IKEA

Testing a sustainable leasing service for a furniture retail giant

Consumer & Retail • Build Growth Engines

IKEA

The Challenge

Seeking to enter the circular economy with a more sustainable supply chain, Swedish furniture giant IKEA established a new flexible leasing service that simplifies the furniture purchasing process for businesses while extending the lifetime use of its products. Before launching the new service globally, IKEA wanted to test the concept and needed to identify an ideal test market to conduct a pilot program. 

The Opportunity

Spain, where the pilot would be launched, historically has one of the lowest home rental rates in Europe. After analyzing recent housing trends in Spain, we identified a 5-year increase in apartments built for renting due to growing private sector rental housing development and management. With the rise of build-to-rent solutions from builders and funds, there was an opportunity to test IKEA’s furniture leasing service with companies entering the rental housing market and explore the options to let end-users take furniture with them when they moved. 

The Solution

IKEA Rental enables the company to take control of the later stages in the product cycle and prevent discarded furniture from adding to the global waste problem. Through the B2B service, IKEA rents out office and home furniture to companies, giving them the opportunity to keep the furniture at the end of their leasing terms or determining how damaged or discarded furniture products could be recycled, reused, repaired, and put in the market again.

The Approach

We investigated different B2B and B2C furniture leasing services available around the world to compare pricing and quality. This helped us identify different furniture leasing models to inform the creation of the new service as we collaborated and aligned with different internal stakeholders. Once the service was defined and the cost structure and financial model delineated, we selected Spain as the location for the pilot plan because of its newly burgeoning rental housing market ideal for us to test, learn, and iterate.

Impact

IKEA Rental successfully launched in May 2021 in the Spanish market, where it will support an influx of rental housing coming to market in the region attributed to companies adding more rental units to the market. With the service now active, it will help move IKEA further along in its commitment to becoming 100% circular by 2030.