"You should be able to have a lovely home, and a good conscience, and you should be able to afford it," Mr Brodin said, noting that his three teenage children come home from school expressing fears about a looming environmental catastrophe.

Since taking over as CEO in 2017, Mr Brodin has led efforts to overhaul the Ikea business model to respond to climate change, the rise in e-commerce and customers who no longer have the time or the cars to drive to its out-of-town stores.

Rental meets Ikea's three main strategic objectives: being more affordable, more convenient and looking after planet, said Ikea finance chief Juvencio Maeztu, noting that young people increasingly expect to rent anything from music to cars.

 
 

Rent the Runway, which has previously only rented out designer apparel and accessories, said last month it will partner with Williams-Sonoma's West Elm brand to allow subscribers to rent home decor.

Ikea, which had global sales of €39 billion (S$60 billion) last year, will test a range of subscription-based leasing offers in all 30 of its markets by 2020 so products are reused as often as possible before being recycled.

REPAIR, RECYCLE

It had already committed to making all its products from renewable and recycled materials by 2030 and also to designing all its products to be reused, repaired and recycled. In 2018, it handled one million orders for spare parts to repair products.

The rental tests will give Ikea insights into the durability of its products that it will feed back to designers, who are already working to make furniture that is easier to dismantle and move, said Ms Pia Heidenmark, Ikea sustainability chief.

In the Netherlands, Ikea is offering students the rental of a bed, desk, table and chairs for a monthly fee of up to €30, while in Sweden and Switzerland it is looking into providing office furniture to companies.

Mr Brodin also highlighted another strategic shift, saying he wants to provide convenient, round-the-clock access to Ikea stores in the company's top 30 cities in the next five years.

Ikea has just opened a new store in Greenwich in south-east London and is about to add locations in central Paris and Moscow. It is finalising plans for many more, Mr Maeztu said.

"In New York, London, Paris, Berlin, Madrid, Barcelona, Tokyo, Shanghai, Mumbai, we will see more of these mid-sized stores in the future," he said. "In the next 20 years, more people will live in cities and own fewer cars and share more."

Ikea also plans to expand TaskRabbit, a US online marketplace for odd jobs like furniture assembly it bought in 2017, to many more markets, and is looking for other similar acquisition or partnership opportunities, Mr Maeztu said.

Around the world, IKEA businesses are starting up various furniture rental and leasing models among many other initiatives designed to support our move towards a circular business model.

In response to queries, a spokesman for Ikea South-east Asia said that it is exploring possibilities for "locally relevant solutions" that consider the local waste infrastructure, customer demands as well as opportunities that help people have a positive impact on the planet.