Ikea is starting a Swiss test in which offices can rent their furniture instead of buying it. Eventually, the chain wants to give its customers the opportunity to start leasing their interior decoration, allowing people to change the look of their homes from time to time without throwing away furniture.
New revenue and sustainability
Ikea is working on a new renting model, which it believes will allow us to own our home interior – from office chairs to kitchen cabinets – in a totally new way. "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," explains Torbjörn Lööf, CEO of parent holding Inter Ikea in the Financial Times.
Besides an entirely new income model for the retail giant, who is urgently looking for a new growth strategy, the rental system is also supposed to be more sustainable. According to Lööf, the furniture's life cycle would be lengthened because Ikea can refurbish it and then sell it again. In that way, Ikea is striving to develop a circular company model.
“Scalable subscription services”
Before the month is over, the initial try-out will begin in Switzerland. The target audience consists of businesses, which might rent office furniture such as desks and chairs, but Lööf is already talking about a series of try-outs that might end up leading to "scalable subscription services" for various kinds of furniture. He sees kitchens as an interesting product category for the leasing model. "You could say leasing is another way of financing a kitchen."
Customisation and easily modifiable interiors are a new market and Ikea is very interested in that. "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", Lööf says. He wants to give consumers the chance to just change the doors of their Ikea cupboards, for example – even when it is a rental kitchen.
Ikea is also considering to launch a separate company for spare parts, allowing customers to buy replacements for hinges, screws or bolts, even for furniture that is no longer available in the stores.