IKEA’s Profit Losing Sustainability Plan

April Davis By April Davis | 20 Jun 2018

IKEA believes that the 56 percent of Australian consumers who throw out furniture each year would be less inclined to do so if there was a way for them to profit from their unwanted goods. The Swedish furniture retailer has a plan to test this theory.

IKEA is launching its first ‘take-back’ service in Sydney, where consumers who have purchased furniture from the retailer online or in-store, can return their second-hand goods to be sold to a new customer, in exchange for a store voucher.

To help consumers minimise their landfill contribution, IKEA is reportedly opening its first ‘Circular Living Pop-Up Store’ at IKEA in Tempe. The store will initially be open for eight weeks and will showcase how the multichannel retailer uses recyclable materials in its products. An example of the company’s sustainable practices includes turning plastic PET bottles into its KUNGSBACKA Kitchen cabinetry.

“IKEA is focused on ensuring all our products are designed from the very beginning with the intention to be repaired, reused, resold and eventually recycled,” said Kate Ringvall, the sustainability manager, IKEA Australia.

“In fact, 60 percent of our range is currently based on renewable materials.  Our utmost priority is to generate as little waste as possible, but we can’t do it alone – it takes government, business, industry and the entire community to make a difference.”

The take-back pop-up will give consumers the opportunity to return their used goods (if they’re in a reasonable condition) in exchange for a store voucher. IKEA won’t be making a profit from this initiative, as the second-hand goods will be re-sold for the same price the retailer paid for it.

“With the launch of our Circular Living Pop-up Store and IKEA Tempe Take-Back Service, we want to make it easier than ever for Australians to live the sustainable life they desire,” said Ringvall.

To participate in the program, consumers need to visit the online store to fill in an eligibility form and submit photos of the product. If the furniture is eligible for the program, IKEA will put forward an offer to purchase the piece, before giving the customer 14 days to return it to IKEA Tempe to redeem their voucher.

IKEA reportedly decided to take steps to reduce the amount of re-usable furniture ending up in landfill, after its IKEA AUSTRALIA PEOPLE & PLANET POSITIVE REPORT 2018, revealed that 81 percent of Australians were unfamiliar with the concept of a circular economy, and as many as 67 percent of consumers would happily purchase used furniture.

The Swedish furniture giant is one of many retail businesses taking steps towards a more sustainable future, with global fashion companies like H&M also introducing new sustainable measures. The fast-fashion brand recently introduced its goal of making all of its products with sustainable materials by 2030, as part of its commitment to ethical fashion.

IKEA is also offering consumers unable to transport their furniture to the Tempe store two-hour complimentary access to a GoGet vehicle to complete their return.

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