IKEA To Begin Furniture Leasing Pilot

In an interview with the Financial Times, Torbjorn Loof, chief executive of Inter Ikea, which owns the Ikea brand, said that the retailer is to begin leasing furniture.

The trial is to take place in Switzerland and may start as soon as this month, according to the publication.

Mr Loof said: “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,”

“And instead of throwing those away, we refurbish them a little and we could sell them, prolonging the lifecycle of the products.”

IKEA will begin with leasing office furniture to businesses but has not ruled out offering rental services for big-ticket items such as kitchens. “You could say leasing is another way of financing a kitchen. 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,” said Mr Loof.  He explained that IKEA designs its kitchen doors so that it is possible to update the look without removing the entire kitchen, adding: “It’s interesting if you as a consumer say ‘I can change and adapt and modernise my kitchen if that’s a subscription model’,”.

The trial is the first in a series of tests that Ikea hopes could lead to “scalable subscription services” for different types of furniture. 

The retailer has opened smaller stores in city centres, pop-up shops for particular rooms such as kitchens or bedrooms, and improved many of its other services such as online sales and home delivery.

The trial is one of several plans IKEA has to transform its business model and develop a new, circular model which will enable it to reduce its environmental impact.  Recently, the company began opening kitchen and bedroom 'Planning Studio' stores and, in the last few years, trialled Order & Collection Points in city centres.      

A spare parts service for products which are no longer stocked is also being considered.

In November 2018 IKEA announced that in the coming two years it is planning to create a further 11,500 jobs across the world, but would be making around 7,500 redundancies as it seeks to simplify to enable a 'greater focus on adding value to customers'.  Later that month, it was revealed that IKEA's profits had declined by more than a third amid store and ecommerce investments.

Source : Insight DIY Team

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